On 25 April the European Commission proposed new company law rules to make it easier for companies to merge, divide, and move company seats within the EU. The EU directive proposal aims to facilitate these “with strong safeguards to protect employees' rights and, for the first time, to prevent artificial arrangements aiming at tax avoidance and other abuses", the official press statement detailed. As regards workers rights, the new text augments workers’ information on the impacts of any such proposed company operations and above all safeguards employees' participation in the company management and supervisory organs when the company seat moves across EU Member States or when a company engages in cross-border division, and as such avoids any dilution of workers’ rights that may otherwise have stemmed from these operations.
Safeguarding participation rights. The EU Treaty safeguards the fundamental freedom to establish an enterprise and as such companies should be able to transfer their company seats, merge, and divide their businesses across EU borders without having to overcome complicated and burdensome obligations relating to company liquidations and legal entity status. Nonetheless the EU Commission stresses that this essential simplification should not result in employees’, creditors’, and minority shareholders’ interests being diminished.
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