Germany: more and more companies take on a foreign legal form

Businesses avoiding co-management regulations. Sebastian Sick, specialized in economic law at the Hans-Böckler Foundation and author of the study, says that, up to the spring 2006, there were, in Germany, 17 businesses employing over 500 people with a foreign or mixed legal form. There are 37 today. Yet, the people working for these businesses, located in Germany, aren’t entitled to the co-determination rights that are go without saying in similar businesses with a German legal form. They are neither covered by the “Codetermination Act” of 1976 (Mitbestimmungsgesetz), which imposes the creation of a board equally made up of staff and shareholders’ representatives in businesses with over 2,000 employees, nor by the “One-Third Employee Representation [Participation] Act” of 2004 (Drittelbeteiligungsgesetz) which grants staff representatives one in three seats within the supervisory board of businesses with 501-2,000 employees. The businesses concerned include famous companies such as Air Berlin PLC & Co. KG (airline), Müller Ltd. & Co. KG (hardware stores), or even Prinovis Ldt. & Co. KG (printing). The Foundation notably explains this situation by the case law of the European Court of Justice which allows businesses operating in European countries, in several orders rendered since 2001 regarding establishments, to keep their initial legal form.