Law on the Involvement of Employees in the European Cooperative Societies (SCES)


Published: 2006-05-12

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Official translation
 
 
REPUBLIC OF LITHUANIA
LAW
ON THE INVOLVEMENT OF EMPLOYEES IN THE EUROPEAN COOPERATIVE SOCIETIES (SCEs)
 
5 December 2006 No X-935 Vilnius
 
 
 
CHAPTER I
GENERAL PROVISIONS
 
Article 1. Purpose of the Law
1. The purpose of the Law is to monitor the involvement of employees in decision-making in the European Cooperative Societies (SCEs) (hereinafter referred to as a “European cooperative society”).
2. The provisions of this Law shall implement the legal act of the European Union specified in the annex to this Law.
 
Article 2. Scope of the Law
1. The Law shall be applied, if the registered office of an SCE is situated, or the registered office of an SCE being established will be situated, in the Republic of Lithuania.
2. Irrespective of where the registered office of an SCE is situated, or where the registered office of an SCE being established will be situated, the Law shall also be applied when:
1) determining and calculating the number of employees of the participating legal entities whose registered office is situated in the Republic of Lithuania, the concerned controlled companies, or the concerned establishments operating in the Republic of Lithuania, as well as of the participating natural persons who have a permanent place of residence in the Republic of Lithuania, and of an SCE;
2) determining the procedure and conditions for the appointment (election) to special negotiating committees of representatives of employees of the participating legal entities whose registered office is situated in the Republic of Lithuania, the concerned controlled companies, the concerned establishments operating in the Republic of Lithuania, as well as the procedure and conditions for the appointment (election) to special negotiating committees of employees of the participating natural persons who have a permanent place of residence in the Republic of Lithuania;
3) determining the procedure for the appointment (election) to the SCE Works Councils of representatives of the employees of the SCEs operating in the Republic of Lithuania, the companies controlled by an SCE, whose registered office is situated in the Republic of Lithuania, or the establishments of an SCE, which operate in the Republic of Lithuania, or the establishments of the companies controlled by an SCE, as well as the procedure for their appointment (election) to an SCE administrative or supervisory bodies and participation in the general meeting of members and/or meeting of a structural division(s);
4) determining the guarantees and the protection of the rights of the members of the special negotiating committee, the members of the SCE Works Council, as well as the members elected, appointed, recommended to the administrative or supervisory bodies of the SCE or to participate in the general meeting of members and/or meeting of a structural division(s) by the employees or their representatives, whose appointment has been approved by the employees or their representatives, their right to compensation of travel, health insurance, life assurance, accommodation and subsistence expenses, where these members are connected by employment relations with a participating legal entity whose registered office is situated in the Republic of Lithuania, with the concerned controlled company or with the concerned establishment operating in the Republic of Lithuania or with the company controlled by an SCE, whose registered office is situated in the Republic of Lithuania, or with an SCE establishment operating in the Republic of Lithuania or with the establishment of a company controlled by it, or with a participating natural person who has a permanent place of residence in the Republic of Lithuania.
 
Article 3. Definitions
1. Central management shall mean the competent body of the SCE administration or management.
2. Company controlled by a participating legal entity or an SCE shall mean a legal entity upon which the participating legal entity or the SCE may exert a dominant influence, as defined in Article 4 of the Republic of Lithuania Law on European Works Councils.
3. Participation shall mean the influence of the employees’ representatives on the management of an SCE and other participating legal entities by way of exercising the right to elect or appoint the members of the administrative or supervisory body of the SCE, or of other participating legal entities, to recommend to appoint them and/or to oppose their appointment.
4. Employees’ representatives shall mean representatives of employees of an SCE, or of a participating legal entity, or of a concerned controlled company or of a concerned establishment and also representatives of employees of the participating natural persons; representatives of employees of a legal entity, whose registered office is situated in the Republic of Lithuania, or of an establishment operating in the Republic of Lithuania, or of a participating natural person who has a permanent place of residence in the Republic of Lithuania, as provided for in Article 19 of the Labour Code of the Republic of Lithuania. The representatives of employees of legal entities whose registered office is situated in another Member State and of employees of the concerned establishments operating in another Member State and of employees of the participating natural persons who have a permanent place of residence in another Member State means representatives of employees within the meaning provided for by the laws of those Member States and/or established practice. In the cases provided for by this Law, the SCE Works Council set up according to the procedure established by this Law, the committee of the SCE Works Council or the special negotiating committee shall also be considered as the employees’ representative.
5. Involvement of employees shall mean any mechanism, including information, consultation, and participation through which the employees’ representatives may exercise an influence on decisions to be taken within the controlled companies, the concerned controlled companies or the concerned establishments.
6. European cooperative society (SCE) shall mean a legal entity established in accordance with Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE).
7. SCE Works Council shall mean the employees’ representative body formed in accordance with the procedure established by this Law with the purpose of exercising the right of the employees of the SCE, its controlled companies or establishments to information, consultation and participation. Under this Law, the SCE Works Council shall also be the representative body established based on the legal acts of another Member State with the purpose of exercising the right to information, consultation and participation of the employees of the SCE established in another Member State, of the employees of the controlled companies or the establishments of the SCE.
8. Information shall mean transfer of information (data) on issues which concern the SCE itself and/or any of its controlled companies or establishments situated in another Member State, or issues which exceed the powers of the decision-making bodies in a Member State to the SCE Works Council, the committee of the SCE Works Council and/or the employees’ representatives with a view to introducing them to the essence of the issue.
9. Other level of management shall mean administrative or management body of a company controlled by an SCE, or the head of the SCE establishment or of the establishment of the company controlled by the SCE.
10. Competent body of participating persons shall mean the body formed by agreement between administrative and management bodies of the participating legal entities and the participating natural persons for the purpose of negotiating with the special negotiating committee on the involvement of employees.
11. Consultation shall mean the exchange of views and the establishment and development of a dialogue between the SCE Works Council, the SCE Works Council committee and/or the employees’ representatives and the central management or other level of management.
12. Special negotiating committee shall mean the body established in accordance with the provisions of this Law to negotiate with the competent body of the participating persons or with the central management of a registered SCE regarding the involvement of employees within the SCE.
13. Participating natural person shall mean a natural person directly participating in the establishment of an SCE.
14. Participating legal entity shall mean a cooperative society (cooperative) or any other legal entity directly participating in the establishment of an SCE. (
15. Concerned controlled company or concerned establishment shall mean a controlled company or establishment of a participating legal entity, which is to become a controlled company or establishment of an SCE upon its establishment.
16. Member State shall mean a Member State of the European Union, as well as a European Economic Area country.
 
CHAPTER II
BASIC PRINCIPLES OF THE INVOLVEMENT OF EMPLOYEES IN AN SCE
 
Article 4. Grounds for the Involvement of Employees in an SCE
1. The employees shall be involved according to the procedure established by this Law in the decision-making in an SCE, as well as in the companies controlled by the SCE whose registered office is situated in other Member States or the SCE establishments operating therein.
2. The involvement shall cover issues that concern the SCE itself, its controlled companies whose registered office is situated in other Member States, or the establishments operating therein, or issues solving of which is beyond the competence of the decision-making central management or other level of management in that Member State.
 
Article 5. Implementation of the Involvement of Employees in an SCE
1. For the purpose of implementing the involvement of employees in an SCE, the SCE Works Council shall be formed or other procedure for information, consultation and participation specified in subparagraphs 6 and 7 of paragraph 2 of Article 19 of this Law shall be provided for.
2. Central management shall provide the conditions and ensure measures necessary for the formation and functioning of the SCE Works Council.
 
Article 6. Principles of Cooperation
1. The cooperation between the central management, or other level of management, and the employees’ representatives, which is regulated by this Law, shall be implemented in compliance with the principles of cooperation between the parties, equality of rights, goodwill, respect for lawful mutual interests and other principles of social partnership.
2. The central management or other level of management shall be prohibited from exercising an influence on the activities of the employees’ representatives.
3. The employees’ representatives shall be consulted at such time, in such manner and on such issues that would enable the employees' representatives to express their opinion on measures envisaged by the central management or other level of management, which may be taken into account in the decision-making process within the SCE, on the basis of information provided.  
4. If, immediately after the establishment of an SCE, substantial changes occur in the SCE and in its controlled companies which clearly indicate that the purpose of the establishment of the SCE is to deprive the employees of their right of involvement, new negotiations must be started according to the provisions of Chapter III of this Law. Substantial changes in the SCE and its controlled companies concern the changes in the number of employees in the SCE and the companies controlled by it, or the changes in the company establishment methods which would have extended the employees’ rights of involvement in the company management had they been implemented before the establishment of the SCE.
 
Article 7. Right of Information
1. The central management shall timely submit information to the SCE Works Council, the SCE Works Council committee, as well as the special negotiating committee and shall be responsible for the accuracy of information. Information shall be provided in a manner and to the extent that allows the employees’ representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare for consultations with the central management.
2. Members of the SCE Works Council, as well as members of the special negotiating committee, upon submitting a written obligation not to reveal any commercial/industrial or professional secret, shall have the right of access to the information considered as commercial/industrial or professional secret only when this is necessary for the performance of their duties.
3. Members of the SCE Works Council, members of the special negotiating committee, as well as any expert or interpreter participating in the negotiations concerning the involvement of employees in the SCE or in the activities of the SCE Works Council or the SCE Works Council committee, irrespective of their location, shall not be authorised to reveal to third persons the information which has been disclosed to them as a commercial/industrial or professional secret. This obligation shall continue to apply even after the expiry of powers of the employees’ representatives or termination of contractual relations with the interpreter.
4. The central administration may refuse in writing to provide information considered as commercial/industrial or professional secret when the nature of the information is such that, according to objective criteria, it would or could be prejudicial to the company concerned or its functioning.
5. Having received a written refusal, the SCE Works Council, the SCE Works Council committee or the special negotiating committee may, within one month from the receipt of the refusal to provide information, apply to the court. Where the court makes a ruling that the refusal to provide information is unjustified, the SCE or the participating legal entity of natural person shall be obligated to provide the information.
 
Article 8. Guarantees and the Protection of the Rights of Employees’ Representatives
1. For the members of the SCE Works Council, members of the special negotiating committee connected by employment relations with the SCE whose registered office is situated in the Republic of Lithuania, its controlled company or participating legal entity or natural person, the concerned controlled company, as well as with the SCE establishment operating in the Republic of Lithuania, the establishment of the controlled company or the concerned establishment conditions to attend the meetings of the SCE Works Council, the SCE Works Council committee, and also the joint meetings with the central management and participate in the negotiations concerning the involvement of employees in the SCE must be provided reserving for them their job place and the average wage. The same rule shall be applicable when the members of the SCE’s administrative or supervisory body elected by the employees or the employees’ representatives attend the meetings of the SCE administrative or supervisory body and/or the general meeting of members and/or the meetings of a structural division(s).
2. The contract of employment may not be terminated on the employer’s initiative with the employees referred to in paragraph 1 of Article 1 of this Law during their membership in the SCE Works Council or the special negotiating committee without the consent of the employees’ representative who appointed them. In the case these members elected at the meeting or conference of employees, their contract of employment may be terminated on the employer’s initiative, if consent from the territorial branch of the State Labour Inspectorate according to the location of the registered office of the employer (or according to the permanent place of residence where the employer is a natural person) is obtained.    In such case, Article 134 of the Labour Code of the Republic of Lithuania shall apply mutatis mutandis to the procedure for dismissal of employees from work.
3. The rights of the members of the SCE Works Council, members of the special negotiating committee, members of the administrative or supervisory body of the SCE elected by the employees or the employees’ representatives, and also employees or their representatives participating in the general meeting of members and/or the meetings of a structural division(s) shall be protected and the guarantees provided as of the day of their appointment (election) to the post, under the legislation and/or the established practice of the Member State in which the registered office of the legal entity which has employed them is situated or in which the establishment which has employed them is operating, or in which the permanent place of residence of the natural person who has employed them is located.
 
CHAPTER III
ORGANISATION OF NEGOTIATIONS
 
Article 9. Initiation of Negotiations and Information
1. When establishing an SCE, administrative and management bodies of the participating legal entities, the concerned controlled companies or the concerned establishments must initiate negotiations concerning the involvement of employees in the SCE.
2. When an SCE is established by natural persons only or by one legal entity and natural persons, the participating natural persons and/or an administrative or management body of the participating legal entity must initiate negotiations concerning the involvement of employees in the SCE only if not less than 50 employees are employed in the participating legal entity and/or by natural persons in at least two Member States.
3. For the purpose specified in paragraphs 1 and 2 of this Article, the management and administrative bodies of the participating legal entities and the concerned controlled companies or the concerned establishments or the participating natural persons shall inform in writing as soon as possible, but not later than within 30 days from the presentation to the manager of the Register of Legal Entities of the draft terms of the merger, in the case an SCE is to be established by way of merger or by converting a cooperative society (cooperative) into an SCE, the employees’ representatives in the companies or establishments or, in the absence of such representatives, the employees at the meetings of the entire body of employees and by other means for providing information used in legal entities or establishments or the participating natural persons on:
1) the plans to establish the SCE; present the information relating thereto;
2) the participating legal entities and natural persons, the concerned controlled companies and the concerned establishments, as well as the employees’ representatives at these companies and establishments;
3) the total number of employees in all the participating legal entities, the concerned controlled companies and the concerned establishments and in each one of them separately, as well as the total number of employees of the participating natural persons and the total number of employees in every Member State;
4) the number of seats in the special negotiating committee calculated according to the procedure established by this Law as allocated to the employees’ representatives of each participating legal entity, the concerned controlled company and the concerned establishment and/or the employees of the participating natural persons, as well as the distribution thereof according to different Member States;
5) the participation rights held by the participating legal entities, i.e. what part of the members of the company's supervisory or administrative body the employees or their representatives are entitled to appoint, elect, recommend to elect and/or oppose their appointment.
6) the rights of the participating a cooperative societies (cooperatives) to participate in the general meeting of members and/or the meetings of a structural division(s).
4. If, prior to the registration of an SCE in the Register of Legal Entities, the negotiations concerning the involvement of employees in the SCE were not initiated in accordance with the procedure established by this Law, after the registration of the SCE in the Register of Legal Entities, the central management of the SCE must conclude negotiations only in the case where:
1) the total number of employees in the SCE, its controlled companies, establishments or the establishments of the controlled companies is at least 50;
2) less than 50 employees are employed in the SCE, its controlled companies, establishments or the establishments of the controlled companies, but at least 1/3 of the employees from at least two Member States request to initiate such negotiations.
5. The right of employees or their representatives to initiate the negotiations is exercised by submitting to the central management a signed application on the establishment of the special negotiating committee.
6. The central management must notify in writing all the companies controlled by the SCE and/or their establishments located in the Member States about its initiative or about receiving the application referred to in paragraph 5 of this Article within 15 days.  The administrative or management body of the controlled company, or the head of the SCE establishment, must immediately inform its employees or their representatives about the notification received from the central management.
7. For the purpose specified in paragraph 4 of this Article, the central management of an SCE shall inform in writing as soon as possible, but not later than within 30 days from registering the SCE in the Register of Legal Entities the employees’ representatives at the SCE and the companies, the establishments controlled by it and the establishments of the controlled companies, or, in the absence of such representatives, the employees at the meetings of the entire body of employees and by other means for providing information used in the SCE, the companies, the establishments controlled by it and the establishments of the controlled companies on:
1) the SCE, the companies and/or establishments controlled by it, as well as the employees’ representatives at the SCE and the companies and/or establishments controlled by it;
2) the total number of employees the SCE, the companies and/or establishments controlled by it and in each one of them separately, as well as the total number of employees in every Member State;
3) the number of seats on the special negotiating committee calculated according to the procedure established by this Law as allocated to employees’ representatives of each participating company, concerned controlled company and concerned establishment as well as the distribution thereof according to different Member States;
4) the participation rights held by the companies, the establishments controlled by the SCE and the establishments of the controlled companies, i.e. what part of the members of the company's administrative or supervisory body the employees or their representatives are entitled to appoint, elect, recommend to elect and/or oppose their appointment;
5) the rights of the companies and/or establishments controlled by the SCE to participate in the general meeting of members and/or the meetings of a structural division(s).
8. The number of all the participating legal entities, the participating natural persons, the establishments, the concerned controlled companies and the concerned establishment in each Member State, as well as the number of employees in the SCE, the companies and establishments controlled by the SCE and the total number of employees in the Member States shall be calculated in accordance with Article 7 of the Republic of Lithuania Law on the European Works Council.
 
Article 10. Composition of the Special Negotiating Committee
1. A special negotiating committee shall be formed for the purpose of conducting negotiations with the competent body of the participating persons concerning the involvement of employees in an SCE or the negotiations concerning the involvement of employees in an established SCE.
2. Employees of the establishments of an SCE whose registered office is situated in one Member State, the establishments of companies controlled by it, as well as the participating legal entities whose registered office is situated in one Member State, the concerned controlled companies or the concerned establishments and employees of the participating natural persons who have a permanent place of residence in one Member State shall have the right to appoint or elect members of the special negotiating committee.  The employees’ representatives of the Member State shall be allocated seats per portion of employees employed in that Member State of the total number of employees in all the Member States taken together:
1) not more than 10% - 1 seat;
2) more than 10% but not more than 20%  2 seats;
3) more than 20% but not more than 30% - 3 seats;
4) more than 30% but not more than 40% - 4 seats;
5) more than 40% but not more than 50% - 5 seats;
6) more than 50% but not more than 60% - 6 seats;
7) more than 60% but not more than 70% - 7 seats;
8) more than 70% but not more than 80% - 8 seats;
9) more than 80% but not more than 90% - 9 seats;
10) more than 90%  10 seats.
3. In the case an SCE is established by way of merger, one additional employees’ representative shall be appointed or elected as member of the special negotiating committee from each cooperative society (cooperative), which will cease to exist as a separate legal entity, from each Member State ensuring that the employees of the participating cooperative society (cooperative) with the registered office situated in that Member State and which will cease to exist as a separate legal entity after the registration of the SCE would appoint or elect their representative.  The number of such additional members shall not exceed 20% of the number of members elected according to the provisions of paragraph 2 of this Article ensuring that the composition of the special negotiating body does not entail a double representation of the employees concerned. If the number of the participating cooperative societies (cooperatives), as well as the number of the establishments of an SCE or the companies or establishments controlled by it exceeds the number of additional seats, these additional seats shall be allocated among the participating cooperative societies (cooperatives) in different Member States according to the number of employees they employ.
4. Where the employees’ representatives from one Member State are allocated more than one seat, they have to be appointed to represent different legal entities and/or natural persons.
5. When appointing or electing members of the special negotiating committee, the balance of participation of women and men shall be promoted.  
 
Article 11. Formation of the Special Negotiating Committee
1. Where the registered office of the participating legal entity, the concerned controlled company is situated in the Republic of Lithuania or where the concerned establishment is operating in the Republic of Lithuania, or where the place of residence of the participating natural person is in the Republic of Lithuania, the member(s) of the special negotiating committee from the Republic of Lithuania shall be appointed respectively by the employees of that legal entity, natural person or establishment, or by their representatives. Where the registered office or the place of residence of several participating legal entities or natural persons, the concerned controlled companies is situated in the Republic of Lithuania and/or one or several concerned establishments are operating in the Republic of Lithuania, the member(s) of the special negotiating committee shall be appointed by majority vote of the employees of all these legal entities, natural persons and/or establishments, or their representatives, if this majority represents the majority of all the employees.
2. In case the employees’ representatives of the participating legal entity whose registered office is situated in the Republic of Lithuania, or of the participating natural person whose place of residence is in the Republic of Lithuania, or the concerned controlled company or the concerned establishment whose registered office is situated in the Republic of Lithuania fail to appoint member(s) of the special negotiating committee within 30 days from the presentation of the information provided for in paragraphs 3 and 7 of Article 9 of this Law, the member(s) of the special negotiating committee shall be elected by secret ballot at the general meeting of the entire body of employees. It may be convened by any employees’ representative. The same procedure shall also be applied where there are no employees’ representatives in the establishment, legal entity or SCE, however, in such case, the administrative or management body of the respective legal entity, or the head of the establishment, or the central management of the SCE shall convene the meeting of the entire body of employees. Where a natural person is participating in the establishment and he has to ensure the involvement of employees in accordance with the procedure established by this Law, the natural person shall have to convene the general meeting of the entire body of employees.
3. Where the registered offices of several participating legal entities or the concerned controlled companies are situated in the Republic of Lithuania and/or where one or several concerned establishment are operating in the Republic of Lithuania, and/or where the place of residence of several participating natural persons is in the Republic of Lithuania and the representatives of the employees of these legal entities, controlled companies and/or establishments and employees of natural persons within 30 days from the presentation of the information provided for in paragraphs 3 and 7 of Article 9 of this Law fail to agree among themselves on the appointment of a member(s) of the special negotiating committee from the Republic of Lithuania or in case there are no employees’ representatives in any participating legal entity or in the concerned controlled company whose registered office is situated in the Republic of Lithuania, or in the concerned establishment which operates in the Republic of Lithuania, and/or the employees of the participating natural person who has a permanent place of residence in the Republic of Lithuania fail to appoint (elect) their representative, such member(s) shall be elected by secret ballot at the general conference of delegates of employees of the SCE, the companies controlled by it, legal entities, natural persons and/or establishments. At the conference, one delegate shall represent every ten employees of the SCE, the companies controlled by it, legal entities, natural persons or establishments. Where there are less than ten employees at the SCE, legal entities, natural persons or establishments, they shall also be represented by one delegate. The conference shall be convened by, respectively, the central management of the SCE, the administrative or management body of the participating legal entity or the administrative or management body of the establishment employing the largest number of employees calculated according to the procedure established by this Law, or the head of the establishment or the participating natural person.
4. The provisions of paragraph 5 of Article 62 of the Labour Code of the Republic of Lithuania shall apply, mutatis mutandis, to the general meeting of the entire body of employees and the general conference of the delegates of the employees of an SCE, legal entities, natural persons and/or establishments.
5. The participating legal entities and/or natural persons or an SCE must provide technical assistance provided for in paragraph 3 of Article 13 of this Law when organising the general meeting of the entire body of employees or the general conference of the delegates of the employees of an SCE, the companies controlled by it, legal entities, natural persons and/or establishments.
6. Members of the special negotiating committee representing the employees of an SCE whose registered office is situated in other Member States, its establishments or the companies controlled by it and/or establishments thereof, the participating legal entities whose registered office is situated in other Member States, the concerned controlled companies or the concerned establishments operating therein and/or natural persons whose permanent place of residence is in other Member States shall be appointed or elected in compliance with legal acts and/or the established practice of those Member States.
7. The procedure laid down in this Article shall also be applied when electing or appointing new members of the special negotiating committee.
 
Article 12. Organisation of Activities of the Special Negotiating Committee
1. The special negotiating committee shall elect its chairman and secretary and approve its rules of procedure.
2. The special negotiating committee shall take decisions by majority vote of all its members, provided that the majority is representative of the majority of all the employees, except for in the cases specified in paragraph 3 of this Article and other cases referred to in other Articles of this Law. Each member shall have one vote.
3. Where the result of the negotiations would lead to relinquishment or reduction of the existing participation rights, the majority required to approve such a decision of the special negotiating committee shall be the votes of 2/3 of the members of the committee representing at least 2/3 of all the employees employed in at least two Member States:
1) in the case an SCE is established by way of merger, provided the participation is implemented in the participating cooperative societies (cooperatives) where at least 25% of the total number of employees of the participating cooperative societies (cooperatives) are employed; or
2) in the case an SCE is established by way other than that referred to in subparagraph 1 of paragraph 3 of this Law, provided the participation is implemented in the participating legal entities where at least 50% of the total number of employees of the participating legal entities are employed.
4. Relinquishment or reduction of the participation rights means that a proportion of members of the SCE administrative or supervisory bodies who are elected, appointed, recommended or whose appointment is approved by the employees and/or the employees’ representatives is lower than the existing proportion of members of the administrative or supervisory bodies elected, appointed or recommended by the employees and/or the employees’ representatives or whose appointment is approved by the employees and/or the employees’ representatives within any participating legal entity.
 
Article 13. Meetings of the Special Negotiating Committee
1. The first meeting of the special negotiating committee shall be convened by:
1) the competent body of persons participating in the establishment, where the negotiations are held prior to the establishment of an SCE;
2) the central management of an SCE, where the negotiations are held after the establishment of an SCE.
2. The special negotiating committee shall have the right to convene before initiating the negotiations with the competent body of persons participating in the establishment or the central management of an SCE and before each meeting of negotiations with it. Such meeting of the special negotiating committee may not last longer than one day. When the competent body of persons participating in the establishment or the central management of an SCE so agree, the special negotiating committee may convene more frequently and/or for a longer period.
3. The participating legal entities and/or natural persons or the central management of an SCE must provide premises and work equipment for meetings of the special negotiating committee, as well as ensure interpretation and adequate organisation of meetings.
4. Meetings of the special negotiating committee shall be private, unless otherwise decided.
5. Minutes shall be taken of the meetings of the special negotiating committee. The Chairman of the meeting and a person authorised by the committee shall sign the minutes of the meeting.
 
Article 14. Expenses Related to the Formation of the Special Negotiating Committee and its Operational Expenditure
1. Any expenses relating to the formation of the special negotiating committee and participation of its members in meetings or negotiations with the competent body of persons participating in the establishment or the central management of an SCE shall be covered by the participating legal entities and/or natural persons by agreement, or by the established SCE. These expenses shall also include travel, health insurance, life assurance, accommodation and subsistence expenses of the members of the special negotiation body. The amount of these expenses and the procedure of compensation thereof shall be established by the Government of the Republic of Lithuania.
2. If, within 30 days from the end of a meeting of the special negotiating committee, travel, health insurance, life assurance, accommodation and subsistence expenses incurred by a member of the special negotiating committee are not covered, such expenses must, within 30 days from a separate written demand, be covered by the participating legal entity and/or natural person, an SCE, the concerned company controlled by an SCE or the concerned establishment with whom the member of the special negotiating committee is or has been related by employment relations.
3. The provisions of paragraph 2 of this Article shall also apply in the cases when the anticipated registered office of the SCE will not be situated in the Republic of Lithuania, but the participating legal entity, or the concerned controlled company has a registered office in the Republic of Lithuania, or the concerned establishment operates in the Republic of Lithuania, or the participating natural person has a permanent place of residence in the Republic of Lithuania, with whom the member of the special negotiating committee, requesting to cover the expenses is or has been related by employment relations, and also when the registered office of the established SCE is not situated in the Republic of Lithuania, but the company controlled by the SCE has its registered office in the Republic of Lithuania or the establishment of the SCE operates in the Republic of Lithuania.
4. If the special negotiating committee invites one or more experts, as provided for in paragraph 3 of Article 18 of this Law, and if the special negotiating committee and the competent body of persons participating in the establishment or the central management of an SCE do not reach an agreement on a higher number of paid experts, the participating legal entities and/or natural persons or the SCE must cover the expenses of one expert only.
5. In the absence of an agreement between the participating legal entities and/or natural persons or the established SCE regarding covering of expenses related to the formation of the special negotiating committee and the participation of the members of the special negotiating committee in its meetings or negotiations, the expenses, except for those referred to in paragraph 2 of this Article, shall be covered jointly and severally by these legal entities and/or natural persons or the central or other level of management of the SCE.
 
Article 15. Competence of the Special Negotiating Committee
1. The special negotiating committee shall have the right to decide:
1) to open or not to open the negotiations with the competent body of persons participating in the establishment or the central management of an SCE concerning the involvement of employees in the SCE;
2) to terminate the negotiations already opened with the competent body of persons participating in the establishment or the central management of an SCE.
2. A decision not to open the negotiations with the competent body of persons participating in the establishment or the central management of an SCE or to terminate the negotiations already opened may be taken by the votes of 2/3 of the members of the special negotiating committee representing at least 2/3 of the employees, if these members represent employees employed in at least two Member States. This provision shall not apply when an SCE is established by converting a cooperative society (cooperative) where the participation procedure has already been set.
3. When a decision not to open the negotiations or to terminate the negotiations already opened has been taken, legal acts and/or the established practice of the Member States in which the employees of the SCE are employed shall apply with regard to the involvement of employees, not the provisions of Chapter IV of this Law.
4. The competent body of persons participating in the establishment or the central management of an SCE shall be immediately informed in writing about the decisions referred to in paragraph 1 of this Article. The special negotiating committee may decide to inform other organisations, including the trade unions.
5. When a decision not to open negotiations or to terminate them has been taken, the negotiations shall be reopened when at least 10% of the employees of an SCE, the establishments of the companies controlled by it, or their representatives submit a written request to the central management of the SCE by at least, at the earliest two years after the abovementioned decision, unless the parties agree to reopen the negotiations sooner. If the special negotiating committee decides to reopen the negotiations with the competent body of persons participating in the establishment or the central management of the SCE, but no agreement is reached at the negotiations, the rules set out in Chapter IV of this Law shall not apply.
 
Article 16. Beginning of the Negotiations
1. The competent body of persons participating in the establishment or the central management of the established SCE, having received a notification about the decision of the special negotiating committee to open negotiations, must, within 30 days, convene the first meeting of the special negotiating committee and the competent body of persons participating in the establishment.
2. The members of the special negotiating committee and administrative or management bodies or the head of, respectively, the participating legal entities, the concerned controlled companies and the concerned establishments in which the members of the special negotiating committee are employed, as well as the participating natural persons or administrative or management bodies or the head of, respectively, an SCE, the companies and establishments controlled by it in which the members of the special negotiating committee are employed must be informed in writing about the convocation of the first negotiation meeting not later than 14 days prior to the meeting.
3. A notification about a negotiation meeting must indicate the following:
1) the establishment or the company in which a member(s) of the special negotiating committee who is invited to the negotiation meeting is employed or a natural person whose employee(s) is a member(s) of the special negotiating committee who is invited to the negotiation meeting;
2) the name, surname and position of a member(s) of the special negotiating committee, who is invited to the negotiation meeting;
3) the date, time and venue of the negotiation meeting;
4) the agenda of the negotiation meeting;
5) the time limits and the procedure for covering travel, health insurance, life assurance, accommodation and subsistence expenses incurred by the members of the special negotiating committee.
 
Article 17. Duration of the Negotiations
1. The negotiations may continue for a period not exceeding six months from the formation of the special negotiating committee.
2. The special negotiating committee and the competent body of persons participating in the establishment or the central management of the established SCE may decide, by joint agreement, to extend the negotiations for up to one year from the formation of the special negotiating committee.
 
Article 18. The Procedure for Holding Negotiation Meetings
1. The competent body of persons participating in the establishment or the central management of the established SCE and the special negotiating committee shall agree on the procedure of holding negotiation meetings, the venue and time of negotiation meetings, the time limits and the procedure for submitting notifications of meetings, the procedure for chairing and providing secretarial services for meetings.
2. Minutes must be taken of negotiation meetings. The Chairman of the meeting and a representative authorised by the other party to the negotiations shall sign minutes of each meeting.
3. The special negotiating committee may request experts selected at its own discretion.
 
Article 19. Outcome of Negotiations
1. The negotiations shall terminate when the special negotiating committee and the competent body of persons participating in the establishment or the central management of the established SCE reach an agreement concerning the involvement of employees in the SCE.
2. The agreement on the involvement of employees in the SCE must specify:
1) the scope of the agreement;
2) the composition, number of members and allocation of seats on the SCE Works Council which will be the discussion partner of the central management in connection with arrangements for informing and counselling the employees of the SCE and the companies and establishments controlled by it, as well as the rules pursuant to which the number of the members of the SCE Works Council can be changed and the rules for changing the number of seats thereof in different Member States due to the changes in the structure of the SCE and the number of employees in the Member States or in the controlled companies, establishments or the establishments of the controlled companies;
3) the functions of the SCE Works Council and the procedure for notification thereof and for holding consultations with it;
4) the frequency, venue and duration of meetings of the SCE Works Council;
5) the financial and material resources allocated, and the services provided to the SCE Works Council;
6) if, at the negotiations, it is decided to establish other information and consultation procedure instead of a SCE Works Council, detailed arrangements for the implementation of such procedure;
7) if, at the negotiations, it is decided on participation, detailed arrangements for the implementation of the procedure for participation, including the number of the members in the administrative or supervisory body of the SCE whom the employees will be entitled to elect, appoint, recommend or approve their appointment, the procedures which the employees may apply when electing, appointing, recommending or approving the appointment of these members, and the rights of the said members;
8) the date of entry into force of the agreement and its duration, and the cases where the parties have renegotiate the agreement and the procedure for such renegotiation including the cases when structural changes occur after the establishment of an SCE and/or the companies controlled by it and/or the establishments.
3. The right of the employees to participate in the general meeting of members and/or the meetings of a structural division(s), as well as the rules and/or the procedure for exercising this right may be provided for in the agreement.
4. In the case an SCE is established by conversion, the rules on employee involvement, provided for in the agreement, must not be less favourable than the ones existing within the cooperative society (cooperative) to be converted into an SCE.
5. The agreement shall not be subject to the provisions of Chapter IV of this Law, except for the case where during the negotiations the special negotiating committee and the competent body of persons participating in the establishment or the central management of the established SCE reach an agreement that the involvement of employees in the SCE will be implemented under the provisions of Chapter IV of this Law.
6. The agreement between the special negotiating committee and the competent body of persons participating in the establishment or the central management of the established SCE must be executed in writing and signed by at least two persons authorised by the competent body of persons participating in the establishment or the central management of the established SCE and two members authorised by the special negotiating committee.
 
Article 20. The Employees’ Right to Participate in the General Meeting of Members and/or the Meeting of a Structural Division(s)
1. The employees of an SCE and/or their representatives shall have the right to participate in the general meeting of members and/or the meetings of a structural division(s) with voting rights, if:
1) it is agreed so in the agreement on the involvement of employees in the SCE; or
2) the SCE is established by conversion and the employees and/or their representatives of a cooperative society (cooperative) under conversion enjoy such right. In such case, the requirement specified in paragraph 4 of Article 19 of this Law must be complied with; or
3) the SCE is established by means other than that specified in subparagraph 2 of paragraph 1 of this Article and the employees and/or their representatives of the participating cooperative society (cooperative)  enjoy such right.
2. The right stipulated in subparagraph 3 of paragraph 1of this Article shall be exercised only if:
1) by the deadline for negotiations laid down in Article 17 of this Law, no agreement has been concluded on the involvement of employees in the SCE and the competent body of each participating cooperative society (cooperative) decides  to apply the rules laid down in Chapter IV of this Law. In such case the special negotiating committee shall not take the decision referred to in paragraph 1 of Article 15 not to open negotiations or to terminate the negotiations already opened; and
2) Article 33 of this Law is applied, except for its provisions related to the establishment of an SCE by way of merger;
3) the employees and/or their representatives of the participating cooperative society (cooperative)  enjoy such right and, prior to the establishment of the SCE, exert a dominant influence have as defined in paragraph 2 of Article 3 of this Law.
3. In the case of transfer of the registered office of an SCE to a Member State whose laws do not provide for such participation pursuant to paragraph 4 of Article 59 of the Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE), such voting rights shall cease to apply.
 
Article 21. Conditions for the Implementation of the Employees’ Right to Participate in the General Meeting of Members and/or the Meeting of a Structural Division(s)
1. The rules that have been applied when regulating the participation of the employees and/or their representatives in the general meeting of members and/or the meetings of a structural division(s) with voting rights prior to converting it into an SCE shall also apply in the case when the SCE is established after the conversion of such cooperative society (cooperative) provided the central or other level management of the SCE is situated in the Member State where such right is exercised in compliance with legal acts and/or the established practice of that Member State.  If this right of the employees or employees’ representatives is exercised pursuant to the agreement on the involvement of employees in the SCE, referred to in Article 19 of this Law, and other rules are laid down in the agreement and/or other procedure for exercising this right is stipulated therein, the provisions of the agreement shall apply.  
2. When an SCE is established in the manner other than that referred to in paragraph 1 of this Article, the employees or the employees’ representatives of the companies or establishments controlled by it shall have the right to participate in the general meeting of members and/or the meetings of a structural division(s) with voting rights only in the case where the SCE, the companies or establishments controlled by it are subject to legal acts and/or the established practice of that Member State under which such right is exercised. This right of the employees or the employees’ representatives can also be exercised when it is agreed so in the agreement on the involvement of employees in the SCE, referred to in Article 19 of this Law.
 
CHAPTER IV
STANDARD RULES
 
Article 22. Preconditions for the Application of Standard Rules
1. The standard rules laid down in this Chapter shall apply when:
1) an agreement that the involvement of employees in the SCE will be carried out in compliance with the provisions of this Chapter is reached at the negotiations between the special negotiating committee and the competent body of persons participating in the establishment or the central management of the established SCE; or 
2) by the deadline for negotiations laid down in Article 17 of this Law, no agreement has been concluded on the involvement of employees in the SCE and the competent body of each participating legal entity and/or the participating natural persons or the central management of the established SCE decide  to apply the rules laid down in this Chapter. In such case the special negotiating committee shall not take the decision referred to in paragraph 1 of Article 15 of this Law not to open negotiations or to terminate the negotiations already opened; or
3) the agreement on the involvement of employees in the SCE breaches the provisions laid down in paragraph 4 of Article 19 of this Law.
2. The rules laid down by this Chapter shall apply to an SCE whose registered office is situated in the Republic of Lithuania from the date of the establishment of the SCE.
 
Article 23. Composition and Establishment of a SCE Works Council
1. The provisions laid down in paragraphs 2 and 5 of Article 10 of this Law shall apply, mutatis mutandis, to the composition of a SCE Works Council.
2. Upon the establishment of an SCE, the central management must, not later than within 30 days, inform in writing the employees’ representatives in the companies or establishments, and, in the absence of such representatives, inform the employees at the meetings of the entire body of employees and/or by other means for providing information used in the companies or establishments, about:
1) the total number of the employees in the SCE, the number of employees in each company controlled by it, as well as in each establishment of the SCE, and the total number of employees in each Member State;
2) the number of seats calculated in the manner prescribed by Article 33 of this Law, which are allocated in respect of the members appointed (elected) by the employees of each company and establishment, as well as the allocation of seats according to different Member States.
3. If the registered office of an SCE or its controlled company is situated in the Republic of Lithuania, or an establishment of the SCE or an establishment of the company controlled by it operates in the Republic of Lithuania, a member(s) of the SCE Works Council from the Republic of Lithuania shall be respectively appointed by the representatives of that company or its establishment. If several controlled companies have their registered office in the Republic of Lithuania and/or one or several establishments operate in the Republic of Lithuania, a member(s) of the SCE Works Council shall be appointed by common agreement of the representatives of all employees of those companies and/or establishments.
4. If representatives of the employees of an SCE which has its registered office in the Republic of Lithuania, a company controlled by it or a concerned establishment of an SCE or a company controlled by it operating in the Republic of Lithuania fail to appoint a member(s) of the SCE Works Council within 30 days from the submitting of the information referred to in paragraph 2 of this Article, such member(s) shall be elected by secret ballot at the general meeting of the entire body of employees, which may be convened by any employees’ representative. The same procedure shall also apply in the absence of the employees’ representatives in that company or establishment. In this case, a meeting of the entire body of employees must be convened by the administrative or management body of the company, or the head of the concerned establishment.
5. If several companies, the controlled companies have their registered office in the Republic of Lithuania and/or one or several concerned establishments operate therein, and the employees’ representatives from these companies and/or establishments failed, within 30 days from the submitting of the information referred to in paragraph 2 of this Article, appoint a member(s) of the SCE Works Council from the Republic of Lithuania or, in the absence of the employees’ representatives in at least one SCE having its registered office in the Republic of Lithuania, or in at least one company controlled by it which has its registered office in the Republic of Lithuania, or in at least one concerned establishment of the SCE which operates in the Republic of Lithuania or the establishment of the company controlled by it and operating in the Republic of Lithuania, such a member(s) shall be elected by secret ballot at a general conference of delegates of the employees of the SCE, the companies controlled by it, legal entities and/or their establishments.  At the conference, one delegate shall represent every ten employees of a company or its establishment. Where there are less than ten employees at the SCE, the company controlled by it, legal entity or establishment, they shall also be represented by one delegate. The conference must be convened, respectively, by the administrative or management body of that company or its establishment which employs most employees, or by the head of the establishment.
6. The provisions of paragraph 5 of Article 62 of the Labour Code of the Republic of Lithuania shall apply, mutatis mutandis, to the general meeting of the entire body of employees and the general conference of the delegates of the employees of an SCE, the companies and/or establishments controlled by it.
7. Other level of management must provide technical assistance referred to in paragraph 3 of Article 13 of this Law for the organisation of a general meeting of the entire body of employees or a general conference of delegates of the employees of an SCE, the companies and (or) establishments controlled by it.
8. The procedure laid down in this Article shall also apply when replacing members of the SCE Works Council.
9. Members of the SCE Works Council representing employees of the controlled companies which have their registered office in other Member States or the establishments of the SCE operating in those States, or the establishments of companies controlled by it shall be appointed (elected) in compliance with legal acts and/or the established practice of those Member States.
10. Where the registered office of an SCE is situated in another Member State, the provisions of paragraphs 3-9 of this Article shall apply, mutatis mutandis, when appointing (electing) the employees’ representatives to the SCE Works Council.
11. If, due to the changes in the structure and the number of employees of an SCE in the Member States, or the companies and establishments controlled by it or the establishments of the controlled companies, it is necessary to increase the number of the members of the SCE Works Council, the SCE Works Council shall, taking into consideration the opinion of the central management, decide on appointment (election) of an additional member of the SCE Works Council. Having taken such decision, the SCE Works Council shall apply to the central management with a request to initiate a procedure for appointing (electing) a new member(s) of the SCE Works Council in accordance with the provisions of this Law.
 
Article 24. Commencement and Expiry of Membership in the SCE Works Council
1. An employee shall become a member of the SCE Works Council from the date of his appointment or election.
2. Membership in the SCE Works Council shall expire:
1) upon the death of the member;
2) upon termination of the employment relations with a legal entity or establishment whose employees or the employees’ representatives have appointed or elected him;
3) upon resignation of the member;
4) upon the expiry of the term of office of the SCE Works Council;
5) when an employees’ representative(s) who appointed the member, recalls him.
3. When the membership expires on the grounds set out in subparagraphs 1-3 and 5 of paragraph 2 of this Article and not less than 6 months are left before the expiry of the term of office of the SCE Works Council, a new member must be appointed or elected according to the procedure established by this Law.  He shall be appointed or elected only for the period, which ends upon the expiry of the term of office of the SCE Works Council.
 
Article 25. Notification on the Composition of the SCE Works Council
1. An employees’ representative(s) who has appointed a member(s) of the SCE Works Council shall notify in writing the central management about the name, surname of the member of the SCE Works Council, the name of the establishment or the company in which he is employed, his position and the address for contact. The same duty to notify the central management about the elected member(s) of the SCE Works Council shall be imposed on the head of the establishment or the administrative or management body of the company who convened a general meeting of the entire body of employees and/or a general conference of delegates of the employees of the establishments of the company and/or the companies where the member(s) were elected.
2. When notifying about the appointment of a member of the SCE Works Council, an extract of the minutes of a meeting of an employees’ representative or an extract of the minutes of a general meeting of the employees’ representatives shall be submitted, and when notifying about the election - the copies of the minutes of a meeting or a conference and the list of the participants shall be submitted.
3. Upon the receipt of the documents referred to in paragraph 2 of this Article, the central management shall notify in writing the administrative and management bodies of all participating legal entities and the concerned controlled companies operating in the Member States or the heads of the concerned establishments about the composition of the SCE Works Council. The notification must include the names and surnames of the members of the SCE Works Council, the name of the establishment or company in which they are employed, as well as their positions and the addresses for contact.
4. Upon the receipt of the information referred to in paragraph 3 of this Article, the administrative or management bodies, as well as the heads of the establishments, shall immediately communicate the information contained in the notification to the employees’ representatives functioning in the company or the establishment.
 
Article 26. The Term of Office of the SCE Works Council
The term of office of the SCE Works Council shall be four years. The term of office shall commence on the date when the SCE Works Council convenes for its first meeting. Members of the SCE Works Council and the administrative or management bodies or the heads of, respectively, the participating legal entities, the concerned controlled companies and the concerned establishments in which the members of the SCE Works Council are employed shall be informed in writing about the first meeting of the SCE Works Council not later than 14 days prior to the convocation.
 
Article 27. Organisation of Activities of the SCE Works Council
1. At its first meeting, the SCE Works Council shall, by the majority of votes of all members, elect chairman of the SCE Works Council and his deputy and approve the rules of procedure of the SCE Works Council. In the event of a tie vote, the Chairperson of the meeting shall have the casting vote.
2. The Chairman of the SCE Works Council (and when he is unable to carry out the duties – the Deputy Chairman) shall:
1) preside over the meetings of the SCE Works Council;
2) according to the procedure established by the rules of procedure of the SCE Works Council, represent the SCE Works Council in its relations with the central management;
3) organize storage and management of the documents of the SCE Works Council;
4) carry out other functions assigned to him by the decision of the SCE Works Council, as well as those set out in the rules of procedure of the SCE Works Council.
3. If the SCE Works Council consists of more than six members, the SCE Works Council shall elect a committee of the SCE Works Council, consisting of three members. It shall be responsible for carrying out the functions of the SCE Works Council during the period between the meetings of the SCE Works Council. Where possible, the members of the committee of the SCE Works Council must be from different Member States. The Chairman of the SCE Works Council shall be ex officio the Chairman of the committee of the SCE Works Council.
4. The SCE Works Council or the committee of the SCE Works Council shall take its decisions by the majority of votes of all its members. Each member shall have one vote.
 
Article 28. Meetings of the SCE Works Council and the Committee of the SCE Works Council
1. The first meeting, as well as regular meetings of the SCE Works Council, shall be convened by the central management. The central management shall convene the first meeting not later than within 90 days from the formation of the SCE Works Council.
2. A regular meeting of the SCE Works Council shall be held each year before the joint meeting with the central management. The consideration of a report specified in paragraph 1 of Article 31 of this Law shall be included in the agenda of the joint meeting.
3. In the cases set out in Article 32 of this Law, the committee of the SCE Works Council (in the absence thereof – the SCE Works Council) shall also have the right to convene extraordinary meetings. After coordination with the central management on the venue and date of a meeting, the Chairman of the SCE Works Council shall apply to the central management with a written request to convene the meeting. The central management shall, not later than 14 days prior to the meeting, inform the members of the SCE Works Council or the committee of the SCE Works Council, as well as the administrative or management body of the company or the establishment in which a member of the SCE Works Council or the committee of the SCE Works Council is employed, or the head of the concerned establishment, about the venue and date of the forthcoming meeting.
4. A meeting of the SCE Works Council or of the committee of the SCE Works Council may not last longer than one day. If the central management agrees, the SCE Works Council or the committee of the SCE Works Council may convene more frequently and/or for a longer period than specified in paragraph 2 of this Article.
5. The central management must provide premises and work equipment for the meetings of the SCE Works Council or of the committee of the SCE Works Council, as well as ensure interpretation and proper organisation of the meetings.
6. Meetings of the SCE Works Council or the committee of the SCE Works Council shall be private, unless decided otherwise.
7. Minutes shall be taken of the meetings of the SCE Works Council or the committee of the SCE Works Council. The Chairman of the meeting and a person authorised by the Council or the committee shall sign the minutes of the meeting.
 
Article 29. Participation of Experts
The SCE Works Council or the committee of the SCE Works Council may invite experts selected at its own discretion.
 
Article 30. Expenses Related to the Formation and Operation of the SCE Works Council
1. All the expenses related to the formation of the SCE Works Council and the participation of the members of the SCE Works Council in the meetings of the SCE Works Council or the committee of the SCE Works Council, as well as in joint meetings with the central management or in the meetings referred to in Article 32 of this Law with any other level of management shall be borne by the SCE. These expenses shall also include travelling, health insurance, life assurance, accommodation and living expenses of the members of the SCE Works Council. The amount of these expenses and the procedure for compensation thereof shall be established by the Government of the Republic of Lithuania.
2. If an SCE fails to cover travelling, health insurance, life assurance, accommodation and living expenses of a member of the SCE Works Council within 30 days, such expenses must, within 30 days from a separate written demand, be covered by the company controlled by the SCE, the SCE establishment or the establishment of its controlled company with whom the member of the SCE Works Council requesting to cover the expenses is or has been related by employment relations.
3. The provisions of paragraph 2 of this Article shall also apply in the cases when the registered office of an SCE is situated not in the Republic of Lithuania, but the company controlled by the SCE has a registered office in the Republic of Lithuania or the establishment of the SCE or the establishment of its controlled company, with whom the member of the SCE Works Council requesting to cover the expenses is or has been related by employment relations, operates in the Republic of Lithuania.
4. If the SCE Works Council or the committee of the SE works Council invites one or several experts, as provided for in Article 29 of this Law, and if the SCE Works Council and the central management fail to reach an agreement on a higher number of paid experts, the SCE must cover the expenses related to one expert only.
5. The members of the SCE Works Council shall be entitled to time off for training, if this is necessary for the fulfilment of their functions. Wages in the amount of not less than an average wage shall be paid for the training period.
 
 
Article 31. Regular Information and Consultation
1. After the close of the calendar year, the central management must, within three months, draw up and present to the SCE Works Council an annual report on the economic status and prospects of an SCE, its establishments, as well as companies and their establishments controlled by it.
2. An annual report must cover at least the following information regarding an SCE and its controlled companies:
1) the structure;
2) economic and financial status and the initiatives aimed at increasing social responsibility of the employer;
3) the probable development of the business, including the changes in the volume of sales, production and services and the future prospects;
4) the number of employees calculated in accordance with the procedure laid down by this Law; as well as an analysis of the causes of the changes in this number;
5) the situation in the field of employment and the perspectives of the employment development;
6) investment programmes which are being carried out or planned to be carried out;
7) substantial organisational changes;
8) introduction of new working methods and production technologies;
9) the intended transfers of a company, production or business, or the parts thereof;
10) ceasing to exist, conversion, purchase or sale of the companies, as well as termination of activities of the establishments of the companies or setting-up of new establishments;
11) collective redundancies and the measures to be applied to mitigate the consequences of such redundancies.
3. An annual report shall be considered at a joint meeting of the SCE Works Council and the central management. The meeting must be held not earlier than 30 days after submitting the report to the SCE Works Council. Minutes must be taken of the joint meeting of the SCE Works Council and the central management. The minutes of the meeting shall be signed by persons authorised by the SCE Works Council and the central management. When necessary, the members of the SCE Works Council or the committee of the SCE Works Council shall be entitled to meet with the representatives of the central management prior to each joint meeting.
4. Copies of all documents submitted to the general meeting of members and the agenda of the meetings of the administrative or management bodies must be submitted together with an annual report to the joint meeting of the SCE Works Council and the central management.
5. The central management must, within 30 days, forward the annual report together with the minutes of the joint meeting of the SCE Works Council and the central management to any other level of management.
 
Article 32. Information and Consultation under Exceptional Circumstances
1. The committee of the SCE Works Council or, in the absence thereof, the SCE Works Council must be immediately notified in writing about the occurrence of exceptional circumstances. The circumstances shall be considered exceptional, if they materially affect the interests of the employees of an SCE, its establishment, a company or establishment controlled by it, particularly in the event of re-location of the company, the production or business, or a part thereof, termination of the activities of an establishment or a company, as well as collective redundancies. The central management or any other level of management entitled to independently take decisions with regard to exceptional circumstances shall have the duty to notify.
2. After the receipt of the notification referred to in paragraph 1 of this Article, the SCE Works Council or the committee of the SCE Works Council may apply to the central management or any other level of management, requesting to immediately convene a joint meeting of the committee of the SCE Works Council (the SCE Works Council) and the central management or any other level of management. During the meeting, consultations must be held on measures to be undertaken with a view of defending the employees’ interests or mitigating social and economic consequences for the employees.
3. If the committee of the SCE Works Council participates in information and consultation procedures, the central management or any other level of management must invite to the meeting specified in paragraph 2 of this Article the members of the SCE Works Council who have been appointed or elected by the employees or their representatives of the SCE or its establishment, the companies or their establishments controlled by it and which are directly concerned by the circumstances in question.
4. The committee of the SCE Works Council must immediately inform about the issues considered and decisions taken at the joint meeting of the central management or any other level of management and the committee of the SCE Works Council all members of the SCE Works Council, and the latter – the representatives of the employees of the SCE or its establishment, the companies or their establishments controlled by it and which are directly concerned by the said circumstances, and in the absence thereof – inform at the staff meetings. The same rule shall apply when the SCE Works Council participates in information and consultation procedures.
5. If the central management or any other level of management decides not to act in accordance with the opinion expressed by the committee of the SCE Works Council or the SCE Works Council, the committee of the SCE Works Council or the SCE Works Council shall have the right to immediately hold another meeting with the central management or any other level of management.
 
Article 33. Participation in the Activities of the Administrative or Management Body of an SCE
1. The rules that were observed when regulating the participation of the employees in the administrative or supervisory body of a cooperative society (cooperative) prior to converting it into an SCE, shall also apply in the case when the SCE is established after the conversion of such cooperative society (cooperative). The provisions of this Article shall apply, mutatis mutandis, to the participation of the employees in the administrative or supervisory body of the SCE.
2. If an SCE is established in any other manner, the provisions of this Article shall apply when:
1) before the establishment of the SCE, one or several forms of employees’ participation were applied in one or more participating legal entities which employed at least 50% of the total number of employees in all the participating legal entities; or
2) such a decision is taken by the special negotiating committee, when, before the establishment of the SCE, one or several forms of employees’ participation were applied in one or more participating legal entities which employed less than 50% of the total number of employees in all the participating legal entities.
3. When an SCE is established in the manner other than that referred to in paragraph 1 of this Article, the employees or the employees’ representatives of such SCE, its controlled companies or their establishments shall have the right to elect, appoint or recommend such number of members of the administrative or supervisory body of the SCE that it would be in proportion to the highest number of such members that was set in the participating legal entities and the establishments before the establishment of the SCE. This provision shall also apply in the case when the appointment of members to the administrative or supervisory body of the SCE is opposed.
4. The SCE Works Council shall decide on the allocation of seats within the administrative or supervisory body of the SCE among the appropriate Member States or on the way in which the employees of the SCE may recommend or oppose the appointment of the members of these bodies. If the allocation of the number of seats chosen by the SCE Works Council is not applied in at least one Member State, the SCE Works Council must, seeking a balanced allocation of seats, give priority to the employees of that Member State in which the registered office of the SCE is registered.
5. The provisions of subparagraphs 3-10 of Article 23 of this Law shall apply, mutatis mutandis, when the representatives of the employees of the SCE operating in the Republic of Lithuania, the companies controlled by the SCE whose registered office is situated in the Republic of Lithuania, or the establishments of the SCE which operate in the Republic of Lithuania, or the establishments of the companies controlled by the SCE are appointed or elected to the administrative or supervisory bodies of the SCE. The employees of the companies controlled by the SCE whose registered office is situated in any other Member State, and their establishments, as well as of the establishments of the SCE operating in any other Member State or their representatives shall be elected, appointed, recommended to the administrative or supervisory bodies of the SCE, or their appointment shall be approved in compliance with legal acts and/or the established practice of those Member States.
6. Each member of the administrative body or supervisory body of the SCE who has been elected, appointed or recommended according to the procedure established by this Law shall have the same rights and obligations as the members elected at the general meeting of members, including the right to vote.
7. The provisions of this Article shall apply in the case of an SCE established by merger:
1) if, before the establishment of the SCE, one or several forms of employees’ participation were applied in one or more participating cooperative societies (cooperatives) which employed at least 25% of the total number of employees in all the participating cooperative societies (cooperatives) , or
2) such decision is taken by the special negotiating committee, if, before the establishment of the SCE, one or several forms of employees’ participation were applied in one or more participating cooperative societies (cooperatives) which employed less than 25% of the total number of employees in all the participating cooperative societies (cooperatives).
8. The provisions of this Article may not apply in an SCE, if, before the establishment of the SCE, none of the forms of employees’ participation was applied in any participating legal entity.  
9. The special negotiating committee shall adopt the decision regarding which particular form of employees’ participation will be applied in an SCE, if, before the establishment of the SCE, there was more than one form of employees’ participation applied in the participating legal entity.
10. The special negotiating committee must immediately inform the competent bodies of the participating persons about the decisions referred to in paragraphs 2, 7 and 9 of this Article.
 
Article 34. Provision of Information to the Employees’ Representatives
1. The SCE Works Council, the committee of the SCE Works Council must, at least once a year, inform the employees’ representatives, or, in their absence – the employees, of the SCE and its establishment, the companies or establishments controlled by the SCE about their activities and the outcome of the information and consultation procedures.
2. The SCE Works Council may obligate its member(s) to submit the information referred to in paragraph 1 of this Article to the employees’ representatives of a certain establishment of the company or of the controlled company, or directly to the employees employed therein in the Member State.
 
Article 35. End of Activities of the SCE Works Council
1. The SCE Works Council shall carry out its functions until the expiry of the term of office, except for the cases provided for in this Article.
2. The SCE Works Council shall, not later than 6 months before the expiry of the term of office of the SCE Works Council, by the majority of votes of its members, decide to open negotiations with the central management concerning a new agreement on the involvement of employees in the SCE. An agreement, provided for in Article 19 of this Law, may be reached at the negotiations. In such case, the SCE Works Council shall acquire all the rights and obligations of the special negotiating committee, and the length of its term of office shall be extended for the period of negotiations with the central management.
3. If the central management shall not, within 6 months from receipt of the notification about the decision of the SCE Works Council referred to in paragraph 2 of this Article, open negotiations or no agreement is reached within one year from the receipt of such notification, the rules of this Chapter shall continue to apply and a new SCE Works Council must be established in accordance with the procedure laid down by this Chapter.
 
CHAPTER V
FINAL PROVISIONS
 
Article 36. Liability for Violations of the Law
Persons who have violated this Law shall be held liable in accordance with the procedure laid down by the laws of the Republic of Lithuania.
 
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
 
 
president of the republic                                                 VALDAS ADAMKUS
                                                                                                Annex to the
Republic of Lithuania Law
On the Involvement of
Employees in the European
Cooperative Societies (SCEs)
 
 
 
IMPLEMENTED EU LEGAL ACTS
 
 
Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees (OJ 2004 Special edition, Chapter V, Volume 04, p. 338).