Law on the Involvement of Employees in a European Company (SE)


Published: 2005-12-05

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REPUBLIC OF LITHUANIA
 
LAW ON THE INVOLVEMENT OF EMPLOYEES
IN A EUROPEAN COMPANY (SE)
 
12 May 2005 No. X-200
Vilnius
 
CHAPTER I
GENERAL PROVISIONS
 
Article 1 Purpose of the Law
1. The purpose of the Law is to ensure the involvement of employees in decision-making in the European public limited-liability companies (European company - Societas Europaea, hereinafter referred to as "SE").
2. The provisions of the Law shall implement the legal act of the European Union presented in the annex to this Law.
 
Article 2. Scope of the Law
1. The Law shall be applied if the registered office of the SE is situated or the registered office of the SE being established will be situated in the Republic of Lithuania.
2. Irrespective of where the registered office of the SE is situated or where the registered office of the SE being established will be situated, the Law shall also be applied when determining:
1) the number of employees of the participating companies, whose registered office is situated in the Republic of Lithuania, concerned controlled companies or concerned establishments situated in the Republic of Lithuania as well as of the SE;
2) the procedure and terms and conditions for the appointment (election) to special negotiating committees of representatives of the participating companies whose registered office is situated in the Republic of Lithuania, concerned controlled companies, as well as concerned establishments operating in the Republic of Lithuania ;
3) the procedure for the appointment (election) to the SE works Councils of representatives of the SEs operating in the Republic of Lithuania, the controlled companies of the SE whose registered office is situated in the Republic of Lithuania or establishments of the SE which operate in the Republic of Lithuania or establishments of the SE’s controlled company as well as the procedure for their appointment (election) to the SE supervisory or administrative bodies;
4) the guarantees and protection of rights of the members of the special negotiating committee, the members of the SE works Council as well as the members elected, appointed, recommended to the supervisory or administrative SE bodies by the employees or their representatives, whose appointment was approved of by the employees or their representatives, their right to compensation of travelling, health and insurance as well as life assurance, accommodation and living expenses where the members are connected by industrial relations with the participating company 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 SE controlled company whose registered office is situated in the Republic of Lithuania or with the SE establishment operating in the Republic of Lithuania or with the establishment of its controlled company.
 
Article 3. Definitions
For the purposes of this Law:
1. “Central management” means the competent body of the SE management or administration.
2. “Participation” means the influence of the employees’ representatives on the company management by way of exercising the right to elect or appoint the members of the company’s supervisory or administrative body, to recommend to appoint them and/or to oppose their appointment.
“3. “Employees’ representatives” means the representatives of the employees of the SE, the participating company or the concerned controlled company or the concerned establishment; the representatives of the employees of the company whose registered office is situated in the Republic of Lithuania or of the establishment operating 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 companies whose registered office is situated in another Member State and employees of establishments operating in another Member State means representatives of employees within the meaning provided for by the laws of the Member States and/or established practice. In certain cases the SE works Council set up according to the procedure established by this Law, the select committee of the SE works Council or the special negotiating committee shall also be considered as the employees’ representative.
4. ”Involvement of employees” means any mechanism, including information, consultation, and participation through which employees’ representatives may exercise an influence on decisions to be taken within the company.
5. “ SE” means a legal entity created in accordance with Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE).
6. “SE works Council” means the body representative of the employees formed in accordance with the procedure established in this Law with the purpose of exercising the right of the employees of the SE, its controlled companies or establishments to information, consultation and participation. For the purposes of this Law the SE works Council shall 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 SE established in another Member State, of the employees of the controlled companies or establishments of the SE.
7. “Information” means transfer of information (data) on questions which concern the SE itself or any of its controlled companies, concerned establishments or undertakings situated in another Member State or questions which exceed the powers of the decision-making organs in a single Member State at a time to the SE works Council, the select committee of the SE works Council and/or the employees’ representatives with a view to introducing them to the substance of the matter.
8. “Other level of management” means management or administrative body of the SE controlled company or head of the establishment of the SE or of the establishment of the SE controlled company.
9. “Competent body of the participating companies” means the body formed by agreement by management or administrative bodies of the participating companies for negotiating with the special negotiating committee for the involvement of the employees within the SE.
10. “Consultation” means the exchange of views and the establishment and development of dialogue between the SE works Council, the SE works Council select committee and/or the employees’ representatives and the central management or other level of management.
11. “Controlled company” means a legal entity upon which another company may exert a decisive influence as defined in Article 4 of the Republic of Lithuania Law on European Works Councils.
12. "Special negotiating committee" means the body established in accordance with the provisions of this Law to negotiate with the competent body of the participating companies regarding the establishment of arrangements for the involvement of employees within the SE.
13. ”Participating company” means the company directly participating in the establishment of an SE.
14. “Concerned controlled company or concerned establishment” means a controlled company or establishment of a participating company which is proposed to become a controlled company or establishment of the SE upon its formation.
15. “Member State” means Member State of the European Union as well as European Economic Area Member State.
 
CHAPTER II
BASIC PRINCIPLES OF INVOLVEMENT OF EMPLOYEES IN THE SE
 
Article 4. Grounds for Involvement of Employees in the SE
1. The employees shall participate according to the procedure established in this Law in the decision-making in an SE as well as in the controlled companies of the SE whose registered office is situated in other Member States or the SE establishments operating in them.
2. Involvement in decision-making shall cover matters relating to the SE itself, to its controlled companies whose registered office is situated in other Member States or to the establishments operating in them or questions decision-making on which exceeds the powers of the decision-making organ or other level of management in a single Member State.
 
Article 5. Implementation of Involvement of Employees in a SE
1. For the purpose of implementing involvement of employees in a SE the SE works Council shall be established or other procedure of information, consultation and participation specified in subparagraphs 6 and 7 of paragraph 2 of Article 19 of this Law shall be laid down.
2. Central management shall provide conditions and ensure measures necessary for the formation and functioning of the SE 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 employees’ representatives.
3. The employees’ representatives shall be consulted at a time, in a manner and with a content which allows the employees' representatives on the basis of information provided, to express an 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 SE.
4. If immediately after the establishment of a SE substantial changes occur in the SE and in its controlled companies which show clearly that the purpose of establishment of the SE is depriving the employees of rights to employee involvement in decision making, new negotiations must be started according to the provisions of Chapter III of this Law. Substantial changes in the company concern changes in the number of employees in the SE, the companies controlled by it or changes of the company establishment methods which would have extended the involvement of employees in the company management had they been implemented before the establishment of the SE.
 
Article 7. Right to Information
1. The central management shall, when due, furnish information to the SE works Council, the SE works Council select 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 with a content which 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 SE works Council as well as members of the special negotiating committee, upon submitting a written obligation not to reveal any commercial/production or professional secret, shall have the right of access to the information considered as commercial/production or professional secret only when this is necessary for the performance of their duties.
3. Members of the SE works Council, any member of the special negotiating committee as well as any expert or interpreter included in the negotiations for the involvement of employees in the SE or in the activities of the SE works Council or the select committee, wherever these persons are, shall not be authorised to reveal to third persons the information which has been provided to them as commercial/production or professional secret. The obligation shall continue to apply even after the expiry of the terms of office of the employees’ representatives or termination of contractual relations with the interpreters.
4. The central administration may refuse in writing to transmit information considered as commercial/production or professional secret when the nature of the information is such that, according to objective criteria, it would be prejudicial to the company concerned or would seriously harm the functioning of it.
5. Having received the written refusal the SE works Council, the select committee of the SE works Council or the special negotiating committee may, within one month from the receipt of the refusal to provide information, apply to the court. After the court has ruled that the refusal to provide information is unjustified, the SE or the participating company shall be obligated to provide the information.
6. The granting of access to State, official, professional secrets and liability for the disclosure or unlawful use thereof shall be regulated by other laws.
 
Article 8. Protection and Guarantees of Rights of Employees’ Representatives
1. The members of the SE works Council, members of the special negotiating committee connected by industrial relations with the SE whose registered office is situated in the Republic of Lithuania, its controlled company or participating company, concerned controlled company as well as with the SE establishment operating in the Republic of Lithuania, the establishment of the controlled company or the concerned establishment must be provided conditions for attending the meetings of the SE works Council, the select committee, also the joint meetings with the central management and negotiations for the employee involvement in the SE, reserving for them the job and average wage. The same rule shall be applicable when members of the SE’s supervisory or administrative body elected by the employees or employees’ representatives attend the meetings of the SE’s supervisory or administrative body.
2. During their membership in the SE works Council or the special negotiating committee 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 without the consent of the representative of the employees who appointed them. In case the employees had been elected at the employees’ meeting or conference the territorial branch of the State Labour Inspectorate shall have the right of consent to their dismissal from work. In such case Article 134 of the Labour Code of the Republic of Lithuania shall apply mutatis mutandis to the procedure of dismissal of employees from work.
3. Members of the SE works Council, special negotiating committee, members of the SE’s supervisory or administrative body elected by the employees or employees’ representatives shall be provided from the day of their appointment (election) to the office protection of rights and guarantees by the legislation and/or by the established practice of the Member State in which the registered office of the company of employment is situated or in which the establishment of employment is operating.
 
CHAPTER III
ORGANISATION OF NEGOTIATIONS
 
Article 9. Initiation of Negotiations and Information
1. When a SE is being established the management or administrative bodies of the participating companies, concerned controlled companies or concerned establishments must initiate negotiations for the involvement of employees in the SE.
2. For that purpose the management and administrative bodies of the participating companies and concerned controlled companies or concerned establishments shall inform in writing as soon as possible but not later than within 30 days from the presentation to the manager of the Legal Entities Register of the draft terms of merger in case of an SE to be established by way of merger or creating a holding company or establishing a controlled company or draft terms for transforming the public limited-liability company into an SE the employees’ representatives in the companies or establishments or, in the absence of such representatives, inform the employees at the meetings of the entire body of employees and by other means used in companies or establishments for providing information on:
1) the pans of establishing the SE; presentation of information relating thereto;
2) the participating companies, concerned controlled companies and concerned establishments as well as employees’ representatives at these companies and establishments;
3) the total number of employees in all the participating companies, concerned controlled companies and concerned establishments and in each one of them separately as well as the total number of employees in every Member State;
4) 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;
5) the participation rights existing within the participating companies, 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.
3. The number of employees at the participating company, concerned controlled company and concerned establishment as well as the number of employees in all the participating companies, concerned controlled companies and concerned establishments in each Member State 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 companies about the involvement of employees in the SE.
2. The employees of participating companies, concerned controlled companies whose registered office is situated in one Member State or the employees of the concerned establishments operating in it 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 of an SE formed by way of merger there shall be such further additional members appointed or elected from each Member State representing the company which it is proposed will cease to exist as a separate legal entity one employees’ representative shall be additionally appointed or elected as the special negotiating committee member from each Member State in order to ensure that the special negotiating committee includes at least one member representing each participating company with the registered office situated in that Member State and which it is proposed will cease to exist as a separate legal entity following the registration of the SE. 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 companies is higher than the number of additional seats, the additional seats shall be allocated to participating companies in different Member States by decreasing order of the number of employees they employ.
4. Where a Member State is allocated more than one seat, measures shall be taken to ensure that employees’ representatives from different companies are appointed.
 
Article 11. Forming the Special Negotiating Committee
1. Where the registered office of the participating company, the concerned controlled company is situated in the Republic of Lithuania or the concerned establishment carries its business in the Republic of Lithuania, the member/members of the special negotiating committee shall be appointed from the Republic of Lithuania by the employees of accordingly that company or establishment or by their representatives. Where the registered office of several participating companies, 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/members of the special negotiating committee shall be appointed by common agreement of the employees of all those companies and/or establishments or their representatives.
2. In case the participating companies, concerned companies whose registered office is situated in the Republic of Lithuania or the employees’ representatives of the concerned establishment operating in the Republic of Lithuania fail to appoint member/members of the special negotiating committee within 30 days from the presentation of the information provided for in paragraph 2 of Article 9 of this Law, the member/members of the special negotiating committee shall be elected by secret voting at the general meeting of the entire body of employees. It may be convened by an employees’ representative. The same procedure shall also be applied where there are no employees’ representatives in the establishment or company, however, in such a case the obligation to convene the meeting of the entire body of employees shall rest with the management or administrative body of the company or the head of the establishment.
3. In case several participating companies, concerned controlled companies have their registered office in the Republic of Lithuania and/or one or several concerned establishments operate in the Republic of Lithuania and the representatives of the employees of the companies and/or establishments within 30 days from the presentation of the information provided for in paragraph 2 of Article 9 of this Law fail to agree among themselves on the appointment from the Republic of Lithuania of a member/members of the special negotiating committee or in case there are no employees’ representatives in any participating company whose registered office is situated in the Republic of Lithuania, concerned controlled company or controlled establishment which operates in the Republic of Lithuania, the member/members shall be elected by secret voting at the general conference of delegates of employees of companies and/or establishments. At the conference every ten employees shall be represented by one delegate. The conference shall be convened by, accordingly, the company’s management or administrative body or the management or administrative body of the establishment employing the largest number of employees calculated, according to the procedure established by this Law, by the management of administrative body or the head of the establishment.
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 companies and/or establishments.
5. The administrative or management bodies of the participating companies, concerned controlled companies as well as the heads of the concerned establishments must provide technical assistance in organising the general meeting of the entire body of employees or the general conference of the delegates of the employees of companies and/or establishments.
6. Members of the special negotiating committee shall be appointed or elected in representation of the employees of the participating companies whose registered office is situated in other Member States, concerned controlled companies or concerned establishments operating in them in accordance with the legislation of those Member States and/or the established practice.
7. The procedure laid down in this Law 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, 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 in cases specified in paragraph 3 of this Article and in 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 the relinquishment or a reduction of the existing participation rights, the majority required to approve such a decision of the special negotiating committee shall be the votes of two thirds of the members of the committee representing at least two-thirds of all the employees employed in at least two Member States:
1) in the case of an SE to be established by way of merger, if participation covers at least 25 % of the overall number of employees of the participating companies; or
2) in the case of an SE to be established by way of creating a holding SE or an SE to be established through subscription of shares, if participation covers at least 50 % of the overall number of employees of the participating companies.
4. Relinquishment or reduction of participation rights means that a proportion of members of the SE supervisory or administrative bodies who are elected, appointed, recommended or whose appointment is approved by the employees and/or employees’ representatives is lower than the existing proportion of members of the supervisory or administrative bodies elected, appointed, recommended by the employees and/or employees’ representatives or whose appointment is approved by the employees and/or employees’ representatives within any participating company.
 
Article 13. Meetings of the Special Negotiating Committee
1. The competent organ of the participating companies shall convene the first meeting of the special negotiating committee.
2. The special negotiating committee shall have the right to convene before the opening of negotiations with the competent organ of the participating companies 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 organ of the participating companies so agrees, the special negotiating committee may convene more frequently and (or) for a longer period.
3. The participating companies must provide premises and work equipment for meetings of the special negotiating committee, 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 presiding officer of the meeting and a person authorised by the special negotiating committee shall sign the minutes of the meeting.
 
Article 14. Expenses Relating to the Creation and Functioning of a Special Negotiating Committee
1. Any expenses relating to the creation of a special negotiating committee and participation of its members in meetings of the said body or negotiations with the competent organ of the participating companies shall be borne by the participating companies by their agreement. These expenses shall also include the health and life insurance, accommodation and travelling expenses of the member of the special negotiation body. The rate of such expenses and the procedure for covering them shall be laid down by the Government of the Republic of Lithuania.
2. If, within 30 days from the end of a meeting of the special negotiating committee, the health and life, accommodation and travelling expenses of 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 company, the concerned controlled company or concerned establishment with whom the member of the special negotiating committee is or has been related through industrial relations.
3. The provisions of paragraph 2 of this Article shall also apply in the cases an intended registered office of the SE will not be in the Republic of Lithuania, but a participating or concerned controlled company has a registered office in the Republic of Lithuania, or a concerned establishment operates in the Republic of Lithuania, with whom the member of the special negotiating committee, requesting the covering of the expenses is or has been related through industrial relations.
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 organ of the participating companies do not reach an agreement on a higher number of paid experts, the participating parties must cover the expenses related to one expert only.
5. In the absence of an agreement between the participating bodies regarding the covering of expenses relating to the creation of a special negotiating committee and the participation of the members of the special negotiating committee in its meetings or negotiations, the expenses, with the exception of those referred to in paragraph 2 of this Article, shall be covered jointly.
 
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 negotiations with the competent organ of the participating companies with regard to involvement of employees;
2) to terminate negotiations already opened with the competent organ of the participating companies.
2. A decision not to open negotiations with the competent organ of the participating companies or to terminate negotiations already opened may be taken by the votes of two thirds of the members of the special negotiating committee, representing at least two thirds of the employees, including the votes of members representing employees employed in at least two Member States. This provision shall not apply when a SE is established by transforming the company which already has the order of participation.
3. When a decision not to open negotiations with the competent organ of the participating companies or to terminate negotiations already opened has been taken, legal acts and (or) the established procedure of the Member States in which the employees of the SE are employed shall apply with regard to the involvement of employees.
4. The competent organ of the participating companies 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 as well, including trade unions.
5. When a decision not to open negotiations or to terminate them has been taken, negotiations shall be reopened on the written request to the central management of at least 10 % of the employees of the SE, the establishments of its controlled companies, or their representatives, at the earliest two years after the abovementioned decision, unless the parties agree to negotiations being reopened sooner. If the special negotiating committee decides to reopen negotiations with the competent organ of the participating companies but no agreement is reached as a result of those negotiations, none of the rules set out in Chapter IV of this Law shall apply.
 
Article 16. Commencement of Negotiations
1. The competent organ of the participating companies, having received a 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 organ of the participating companies.
2. The members of the special negotiating committee and the management or administrative bodies or the head of, respectively, the participating companies, concerned controlled companies and concerned establishments in which the members of the special negotiating committee are employed must be informed about the convocation of the first negotiation meeting not later than 14 days prior to such convocation.
3. A notification about a negotiation meeting must indicate the following:
1) the establishment or the company in which a member (members) of the special negotiating committee, invited to the negotiation meeting, is employed;
2) the name, surname and position of a member (members) of the special negotiating committee, who is invited to the negotiation meeting;
3) the date, time and venue of the negotiation meeting;
4) agenda of the negotiation meeting;
5) time limits and procedure for covering the health and life insurance, accommodation and travelling expenses of the member of the special negotiation body.
 
Article 17. Duration of Negotiations
1. Negotiations may continue for six months from the establishment of the special negotiating committee.
2. The special negotiating committee and the competent organ of the participating companies may decide, by joint agreement, to extend negotiations up to one year from the establishment of the special negotiating committee.
 
Article 18. Procedure of Negotiation Meetings
1. The competent organ of the participating companies and the special negotiating committee shall agree on the procedure of conduct of negotiation meetings, the venue and time of negotiation meetings, the time limits and 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 minutes of each meeting shall be signed by the presiding officer of the meeting, as well as a representative authorized by the other party to the negotiations.
3. The special negotiating committee may request experts of its choice.
 
Article 19. Result of Negotiations
1. Negotiations shall terminate when the special negotiating committee and the competent organ of the participating companies reach an agreement on arrangements for the involvement of the employees within the SE.
2. The agreement on arrangements for the involvement of the employees within the SE must specify:
1) the scope of the agreement;
2) the composition, number of members and allocation of seats on the SE works Council which will be the discussion partner of the central management in connection with arrangements for the information and consultation of the employees of the SE and its controlled companies and establishments, as well as the rules pursuant to which the rules on the change in the number of the members of a representative body and the seats thereof in different Member States may be modified, the changes in the structure of the SE and the number of employees in the Member States or its controlled companies, establishments or the establishments of the controlled companies;
3) the functions and the procedure for the information and consultation of the SE works Council;
4) the frequency, venue and duration of meetings of the SE works Council;
5) the financial and material resources allocated, and the services provided to the SE works Council;
6) if, during negotiations, it is decided to establish another information and consultation procedure instead of a SE works Council, the detailed agreements for the implementation of such procedure;
7) if, during negotiations, it is decided on participation, the detailed agreements for the implementation of the procedure for participation, including the number of members in the SE's administrative or supervisory body which the employees will be entitled to elect, appoint, recommend or accept their appointment, the procedures which the employees may apply when electing, appointing, recommending or accepting 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, cases where the parties should renegotiate the agreement and the procedure for such renegotiation.
3. In the case of an SE established by means of transformation, the rules on employee involvement, provided for in the agreement, must not be less favourable than the ones existing within the company to be transformed into an SE.
4. 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 organ of the participating companies reach an agreement that the involvement of employees in the SE will be implemented in pursuance of the provisions of Chapter IV of this Law.
5. The agreement between the special negotiating committee and the competent organ of the participating companies must be documented in writing and signed by at least two persons authorised by the competent organ of the participating companies and two members authorised by the special negotiating committee.
 
CHAPTER IV
STANDARD RULES
 
Article 20. Preconditions of Application of Standard Rules
1. The standard rules laid down in this Chapter shall apply when:
1) the special negotiating committee and the competent organ of the participating companies reach an agreement as a result of the negotiations that the involvement of employees will be carried out in compliance with the provisions of this Chapter or
2) by the deadline laid down in Article 17, no agreement has been concluded with regard to the involvement of employees and the competent organ of each of the participating companies decides  to apply the standard rules laid down in this Chapter. In this case the special negotiating committee does not take the decision, provided in paragraph 1 of Article 15, not to open negotiations or to terminate negotiations already opened and the competent organ of each of the participating companies decides to apply the standard rules laid down in this Chapter.
2. The rules as laid down by this Chapter shall apply to the SE whose registered office is situated in the Republic of Lithuania from the date of the establishment of the SE.
 
Article 21. Composition and Establishment of a SE Works Council
1. The provisions as laid down in paragraph 2 of Article 10 of this Law shall apply, mutatis mutandis, to the composition of a SE works Council.
2. Upon the establishment of a SE, the central management must, not later than within 30 days, inform in writing employees’ representatives in the companies or establishments, and, in their absence, inform employees at meetings of the entire body of the employees and (or) by other means of informing, customary in companies or establishments, about:
1) a total number of employees in the SE, the number of employees in each company controlled by it as well as in each establishment of the SE, and a total number of employees in each Member State;
2) the number of seats on the SE works Council, calculated in the manner prescribed by Article 31 of this Law, which are allocated in respect of the members appointed (elected) by the employees of each company and establishment, as well as allocation of the seats according to different Member States.
3. If the registered office of a SE or its controlled company is situated in the Republic of Lithuania, or an establishment of the SE or its controlled company operates in the Republic of Lithuania, a member (members) of the SE works Council from the Republic of Lithuania shall be respectively appointed (elected) by the representatives of that company or its establishment. If several controlled companies have the registered office in the Republic of Lithuania and (or) one or several establishments operate, a member (members) of the SE works Council shall be appointed by common agreement of representatives of all employees of those companies and (or) establishments.
4. If representatives of the employees of a SE which has the registered office in the Republic of Lithuania, its controlled company or an establishment of a SE or its controlled company operating in the Republic of Lithuania have not appoint a member (members) of the SE works Council within 30 days from the submitting of the information referred to in paragraph 2 of this Article, such member (members) 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 apply in the absence of employees’ representatives in that company or establishment. In this case a meeting of the entire body of employees must be convened by the head of the management or administrative body of the company or the head of the establishment.
5. If several companies, their controlled companies have the registered office in the Republic of Lithuania and (or) one or several concerned establishments operate therein, and representatives of employees of these companies and (or) establishments have not appointed a member (members) of the SE works Council from the Republic of Lithuania within 30 days from the submitting of the information referred to in paragraph 2 of this Article or in the absence of employees’ representatives in at least one SE having the registered office in the Republic of Lithuania or in at least one company controlled by it, which has the registered office in the Republic of Lithuania, or in at least one establishment of the SE or at least of establishment of its controlled company operating in the Republic of Lithuania, such a member (members) shall be elected by secret ballot at a general conference of delegates of the employees of the companies and (or) their establishments. At the conference one delegate shall represent every ten employees of a company or its establishment. The conference must be convened respectively by the head of the management or administrative 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 mutatis mutandis apply to a general meeting of the entire body of employees and a general conference of delegates of the employees of the companies and (or) their establishments.
7. Any other level of management must provide technical assistance for the organisation of a general meeting of the entire body of employees and a general conference of delegates of the employees of the companies and (or) their establishments.
8. The procedure laid down in this Article shall also apply when replacing members of the SE works Council.
9. Members of the SE works Council representing employees of controlled companies having the registered office in other Member States or the establishments of the SE operating in those States, or the establishments of its controlled companies shall be appointed (elected) in compliance with legal acts and (or) a practice of those Members States.
10. Where the registered office of a SE is situated in another Member State, the provisions of paragraphs 3-10 of this Article shall apply, mutatis mutandis, when appointing (electing) employees’ representatives to the SE works Council.
11. If due to the changes in the structure and the number of employees of a SE in the Member States or its controlled companies, establishments or the establishments of the controlled companies it is necessary to increase the number of the members of the SE works Council, the SE works Council shall, having regard to the opinion of the central management, decide on additional appointment (election) of a member of the SE works council. Having taken such decision, the SE works council shall apply to the central management with a request to initiate a procedure for appointing (electing) a new member (members) of the SE works council in pursuance of the provisions of this Law.
 
Article 22. Commencement and Expiry of Membership in the SE Works Council
1. An employee shall become a member of the SE works council from the date of his appointment or election.
2. Membership in the SE works council shall expire:
1) upon the death of the member;
2) upon termination of industrial relations;
3) upon resignation of the member;
4) upon the expiry of the term of office of the SE 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 SE works council, a new member must be appointed or elected in the manner prescribed 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 SE works council.
 
Article 23. Information about the Composition of the SE Works Council
1. After the appointment of a member (members) of the SE works Council, an employees’ representative(-s) shall communicate in writing to the central management the name, surname of the member of the SE works Council, the name of the establishment or company in which he is employed, his position and the address for contact. The same duty to inform the central management about an elected member (members) of the SE works Council shall fall on the head of the establishment or the management organ of the company who convened a general meeting of the entire body of employees or a general conference of delegates of the employees of the establishments of the company or (and) the companies.
2. When informing about the appointment of a member of the SE works Council, an extract of the minutes of a meeting of the competent organ of the employees’ representative or an extract of a general meeting of the employees’ representatives shall be presented, and when informing about the election, copies of the minutes and the list of the participants of a meeting or a conference shall be presented.
3. Upon the receipt of the documents referred to in paragraph 2 of this Article, the central management shall inform in writing the management organs of all participating companies and concerned controlled establishments operating in the Member States or the heads of the concerned establishments about the composition of the SE works Council. The information must include the names, surnames of the members of the SE works Council, the names of the establishment or company in which they are employed, as well as their position and the addresses for contact.
4. Upon the receipt of the information referred to in paragraph 3 of this Article, the central management and the management organs as well as the heads of the establishments shall forthwith communicate the information to the employees’ representatives functioning in the company or the establishment.
 
Article 24. Term of Office of the SE Works Council
The term of office of the SE works Council shall be four years. The term of office shall commence on the date when the SE works Council convenes for its first meeting. Members of the SE works Council and the management or administrative bodies or the heads of, respectively, participating companies, concerned controlled companies and concerned establishments in which the members of SE works Council are employed shall be informed about the first meeting of the SE works Council not later than 14 days prior to the convocation.
 
Article 25. Organization of the Activities of the SE Works Council
1. At its first meeting the SE works Council shall, by the majority of votes of all members, elect chairman of the SE works Council and his deputy, approve the rules of procedure of the SE works Council.
2. The chairman of the SE works Council (and when he is capable to carry out these duties – the deputy chairman) shall:
1) preside over meetings of the SE works Council;
2) in the manner prescribed by the rules of procedure of the SE works Council, represent the SE works Council in its relations with the central management;
3) organize storage and arrangement of the documents of the SE works Council;
4) carry out other functions assigned to him by the decision of the SE works Council, as well as set out in the rules of procedure of the SE works Council.
3. If the SE works Council consists of more than six members, the SE works Council shall elect a selective committee of the SE works Council from among its members, comprising three members. It shall be responsible for the fulfilment of the functions of the SE works Council during the period between the meetings of the SE works Council. Where appropriate, the members of the selective committee of the SE works Council must be from different Member States. The chairman of the SE works Council shall be ex officio the chairman of the committee of the SE works Council.
4. The SE works Council or the selective committee of the SE works Council shall take its decisions by the majority of votes of all its members. Each member shall have one vote.
 
Article 26. Meetings of the SE Works Council and the Selective committee of the SE Works Council
1. The first meeting as well as regular meetings of the SE works Council shall be convened by the central management. The first meeting must be convened by the central management within 90 days.
2. A regular meeting of the SE works Council shall be held each year before the convocation of a joint meeting with the central management. Consideration of a  report specified in paragraph 1 of Article 29 of this Law shall be scheduled in the agenda of a joint meeting.
3. In the cases set out in Article 30 of this Law the selective committee of the SE works Council (in the absence of such selective committee – the SE works Council) shall also have the right to convene extraordinary meetings. After coordination with the central management of the venue and date of a meeting, the chairman of the SE works Council shall apply to the central management with a written request to convene such meeting. The central management shall, not later than 14 days before a meeting, inform about the venue and date of a forthcoming meeting the members of the SE works Council or the selective committee of the SE works Council, as well as the management or administrative body or the head of the administration of, respectively, the company or its establishment in which a member of the SE works Council or the selective committee of the SE works Council.
4. A meeting of the SE works Council or the selective committee of the SE works Council may not continue longer than one day. If the central management so agrees, the SE works Council or the selective committee of the SE works Council may convene more frequently and (or) for a longer period.
5. The central management must provide premises and work equipment for meetings of the organ of the SE works Council or the selective committee of the SE works Council, ensure interpretation and adequate organisation of meetings.
6. Meetings of the SE works Council or the selective committee of the SE works Council shall be private, unless otherwise decided.
7. Minutes shall be taken of the meetings of the SE works Council or the selective committee of the SE works Council. The presiding officer of the meeting and a person authorised by the Council or the selective committee shall sign the minutes of the meeting.
 
Article 27. Participation of Experts
The SE works Council or the selective committee of the SE works Council may be assisted by experts of its choice.
 
Article 28. Costs Related to the Establishment and Activities of the SE Works Council
1. The costs related to the establishment of the SE works Council and the participation of the members of the SE works Council in meetings of the SE works Council or the selective committee of the SE works Council, as well as joint meetings with the central management or in the meetings referred to in Article 30 of this Law with any other level of management shall be borne by the SE. These costs shall also include health and life insurance, accommodation and travelling expenses of members of the SE works Council. The rate of these expenses and the procedure of compensation shall be laid down by the Government of the Republic of Lithuania.
2. If a SE fails to cover the health and life, accommodation and travelling expenses of a member of the SE works Council, such expenses must, within 30 days from a separate written demand, be covered by the SE controlled company, the SE establishment or the establishment of its controlled company with whom the member of the SE works Council requesting the cover of expenses is or has been related through industrial relations.
3. The provisions of paragraph 2 of this Article shall also apply in the cases when the SE registered office is situated outside the Republic of Lithuania, but the SE controlled company has a registered office in the Republic of Lithuania or the SE establishment or the establishment of its controlled company, with whom the member of the SE works Council requesting the cover of expenses is or has been related through industrial relations, operates in the Republic of Lithuania.
4. If the SE works Council or the selective committee of he SE works Council invites one or several experts, as provided for in Article 27 of this Law, and if the SE works Council and the central management do not reach an agreement on a higher number of paid experts, the SE must cover the expenses related to one expert only.
5. In so far as this is necessary for the fulfilment of their tasks, the members of the SE works Council shall be entitled to time off for training. Wages in the amount of not less than an average wage shall be paid for the training period.
 
Article 29. Regular information and consultation
1. Following the end of a calendar year, the central management must within three months draw up and present to the SE works Council an annual report on the economic standing and prospects of a SE, its establishments, as well as its controlled companies and their establishments.
2. An annual report must comprise at least the following information regarding a SE, its controlled companies:
1) the structure;
2) economic and financial situation;
3) the probable development of the business, including the changes and prospects of a trade, production, service scale;
4) the number of employees calculated in the manner prescribed by this Law; as well as an analysis of causes of the changes in this number;
5) the situation and probable trend of employment;
6) investment programmes which are being carried out or planned to be carried out;
7) substantial changes concerning organisation;
8) introduction of new working methods or production processes;
9) intended transfers of a company, production or business, or the parts thereof;
10) ceasing to exist, transformation, purchase or sale of companies, as well as closure of establishments of the companies or setting-up of new establishments;
11) collective redundancies and the measures to be applied to appease the consequences of such redundancies.
3. An annual report shall be discussed at a joint meeting of the SE works Council and the central management. A meeting must be held not earlier than 30 days after the submitting of the report to the SE works Council. Minutes must be taken of a joint meeting of the SE works Council and the central management. The minutes of a meeting shall be signed by the persons authorised by the SE works Council and the central management. When necessary, prior to each joint meeting the members of the SE works Council or the selective committee of the SE works Council shall be entitle to meet with the representatives of the central management.
4. Copies of all documents submitted to the general meeting of the SE shareholders, the agenda for meetings of the administrative and the management bodies must be submitted together with an annual report to a joint meeting of the SE works Council and the central management.
5. The central management must within 30 days forward an annual report together with the minutes of the joint meeting of the SE works Council and the central management to any other level of management.
 
Article 30. Information and Consultation under Exceptional Circumstances
1. The selective committee of the SE works Council or, in its absence, the SE works Council must be immediately notified in writing about the occurrence of exceptional circumstances. Circumstances shall be considered exceptional if they affect to a considerable extent the interests of the employees of a SE, its establishment, a SE controlled company or its establishment, particularly in the event of relocation of a company, production or business, or the part thereof, the closure of an establishment or a company, collective redundancies. Notifying must be carried out by the central management or any other level of management having its own powers of decision with regard to exceptional circumstances.
2. After the receipt of the notification referred to in paragraph 1 of this Article, the SE works Council or the selective committee of the SE works Council may apply to the central management or any other level of management, requesting to immediately convene a joint meeting of the selective committee of the SE works Council (the SE works Council) and the central management or any other level of management. During such a meeting consultations must be held on measures for defending employees’ interests or appeasing social and economic circumstances for employees.
3. If the selective committee of the SE 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 SE works Council who have been appointed or elected by the employees or their representatives of the SE or its establishment, the SE controlled companies or their establishments which are directly concerned by the circumstances in question.
4. The selective committee of the SE 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 selective committee of the SE works Council all members of the SE works Council, and the latter – the representatives of the employees of the SE or its establishment, the SE controlled companies or its establishments which are directly concerned by the said circumstances, and in their absence – inform at employees’ meetings. The same rule shall apply when the SE works Council participates in information and consultation procedures.
5. If the central management of any other level of management decides not to act in accordance with the opinion expressed by the selective committee of the SE works Council or the SE works Council, the selective committee of the SE works Council or the SE works Council shall have the right to a further meeting with the central management or any other level of management.
 
Article 31. Participation
1. The rules which were observed when regulating employee participation in the administrative or supervisory body before the transformation of the company into a SE, shall apply even in the case when after the transformation of such company a SE is established. The provisions of this Article shall apply mutatis mutandis to these rules.
2. When an SE is established in the manner other than that referred to in paragraph 1 of this Article, employees or employees’ representatives of such SE, its controlled companies or their establishments shall have the right to elect, appoint or recommend a number of members of the administrative or supervisory body of the SE equal to the highest proportion in force in the participating companies concerned before establishment of the SE. This provision shall also apply in the case when the appointment of members to the administrative or supervisory body of the SE is opposed.
3. The SE works Council shall decide on the allocation of seats within the administrative or supervisory body of the SE among the appropriate Member States or on the way in which the SE's employees may recommend or oppose the appointment of the members of these bodies. If the employees of one or more Member States are not covered by the proportional criterion, chosen by the SE works Council, the SE works Council must, seeking a balanced allocation of seats, give priority to the employees of that Member State in which the SE's registered office is registered.
4. The provisions of subparagraphs 3-10 of Article 21 of this Law shall apply mutatis mutandis when representatives of the employees of the SE working in the Republic of Lithuania, its controlled companies having a registered office in the Republic of Lithuania, or the establishments of the SE or the establishments of its controlled company operating in the Republic of Lithuania, are appointed or elected to the administrative or supervisory bodies of the SE. Employees or representatives of the employees of the SE’s controlled companies, having a registered office in any other Member State, and their establishments, as well as employees or representatives of the employees of the SE’s establishments operating in any other Member State shall be elected, appointed, recommended to the administrative or supervisory bodies of the SE, or their appointment shall be accepted in accordance with the legal acts and (or) the established procedure of those Member States.
5. Every member of the administrative body or the supervisory body of the SE who has been elected, appointed or recommended in the manner prescribed by this Law shall be a full member with the same rights and obligations as the members elected by a general meeting of the shareholders, including the right to vote.
6. The provisions of this Article shall apply in the case of an SE established by merger:
1) if, before the establishing of the SE, one or more forms of employees’ participation applied in one or more of the participating companies covering at least 25 % of the overall number of employees in all the participating companies, or
2) if, before registration of the SE, one or more forms of participation applied in one or more of the participating companies covering less than 25 % of the total number of employees in all the participating companies and if the special negotiating committee so decides.
7. The provisions of this Article shall apply in the case of an SE established by setting up a holding company or a controlled company:
1) if, before the establishing of the SE, one or more forms of participation applied in one or more of the participating companies covering at least 50 % of the total number of employees in all the participating companies; or
2) if, before the establishing of the SE, one or more forms of participation applied in one or more of the participating companies covering less than 50 % of the total number of employees in all the participating companies and if the special negotiating committee so decides.
8. The provisions of this Article may not apply in a SE, if, before the establishing of the SE, none of the forms of participation applied in any participating company.
9. If, before the establishing of a SE, there was more than one form of participation applied in participating company, the special negotiating committee shall decide which of those forms will be established in the SE.
10. The special negotiating committee must immediately inform the competent organs of the participating companies of the decisions referred to in paragraphs 6, 7 and 9 of this Article.
 
Article 32. Information of Employees’ Representatives
1. The SE works Council, the selective committee of SE works Council must, at least once a year, inform the representatives of the employees, and in their absence – the employees, of the SE and of its establishment, of the SE’s controlled companies and of their establishments of their activities and the outcome of the information and consultation procedures.
2. The SE works Council may obligate its member to submit the information, referred to in paragraph 1 of this Article, to representatives of the employees of certain establishment of the company or of the controlled company, or directly to the employees in the Member State.
 
Article 33. Conclusion of the Activities of the SE Works Council
1. The SE works Council shall carry out its functions until the expiry of the term of office, except for the exceptions set out in this Article.
2. Not later than 6 months before the expiry of the term of office of the SE works Council, the SE works Council may, by the majority of votes of its members, decide to open negotiations with the central management. An agreement, provided for in Article 19 of this Law, may be reached during the negotiations. In this event the SE works Council shall acquire all 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 SE works Council specified in paragraph 2 of this Article, open negotiations or no agreement has been concluded within one year from receipt of such notification, the rules of this Chapter shall continue to apply and a new SE works Council must be established pursuant to the procedure laid down by this Chapter.
 
CHAPTER V
FINAL PROVISIONS
 
Article 34. Liability for Violations of this 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 Republic of Lithuania.
 
 
 
 
 
PRESIDENT OF THE REPUBLIC                                                 VALDAS ADAMKUS
 
 
Annex to Republic of Lithuania Law No X-200 of 12 May 2005
 
 
EU LEGAL ACT IMPLEMENTED BY THE LAW ON
THE INVOLVEMENT OF EMPLOYEES IN A EUROPEAN COMPANY (SE)
 
Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees.