European Commercial Law Law Essay Research Coursework (Essay Sample)

European Commercial Law – Assignment
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European Commercial Law – Assignment
Question No. 1
What are the problems of the European Company (SE) Statute [Regulation 2157/2001]? What has not (yet) been achieved by the European Company (SE) Statute?
Answer
The European Company (SE) Statute is widely considered as a critical step in the development of the European Company law, especially with regard to corporate mobility. The Statute expressly provides the rules that govern the mergers between public companies from various Member States through the incorporation of an SE. Indeed, there are several advantages of incorporating as European Companies. However, an in-depth evaluation of different provisions of the SE reveals that there are instances where the incorporation of the European Companies is disadvantageous. The first problem of this regulatory framework relates to the aspect of negotiation with employees. It is worth noting that the SE has a flexible approach for highlighting the rights and the degree of employee participation in the process of incorporating a European Company. In particular, this scope is often determined by the means of negotiation between the company and the employees. It is argued that the aforementioned flexibility was primarily implemented so as to strike a balance between the Member States with strong and weak regulations on employee protection. It is further averred that this flexibility was considered a benefit for a business enterprise, for example, an SE. In practice, however, the highlighted flexibility is a major problem for businesses. The Member States that have weak protection European Companies are likely to choose the alternative of employee information and consultation rights. The rationale for this being the case is because, in practice, the information and consultation rights do not give employees significant influence on how the business enterprise is managed. From a critical and realistic point of view, it is only the participation rights that give employees the opportunity to play an active role in the management of a company. For instance, these rights allow the employees to appoint or elect representatives in the firm’s leadership organ.[Chepenko A, “European Company: to incorporate, or not to incorporate?” Queen Mary University of London, 34.] [Ibid., 35.]