July 18, the European Court of Justice (ECJ) followed the Advocate General`s motions to hold German laws on Employee Representation on Board Level do not violate EU law. See our detailed article of May 11, 2017, linked here. Thus, the exclusion of all employees of global group entities employed outside of Germany in participating in employee representatives elections is not discrimination based on nationality. The freedom of movement for workers does not grant employees’ rights outside Germany, which only exist within, and under the national laws of, Germany. Co-determination laws and rules regarding the Employee Representation on Board Level belong to German corporate and collective employment law and, therefore, may legitimately be restricted to employees employed in Germany.
Today`s decision of the ECJ is the right decision. It brings clarity and transparency to the boards of global entities. It also eliminates time-consuming and costly court procedures, not to mention the practical nightmare of implementing and executing new rules on group-wide participation, board election, and headcount had the ECJ ruled in a different way.
The courts in Berlin and Frankfurt now have to decide in their pending proceedings regarding TUI AG and Deutsche Börse AG.