EMPLOYEE INVOLVEMENT (EUROPEAN COMPANY) REGULATIONS

SUBSIDIARY LEGISLATION 452.94

EMPLOYEE INVOLVEMENT (EUROPEAN

COMPANY) REGULATIONS

22nd October, 2004

LEGAL NOTICE 452 of 2004, as amended by Legal Notice 427 of 2007.

(1) The title of these regulations is the Employee

Involvement (European Company) Regulations.

(2) These regulations establish the arrangements for the

involvement of employees in the affairs of European public limited

liability companies (known as Societas Europaea, hereinafter

referred to as "SE"), as referred to in Regulation (EC) No 2157/

2001, thereby giving effect to the relevant provisions of Council

Directive 2001/86/EC of the 8th October 2001 supplementing the

Statute for a European Company with regard to the involvement of

employees.

(Regulation 10)

Standard Rules

Part 1: Composition of the body representative of the employees

1. In order to achieve the objective described in regulation 1, and in the cases

referred to in regulation 10, a representative body shall be set up in accordance with

the following rules.

(a) The representative body shall be composed of employees of the SE and

its subsidiaries and establishments elected or appointed from their

number by the employees’ representatives or, in the absence thereof, by

the entire body of employees.

(b) The election or appointment of members of the representative body

shall be carried out by the special negotiating body, in accordance with

any method it adopts.

(c) Where its size so warrants, the representative body shall elect a select

committee from among its members, comprising at most three members.

(d) The representative body shall adopt its rules of procedure.

(e) The members of the representative body are elected or appointed in

proportion to the number of employees employed in each Member State

by the participating companies and concerned subsidiaries or

establishments, by allocating in respect of a Member State one seat per

portion of employees employed in that Member State which equals

10%, or a fraction thereof, of the number of employees employed by the

participating companies and concerned subsidiaries or establishments in

all the Member States taken together.

(f)

The competent organ of the SE shall be informed of the composition of

the representative body.

(g) Four years after the representative body is established, it shall examine

whether to open negotiations for the conclusion of the agreement

referred to in regulations 8 and 10 or to continue to apply the standard

rules adopted in accordance with this Schedule.

2. Regulations 6 to 9 shall apply, mutatis mutandis, if a decision has been taken

to negotiate an agreement according to regulation 8, in which case the term "special

negotiating body" shall be replaced by "representative body". Where, by the deadline

by which the negotiations come to an end, no agreement has been concluded, the

arrangements initially adopted in accordance with the standard rules shall continue

Part 2: Standard rules for information and consultation

3. The competence and powers of the representative body set up in an SE shall

be governed by the following rules

(a) The competence of the representative body shall be limited to questions

which concern the SE itself and any of its subsidiaries or establishments

situated in another Member State or which exceed the powers of the

decision-making organs in a single Member State.

(b) Without prejudice to meetings held pursuant to paragraph (c), the

representative body shall have the right to be informed and consulted

and, for that purpose, to meet with the competent organ of the SE at

EMPLOYEE INVOLVEMENT (EUROPEAN COMPANY)

least once a year, on the basis of regular reports drawn up by the

competent organ, on the progress of the business of the SE and its

prospects. The local managements shall be informed accordingly.

The competent organ of the SE shall provide the representative body

with the agenda for meetings of the administrative, or, where

appropriate, the management and supervisory organ, and with copies of

all documents submitted to the general meeting of its shareholders.The

meeting shall relate in particular to the structure, economic and

financial situation, the probable development of the business and of

production and sales, the situation and probable trend of employment,

investments, and substantial changes concerning organisation,

introduction of new working methods or production processes, transfers

of production, mergers, cut-backs or closures of undertakings,

establishments or important parts thereof, and collective redundancies.

(c) Where there are exceptional circumstances affecting the employees’

interests to a considerable extent, particularly in the event of

relocations, transfers, the closure of establishments or undertakings or

collective redundancies, the representative body shall have the right to

be informed. The representative body or, where it so decides, in

particular for reasons of urgency, the select committee, shall have the

right to meet at its request the competent organ of the SE or any more

appropriate level of management within the SE having its own powers

of decision, so as to be informed and consulted on measures

significantly affecting employees’ interests.

Where the competent organ decides not to act in accordance with the

opinion expressed by the representative body, this body shall have the

right to a further meeting with the competent organ of the SE with a

view to seeking agreement.

In the case of a meeting organised with the select committee, those

members of the representative body who represent employees who are

directly concerned by the measures in question shall also have the right

to participate.

The meetings referred to above shall not affect the prerogatives of the

competent organ.

(d) The parties present at the information and consultation meetings are to

agree as to how to conduct the procedure during the said meeting and in

case of disagreement then the parties should conduct the meeting

alternately and establish the procedure thereof.

Before any meeting with the competent organ of the SE, the

representative body or the select committee, where necessary enlarged

in accordance with the third subparagraph of paragraph (c), shall be

entitled to meet without the representatives of the competent organ

being present.

(e) Without prejudice to regulation 11, the members of the representative

body shall inform the representatives of the employees of the SE and of

its subsidiaries and establishments of the content and outcome of the

information and consultation procedures.

(f)

The representative body or the select committee may be assisted by

experts of its choice.

(g) In so far as this is necessary for the fulfilment of their tasks, the

members of the representative body shall be entitled to time off for

training without loss of wages.

(h) The costs of the representative body shall be borne by the SE, which

shall provide the body’s members with the financial and material

resources needed to enable them to perform their duties in an

appropriate manner.

In particular, the SE shall, unless otherwise agreed, bear the cost of

organising meetings and providing interpretation facilities and the

accommodation and travelling expenses of members of the

representative body and the select committee. However the obligation

of the SE to cover the expenses of any experts engaged by the special

negotiating body or the representative body is limited to those of one

expert only.

Part 3: Standard rules for participation

4. Employee participation in an SE shall be governed by the following

provisions

(a) In the case of an SE established by transformation, if the rules of a

Member State relating to employee participation in the administrative or

supervisory body applied before registration, all aspects of employee

participation shall continue to apply to the SE. Paragraph (b) shall apply

mutatis mutandis to that end.

(b) In other cases of the establishing of an SE, the employees of the SE, its

subsidiaries and establishments and]or their representative body shall

have the right to elect, appoint, recommend or oppose the appointment

of 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 registration of the SE.

If none of the participating companies was governed by participation

rules before registration of the SE, the latter shall not be required to

establish provisions for employee participation.

The representative body shall decide on the allocation of seats within

the administrative or supervisory body among the members representing

the employees from the various Member States or on the way in which

the SE’s employees may recommend or oppose the appointment of the

members of these bodies according to the proportion of the SE’s

employees in each Member State. If the employees of one or more

Member States are not covered by this proportional criterion, the

representative body shall appoint a member from one of those Member

States, in particular the Member State of the SE’s registered office

where that is appropriate.

Every member of the administrative body or, where appropriate, of the

supervisory body of the SE who has been elected, appointed or

recommended by the representative body or, depending on the

circumstances, by the employees, shall be a full member with the same

rights and obligations as the members representing the shareholders,

including the right to vote.

(1)

For the purpose of these regulations

"Act" means the Employment and Industrial Relations Act;

"concerned subsidiary or establishment" means a subsidiary or

establishment of a participating company which is proposed to

become a subsidiary or establishment of the SE upon its formation;

"consultation" means the establishment of dialogue and

exchange of views between the body representative of the

employees or the employees’ representatives, or both, and the

competent organ of the SE, 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 competent organ which may be taken into account

in the decision-making process within the SE;

"information" means the informing of the body representative of

the employees or employees’ representatives, or both, by the

competent organ of the SE on questions which concern the SE itself

and any of its subsidiaries or establishments situated in another

Member State or which exceed the powers of the decision-making

organs in a single Member State at a time, 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 consultations with the competent organ of the

SE;

"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;

"Maltese employee" means an employee employed by an

undertaking established in Malta;

"Maltese member of the special negotiating body" means a

member of the special negotiating body elected or appointed by

Maltese employees;

"Member States" means a member state of the European Union

or the European Economic Area;

" p a r t ic i pa t i ng c o m p a n i e s " m e a n s th e c o m p a n i e s d i r e c t l y

participating in the establishing of an SE;

"participation" means the influence of the body representative of

the employees or the employees’ representatives, or both, in the

affairs of a company by way of the right to

(a) elect or appoint some of the members of the

company’s supervisory or administrative organ, or

(b) recommend or oppose, or both, the appointment of

some or all of the members of the company’s

supervisory or administrative organ;

"representative body" means the persons elected or appointed

under the employee involvement agreement referred to in

regulation 8 or under the standard rules of employee involvement

in accordance with the provisions of the Schedule, with the purpose

of informing and consulting the employees of an SE and its

subsidiaries and establishments situated in the Community and,

where applicable, of exercising participation rights in relation to

the SE;

"SE" means any company established in accordance with Council

Regulation (EC) No 2157]2001 of the 8th October 2001 on the

Statute for a European Company (SE);

"special negotiating body" means the body established in

accordance with regulation 3 to negotiate with the competent body

of the participating companies regarding the establishment of

arrangements for the involvement of employees within the SE;

"subsidiary" of a company means an undertaking over which that

company exercises a dominant influence defined in accordance

wit h regulation 2(4) to (9) o f the European Works Council

Regulations.

(2) Subject to the provisions of subregulation (1), terms and

expressions used in these regulations shall, unless the context

otherwise requires, have the meaning assigned to them in the Act.

(3) In the absence of a definition given in these regulations,

words and expressions used in these regulations which are also

used in Regulation (EC) No 2157/2001 or in Council Directive

2001/86/EC have the same meaning as they have in the EC

Regulation or Council Directive.

(1) When the management of the participating companies

draw up a plan for the establishment of an SE whose registered

office shall be in Malta, they shall as soon as possible after -

(a) the date of publication of the draft terms of merger; or

(b) the creation of a holding company; or

(c) after agreement has been reached on a plan to form a

subsidiary or to transform into an SE,

take the necessary measures to start negotiations with the

representatives of the companies’ employees on arrangements for

the involvement of employees in the SE.

(2) The competent organs of the participating companies shall

make arrangements for the establishment of a special negotiating

b o d y, r e p r e s e n t a t i v e o f t h e e m p l o y e e s o f t h e p a r t i c i p a t i n g

companies and concerned subsidiaries and establishments, which

shall be constituted in accordance with regulation 4.

(3) The special negotiating body and the competent organs of

the participating companies shall have the task of reaching an

employee involvement agreement.

(4) In order to facilitate the negotiation procedures, the

measures referred to in subregulation (1) which the management of

the participating companies is obliged to take shall include the

provision of all the relevant information about the identity of the

participating companies, concerned subsidiaries or establishments,

the number of their employees and any matters related thereto, to

the employees’ representatives of the participating company, its

concerned subsidiaries and establishments, or if no such

representatives exist, to the employees themselves. Such measures

shall be taken within three weeks from the date referred to in

subregulation (1).

(5) For the purpose of these regulations, in order to calculate

the number of employees employed in subsidiaries and

establishments operating in Malta, account shall be taken of all

employees, whether such employees are on a definite or indefinite

contract, and including part-time employees whose part-time

employment is their principal employment in respect of which

social security contributions are payable under the Social Security

Act.

(1) The special negotiating body shall be set up in

accordance with the following criteria

(a) the employees of the participating companies and

concerned subsidiaries or establishments in each

Member State in which employees are employed shall

be entitled to elect or appoint one member of the

special negotiating body for each 10%, or a fraction

thereof, of the number of employees employed by the

participating companies and concerned subsidiaries or

establishments in all the Member States taken

together;

(b) if, in the case of an SE to be established by merger,

following the election or appointment referred to in

paragraph (a), the members elected or appointed to the

special negotiating body do not include at least one

member representing each participating company

which is registered and has employees in that Member

State and which will cease to exist as a separate legal

entity on or following the registration of the SE, the

employees of that company in respect of which there is

no member shall be entitled to elect or appoint an

additional member to the special negotiating body,

provided that

(i)

the number of additional members which the

employees are entitled to elect or appoint shall

not exceed 20% of the number of ordinary

members elected or appointed by virtue of

paragraph (a);

(ii) the composition of the special negotiating body

shall not entail a double representation of the

employees concerned; and

(iii) if the number of such companies is higher than

the number of additional seats, such additional

seats shall be allocated to participating

companies in different Member States having the

highest number of employees by decreasing

order.

(2) If, following the appointment or election of members to the

special negotiating body in accordance with this regulation -

(a) changes are made to the participating companies,

concerned subsidiaries or establishments which result

in the number of ordinary or additional members

which employees would be entitled to elect or appoint

under this regulation either increasing or decreasing,

the original appointment or election of members of the

special negotiating body shall cease to have effect and

those employees shall be entitled to elect or appoint

the new number of members in accordance with the

provisions of these regulations; and

(b) a member of the special negotiating body is no longer

willing or able to continue serving as such a member,

the employees whom he represents shall be entitled to

elect or appoint a new member in his place.

(1) The method of selection of the Maltese members of the

special negotiating body shall be by means of a ballot from

amongst eligible persons who satisfy the criteria laid down in

subregulation (2)(d).

(2) The management of the participating companies to which

these regulations apply shall be responsible for arrangements

relating to the holding of the ballot of members to serve on the

special negotiating body according to the following criteria

(a) in relation to the election of ordinary members under

regulation 4(1)(a) -

(i)

if the number of members which Maltese

employees are entitled to elect to the special

negotiating body is equal to the number of

participating companies which have employees

in Malta, there shall be separate ballots for the

Maltese employees in each participating

company;

(ii) if the number of members which the Maltese

employees are entitled to elect to the special

negotiating body is greater than the number of

participating companies which have employees

in Malta, there shall be separate ballots for the

Maltese employees in each participating

company and the management shall ensure, as

far as practicable, that at least one member

representing each such participating company is

elected to the special negotiating body and that

the number of members representing each

company is proportionate to the number of

employees in that company;

(iii) if the number of members which the Maltese

employees are entitled to elect to the special

negotiating body is smaller than the number of

participating companies which have employees

in Malta, a single ballot shall be held in which

all the employees of the participating companies

shall be entitled to vote;

(b) in relation to the ballot of additional members under

regulation 4(1)(b), the management shall hold a

separate ballot in respect of each participating

company entitled to elect an additional member;

(c) in a ballot in respect of a participating company, a

Maltese employee employed in that participating

company or in its concerned subsidiaries and

establishments on the date or dates of the election shall

be entitled to vote;

(d) in a ballot in respect of a participating company, any

person who on the date of nomination of candidates

was -

(i)

a Maltese employee employed in that

participating company or in its concerned

subsidiaries and establishments who satisfied

the criteria laid down in regulation 3(5) and who

is in employment but not in their probationary

period on the date of nomination; or

(ii) if the management of that participating company

so permits, a representative of a trade union who

is not an employee of that participating company

or its concerned subsidiaries or establishments,

is entitled to stand as a candidate for election as

a member of the special negotiating body in that

ballot;

(e) the management shall -

(i)

appoint an independent ballot supervisor to

supervise the conduct of the ballot of Maltese

employees: in the case where there is to be more

EMPLOYEE INVOLVEMENT (EUROPEAN COMPANY)

than one ballot, the management may appoint

more than one independent ballot supervisor

each of whom shall supervise such of the

separate ballots as the management may

determine, provided that each separate ballot is

supervised by a supervisor;

(ii) ensure that there is no interference with the

carrying out of his functions from the

management;

(iii) comply with all reasonable requests made by a

ballot supervisor for the purposes of, or in

connection with, the carrying out of those

functions;

(f)

after the management has formulated proposals as to

the arrangements for the ballot of Maltese employees

and before it has published the final arrangements

under paragraph (g) it shall, so far as reasonably

practicable,

consult

with

the

employees’

representatives on the proposed arrangements for the

ballot of Maltese employees; and

(g) the management must publish the final arrangements

for the ballot of Maltese employees in such manner as

to bring them to the attention of, so far as reasonably

practicable, the Maltese employees and of the

employees’ representatives.

(3)

The ballot supervisor shall establish the date -

(a) for nomination of candidates, which shall be on a date

within the second and third week from the date when

the final arrangements for the ballot of Maltese

employees referred to in regulation (2)(g) were

finalized, and

(b) of the ballot itself which shall be held within two

months from the date of nomination of candidates

referred to in paragraph (a).

(4)

It shall be the duty of the ballot supervisor -

(a) to formally publish, as the case may be, the names of

the persons standing for election, and the results of the

ballot held to appoint the special negotiating body, in

such a manner as to make them available to the

management of the participating company, to the

Maltese employees entitled to vote in the ballot and

the persons who stood as candidates, as soon as

practicable, and in any case within one week after the

date of nomination of candidates or the election or

appointment of the members of the special negotiating

body;

(b) if the circumstances so warrant, to publish a report

concurrently with the results of the election of the

special negotiating body referred to in paragraph (a)

stating -

(i)

that any of the requirements for holding a fair

election were not met with the result that the

outcome of the ballot could have been different;

or

(ii) that there was an interference with the carrying

out of his functions or a failure by management

to comply with all reasonable requests made by

him with the result that he was unable to form a

proper judgement as to whether the requirements

for holding a fair election were met.

(5) The special negotiating body shall be considered to have

been established on the date of publication of the results of the

ballot in accordance with regulation 4(4)(a) provided that if the

ballot supervisor also issues a report in accordance with regulation

4(4)(b), the process of election or appointment of the special

negotiating body shall be considered null and without effect and

would have to be carried out anew.

(6) The competent organs of the participating companies shall,

as soon as reasonably practicable and in any event by no later than

one month after the establishment of the special negotiating body,

inform their employees and those of their concerned subsidiaries

and establishments of the identity of the members of the special

negotiating body.

(7) Any Maltese employee or Maltese employees’

representative may within a period of one week beginning on the

date on which the management published the final arrangements in

terms of subregulation (2)(g), make a written complaint in relation

to any aspect relating to the election of the representatives to the

special negotiating body including the eligibility to stand for

election, eligibility to vote or the organisation of such a ballot, to

the Director responsible for industrial and employment relations,

who shall investigate whether such a complaint is well-founded and

who may direct that appropriate measures be taken by any person

involved to eliminate any grounds for well-founded complaints,

and any decision taken by the Director on any matter relating to the

organisation of the ballot shall be final.

(8) Notwithstanding any requirement in these regulations to

hold a ballot, where the number of candidates on the day of

nomination equals the number of members to be elected to the

special negotiating body, these shall be considered to have been

automatically appointed to the special negotiating body, and this

will obviate any requirement to hold a ballot and the ballot

supervisor shall publish this result in accordance with

subregulation (4).

(9) Any costs relating to the whole process of nominations and

election in one or more companies, including payments made to a

ballot supervisor for supervising the conduct of the ballot, (whether

or not a report in accordance with subregulation (4)(b) has been

made), shall be borne by the participating companies operating in

Malta.

(1) Each member of the special negotiating body shall

have one vote.

(2) Subject to subregulation (3) and to regulation 7, the special

negotiating body shall take decisions by an absolute majority of its

members, provided that such a majority also represents an absolute

majority of the employees.

(3) Any decision which would result in a reduction of

participation rights must be taken by two-thirds of the members of

the special negotiating body, representing at least two-thirds of the

employees and including the votes of members representing

employees in at least two Member States, when

(a) an SE is to be established by a merger and at least 25%

of the employees employed in the Member States by

the participating companies which are due to merge

have participation rights; or

(b) an SE is to be established by formation of a holding

company or of a subsidiary company and at least 50%

of the total number of employees employed in the

Member States by the participating companies have

participation rights.

(4) For the purposes of subregulation (3), reduction of

participation rights means that the body representative of the

employees has a smaller proportion of members of the supervisory

or administrative organs of the SE than the highest proportion

already existing within any of the participating companies which

gave participation rights to its employees.

(5) The special negotiating body shall publish the details of any

decision taken under this regulation or under regulation 7 in such

manner as to bring the decision to the attention, so far as

reasonably practicable, of the employees whom they represent and

such publication shall take place as soon as reasonably practicable

and, in any event no later than fourteen days, after the decision has

been taken.

(6) For the purposes of negotiations, the special negotiating

body may be assisted by experts of its choice.

(7) The participating company or companies shall pay for any

reasonable expenses of the functioning of the special negotiating

body and any reasonable expenses relating to the negotiations that

are necessary to enable the special negotiating body to carry out its

functions in an appropriate manner; and this shall include the

expenses of one expert where the special negotiating body is

assisted by experts of its own choice.

(1) Subject to subregulations (2) and (3), the special

negotiating body may decide not to open negotiations with the

competent organs of the participating companies or to terminate

any negotiations already opened, and to rely on the rules of

information and consultation in force in the Member states where

the SE has employees.

(2)

The majority required to decide not to open or to terminate

negotiations shall be the votes of two thirds of the members

representing at least two thirds of the employees, including the

votes of members representing employees employed in at least two

Member States.

(3) The special negotiating body cannot take the decision

referred to in subregulation (1) in relation to an SE to be

established by transformation if any employees of the company to

be transformed have participation rights.

(4) The special negotiating body shall be reconvened only if

the employees or employees’ representatives make a valid request,

which request shall be

(a) in writing;

(b) made by at least 10% of the employees of, or by

employees’ representatives representing at least 10%

of the employees of -

(i)

the

participating

companies,

concerned

subsidiaries and establishments, or

(ii) where the SE has been registered, the SE, its

subsidiaries and establishments; and

(c) at the earliest, two years after the decision made under

subregulation (1) was or should have been published in

accordance with regulation 6(5) unless the special

negotiating body and the competent organs of the

participating companies, concerned subsidiaries and

establishments or, where the SE has been registered,

the SE agrees to the special negotiating body being

reconvened earlier.

(1) The competent organs of the participating companies

and the special negotiating body are under a duty to negotiate in a

s p i r i t o f c oo p e r a t i o n wi t h a v i e w t o r e a c hi n g a n e m p lo y e e

involvement agreement.

(2) The duty referred to in subregulation (1) commences one

month after the date on which all the members of the special

negotiating body were elected or appointed and applies -

(a) for the period of six months starting with the day on

which the duty commenced or, where an employee

involvement agreement is successfully negotiated

within that period, until the completion of the

negotiations;

(b) where the parties agree before the end of that six

month period that it is to be extended, for the period of

twelve months starting with the day on which the duty

commenced or, where an employee involvement

agreement is successfully negotiated within the twelve

month period, until the completion of the negotiations.

(3) The competent organs of the participating company or

companies shall provide the special negotiating body with such

information as is necessary to keep it informed of the plan and

progress of establishing the SE up to the time the SE has been

registered.

(4) Without prejudice to the autonomy of the competent organs

of the participating companies and the special negotiating body,

and subject to subregulation (6), the agreement referred to in

subregulation (1) between the competent organs of the participating

companies and the special negotiating body, shall specify

(a) the scope of the agreement;

(b) the composition, number of members and allocation of

seats on the representative body which will be the

discussion partner of the competent organ of the SE in

connection with arrangements for the information and

consultation of the employees of the SE and its

subsidiaries and establishments;

(c) the functions and the procedure for the information

and consultation of the representative body;

(d) the frequency of meetings of the representative body;

(e) the financial and material resources to be allocated to

the representative body;

(f)

if, during negotiations, the parties decide to establish

one or more information and consultation procedures

instead of a representative body, the arrangements for

implementing those procedures;

(g) if, during negotiations, the parties decide to establish

arrangements for participation, the substance of those

arrangements including, if applicable, the number of

members in the SE’s administrative or supervisory

body which the employees will be entitled to elect,

appoint, recommend or oppose, the procedures as to

how these members may be elected, appointed,

recommended or opposed by the employees, and their

rights;

(h) the date of entry into force of the agreement and its

duration, cases where the agreement should be

renegotiated, including the duty to renegotiate on

changes in worker involvement whenever a substantial

change in the structure of the SE is foreseen, and the

procedure for its renegotiation.

(5) The agreement shall not, unless provision is made

otherwise therein, be subject to the standard rules referred to in the

Schedule.

(6) In the case of an SE established by means of

transformation, the agreement shall provide for at least the same

level of all elements of employee involvement as the ones existing

within the company to be transformed into an SE.

Except where otherwise provided in these regulations, the

legislation applicable to the negotiation procedure provided for in

regulations 3 to 8 shall be the legislation of the Member State in

which the registered office of the SE is to be situated.

(1) Without prejudice to subregulation (2), where this

r e g u l a t i o n a p p l i e s , t h e c o m p e t e n t o rg a n o f t h e S E a n d i t s

subsidiaries and establishments shall make arrangements for the

involvement of employees of the SE and its subsidiaries and

establishments in accordance with the standard rules on employee

involvement set out in the Schedule when

(a) the parties agree that the standard rules shall apply; or

(b) the period specified in regulation 8(2)(a) or, where

applicable, paragraph (b) has expired without the

parties reaching an employee involvement agreement

and -

(i)

the competent organs of each of the participating

companies agree that the standard rules shall

apply and so continue with the registration of

the SE; and

(ii) the special negotiating body has not taken any

decision under regulation 7(1) either not to open

or to terminate the negotiations referred to in

that regulation.

(2) The standard rules set out in the Schedule (standard rules

on participation) only apply -

(a) in the case of an SE established by transformation, if

the rules of a Member State relating to employee

participation in the administrative or supervisory body

applied to a company transformed into an SE;

(b) in the case of an SE established by merger if, before

registration of the SE, one or more forms of

participation existed in at least one of the participating

companies and -

(i)

either that participation applied to at least 25%

of the total number of employees of the

participating companies employed in the

Member States,

(ii) or that participation applied to less than 25% of

the total number of employees of the

participating companies employed in the

Member States but the special negotiating body

has decided that the standard rules of

participation will apply to the employees of the

SE;

(c) in the case of an SE established by formation of a

holding company or subsidiary company if, before

registration of the SE, one or more forms of

participation existed in at least one of the participating

companies and -

(i)

either that participation applied to at least 50%

of the total number of employees of the

participating companies employed in the

Member States;

(ii) or that participation applied to less than 50% of

the total number of employees of the

participating companies employed in the

Member States but the special negotiating body

has decided that the standard rules of

participation will apply to the employees of the

SE.

(3) Where the standard rules on participation apply and, if

more than one form of participation existed in the participating

company, the special negotiating body shall decide which of the

existing forms of participation shall exist in the SE and shall

inform the competent organs of the participating companies

accordingly.

(1) A person who is or at any time was -

(a) a member of a special negotiating body;

(b) a member of a representative body;

(c) an employee member

on

a

supervisory

or

administrative organ; or

(d) an expert assisting a special negotiating body or a

representative body,

shall not disclose any information or document which is or has

been in his possession by virtue of his position as described in

paragraphs (a) to (d), which the competent organ of an SE, a

participating company or its concerned subsidiaries or

establishments has entrusted to him on termsrequiring it to be held

in confidence.

(2) In this regulation a person specified in subregulation (1)(a)

to (d) shall be referred to as a "recipient".

(3) The obligation to comply with subregulation (1) is a duty

owed to the competent organ of a participating company or the SE

and a breach of such duty is actionable in damages accordingly.

(4) Where a dispute arises as to the confidentiality of

information or a document given to a recipient under subregulation

(1)(a), (b) and (c), the recipient whom the competent organ of a

participating company or the SE has entrusted with such

information or document on terms requiring it to be held in

confidence, may refer the dispute to the Industrial Tribunal for a

decision as to whether it was reasonable for the competent organ to

require the recipient to hold the information or document in

confidence.

(5) If the Industrial Tribunal considers that the disclosure of the

information or the document by the recipient would not, or would

not be likely to, prejudice or cause serious harm to the undertaking,

it shall make a declaration that it was not reasonable for the

competent organ to require the recipient to hold the information or

document in confidence.

(6) If a declaration is made under subregulation (5), the

information or document shall not at any time thereafter be

regarded as having been entrusted to the recipient who made the

application under subregulation (4), or to any other recipient, on

terms requiring it to be held in confidence.

(7) The competent organ of an SE registered in Malta or a

participating company, or a concerned subsidiary registered in

Malta is not required to disclose any information or document to a

recipient when the nature of the information or document is such

that, according to objective criteria, the disclosure of the

information or document would seriously harm the functioning of,

or would be prejudicial to, the SE, participating company or any

subsidiaries or establishments concerned.

(8) Where there is a dispute between the competent organ of a

participating company, concerned subsidiary or establishment or an

SE and a recipient as to whether the nature of the information or

document which the competent organ has failed to provide is such

as is described in subregulation (7), the competent organ or a

recipient may refer the dispute to the Industrial Tribunal for a

decision as to whether the information or document is of such a

nature.

(9) If the Industrial Tribunal decides that the disclosure of the

information or document in question would not, according to

objective criteria, seriously harm the functioning of, or be

prejudicial to, the SE, participating company or any subsidiary or

establishment concerned, as the case may be, the Industrial

Tr i b u n a l s h a l l o r d e r t h e c o m p e t e n t o rg a n t o d i s c l o s e t h e

information or document, and the order shall specify

(a) the information or document to be disclosed;

(b) the recipient or recipients to whom the information or

document is to be disclosed;

(c) any terms on which the information or document is to

be disclosed; and

(d) the date before which the information or document is

to be disclosed.

The competent organ of the SE and the representative body

shall work together in a spirit of cooperation with due regard for

their reciprocal rights and obligations, and this shall also apply to

the cooperation between the supervisory or administrative organ of

the SE and the employees’ representatives in conjunction with a

procedure for the information and consultation of employees.

(1) The members of the special negotiating body, the

m e m b e r s o f t h e r e p r e s e n t a t i v e b o d y, a n y e m p l o y e e s ’

representatives exercising functions under the information and

consultation procedure and any employees’ representatives in the

supervisory or administrative organ of an SE who are employees of

the SE, its subsidiaries or establishments or of a participating

company shall, in the exercise of their functions, enjoy the same

protection and guarantees provided for employees’ representatives

in the Act.

(2) The protection and guarantees referred to in subregulation

(1) shall apply in particular to attendance at meetings of the special

negotiating body or representative body, any other meeting under

the agreement referred to in regulation 8(4)(f) or any meeting of the

administrative or supervisory organ, and to the payment of wages

for members employed by a participating company or the SE or its

subsidiaries or establishments during a period of absence necessary

for the performance of their duties.

No person shall use an SE for the purpose of depriving

employees of rights to employee involvement or withholding any

such rights.

It shall be the duty of -

(a) the management of establishments of an SE and the

supervisory or administrative organs of subsidiaries

and of participating companies which are situated in

Malta, and

(b) the employees’ representatives or, as the case may be,

the employees themselves,

to abide by the obligations laid down by these regulations,

regardless of whether or not the SE has its registered office in

Malta.

(1) Notwithstanding any provision to the contrary in the

European Works Council Regulations, and subject to subregulation

(2), where an SE is a Community-scale undertaking or a controlling

undertaking of a Community-scale group of undertakings within

the meaning of those regulations, the provisions of European Works

Council Regulations shall not apply to them or to their subsidiaries.

(2) Where the special negotiating body decides in accordance

with regulation 6 not to open negotiations or to terminate

negotiations already opened, the provisions of the European Works

Council Regulations shall apply.

(3) Provisions on the participation of employees in company

bodies provided for in any relevant collective agreement shall not

apply to companies established in accordance with Regulation (EC)

No 2157/2001 and covered by these regulations.

(4)

These regulations shall not prejudice

(a) the existing rights to involvement of employees

provided for by existing collective agreements as

enjoyed by employees of the SE and its subsidiaries

and establishments, other than participation in the

bodies of the SE;

(b) the provisions on participation in the bodies agreed

through a relevant collective agreement applicable to

the subsidiaries of the SE.

Any person who fails to comply with any obligation

imposed on such person under these regulations shall be guilty of

an offence and shall, on conviction, be liable

(a) to a fine (multa) of not less than twenty-three euro and

twenty-nine cents (23.29) and not more than one

hundred and sixteen euro and forty-seven cents

(116.47) for every employee of all the participating

companies, concerned subsidiaries or establishments

EMPLOYEE INVOLVEMENT (EUROPEAN COMPANY)

in relation to a failure by the competent organ of the

SE, of the participating company or concerned

subsidiary as the case may be, to comply with any

requirements provided for in these regulations;

(b) in relation to any other offence, a fine (multa) of not

less than one thousand and one hundred and sixty- four

euro and sixty-nine cents (1,164.69) and not more than

eleven thousand and six hundred and forty-six euro

and eighty-seven cents (11,646.87).