EMPLOYEE INVOLVEMENT (EUROPEAN CO-OPERATIVE SOCIETY) REGULATIONS

SUBSIDIARY LEGISLATION 452.98

EMPLOYEE INVOLVEMENT (EUROPEAN

CO-OPERATIVE SOCIETY) REGULATIONS

9th March, 2007

LEGAL NOTICE 48 of 2007, as amended by Legal Notice 427 of 2007.

(1) The title of these regulations is the Employee

Involvement (European Co-operative Society) Regulations.

(2) These regulations establish the arrangements for the

involvement of employees in the affairs of European Co-operative

Societies (hereinafter referred to as SCEs), as referred to in

Regulation (EC) No 1435/2003, thereby giving effect to the

relevant provisions of Council Directive 2003/72/EC of the 22nd

July 2003 supplementing the Statute for a European Cooperative

Society with regard to the involvement of employees.

(Regulations 11 and 12)

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 11, a representative body shall be set up in accordance with

the following rules.

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

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 SCE and its subsidiaries or establishments, by allocating in

respect of a Member State one seat per each portion of employees

employed in that Member State which equals 10%, or a fraction thereof,

of the number of employees employed by them in all the Member States

taken together.

(f)

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

of the representative body.

(g) Not later than four years after its establishment, the representative body

shall examine whether to open negotiations for the conclusion of the

agreement referred to in regulations 9 and 11 or to continue to apply the

standard rules adopted in accordance with this Schedule.

2. Regulations 7 to 10 shall apply, mutatis mutandis, if a decision has been

taken to negotiate an agreement according to regulation 9, 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 to apply.

Part 2: Standard Rules for Information and Consultation

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

shall be governed by the following rules

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

which concern the SCE 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 SCE at

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

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

prospects. The local management or administrative organs shall be

informed accordingly.

The competent organ of the SCE 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 members. The meeting shall relate in particular to the structure,

economic and financial situation, the probable development of the business and of

production and sales, initiatives with regard to corporate social responsibility, the

situation and probable trend of employment, investments, and substantial changes

concerning organization, the 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 SCE or any more

appropriate level of management within the SCE having its own powers

of decision, so as to be informed or 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 SCE with a view to seeking agreement.

In the case of a meeting organized 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

(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 SCE, 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 14, the members of the representative

body shall inform the representatives of the employees of the SCE 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 fulfillment 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 SCE, which

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

EMPLOYEE INVOLVEMENT

(EUROPEAN CO-OPERATIVE SOCIETY)

resources needed to enable them to perform their duties in an

appropriate manner.

In particular, the SCE shall, unless otherwise agreed, bear the cost of organizing

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 SCE 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 SCE shall be governed by the following

provisions

(a) In the case of an SCE 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 SCE. Paragraph (b) shall

apply mutatis mutandis to that end.

(b) In other cases where an SCE is established, the employees of the SCE,

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 SCE equal to the highest proportion in force in the participating

legal entities concerned before registration of the SCE.

If none of the participating legal entities was governed by participation rules

before registration of the SCE, 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 SCE’s employees may

recommend or oppose the appointment of the members of these bodies according to

the proportion of the SCE’s employees in each Member State. If the employees of

one or more of the 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 SCE’s registered office where that is appropriate.

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

body of the SCE 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

members of the cooperative, including the right to vote.

(1)

For the purpose of these regulations

"the Act" means the Employment and Industrial Relations Act;

"concerned subsidiary or establishment" means a subsidiary or

establishment of a participating legal entity which is proposed to

become a subsidiary or establishment of the SCE 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 SCE, 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 SCE;

"information" means the informing of the body representative of

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

competent organ of the SCE on questions which concern the SCE

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

SCE;

"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 an undertaking;

"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;

"participating legal entities" means companies and firms within

the meaning of the second paragraph of Article 48 of the Treaty

establishing the European Community, including cooperatives, as

well as legal bodies formed under Maltese law directly

participating in the establishment of an SCE;

"participation" means the influence of the body representative of

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

affairs of a legal entity by way of -

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

the legal entity’s supervisory or administrative organ,

or

(b) the right to recommend or oppose, or both, the

appointment of some or all of the members of the legal

entity’s supervisory or administrative organ;

"representative body" means the body representative of the

employees set up by the agreements referred to in regulation 9 or in

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

informing and consulting the employees of an SCE and its

subsidiaries and establishments situated in the Community and,

where applicable, of exercising participation rights in relation to

the SCE;

"SCE" means any cooperative society established in accordance

with Council Regulation (EC) No 1435/2003 of the 22nd July 2003;

"special negotiating body" means the body established in

accordance with regulation 4 to negotiate with the competent organ

of the participating legal entities regarding the establishment of

arrangements for the involvement of employees within the SCE;

"subsidiary" of a participating legal entity or of an SCE means an

undertaking over which that legal entity or SCE exercises a

dominant influence defined in accordance with regulation 2(4) to

(9) of 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 1435/2003 or in Council Directive

2003/72/EC shall have the same meaning as they have in the EC

Regulation or Council Directive.

Regulations 4 to 11 are applicable to SCEs established by

at least two legal entities or by transformation.

(1) When the management or administrative organs of

participating legal entities draw up a plan for the establishment of

an SCE in Malta, they shall as soon as possible take the necessary

measures to start negotiations with the representatives of the legal

entities’ employees on arrangements for the involvement of

employees in the SCE.

(2) The competent organs of the participating legal entities

shall make arrangem ents for the establishment of a special

n e g o t i a t i n g 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

participating legal entities and concerned subsidiaries or

establishments, which shall be constituted in accordance with

regulation 5.

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

the participating legal entities 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 or

administrative organs of the participating legal entities are obliged

to take shall include the provision of all the relevant information

about the identity of the participating legal entities, concerned

subsidiaries or establishments and the number of their employees

as well as any matters related thereto, to the employees’

representatives of the participating legal entity, 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 employment is

their principal employment as defined by the Part-Time Employees

Regulations.

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

accordance with the following criteria

(a) the employees of the participating legal entities 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 in all

the Member States taken together;

(b) if, in the case of an SCE 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 cooperative

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 SCE, the

employees of that cooperative 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 cooperatives is higher than

the number of additional seats, such additional

seats shall be allocated by decreasing order to

cooperatives in different Member States having

the highest number of employees.

(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 legal entities,

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 or administrative organs of the

participating legal entities 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 5(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 legal entities which have

employees in Malta, there shall be separate

ballots for the Maltese employees in each

participating legal entity;

(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 legal entities which have

employees in Malta, there shall be separate

ballots for the Maltese employees in each

participating legal entity and the management or

administrative organs shall ensure, as far as

practicable, that at least one member

representing each such participating legal entity

is elected to the special negotiating body and

that the number of members representing each

legal entity is proportionate to the number of

employees in that legal entity;

(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 legal entities which have

employees in Malta, a single ballot shall be held

in which all the employees of the participating

legal entities shall be entitled to vote;

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

regulation 5(1)(b), the management or administrative

organs shall hold a separate ballot in respect of each

participating legal entity entitled to elect an additional

member;

(c) in a ballot in respect of a participating legal entity, a

Maltese employee employed in that participating legal

entity 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 legal entity, any

person who on the date of nomination of candidates

was -

(i)

a Maltese employee employed in that

participating legal entity or in its concerned

subsidiaries and establishments who satisfied

the criteria laid down in regulation 4(5) and who

is in employment but not in his probationary

period on the date of nomination; or

(ii) a representative of a trade union, even if he is

not an employee of that participating legal entity

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

so long as the management or administrative organs of

that participating legal entity so permit;

(e) the management or administrative organs shall

(i)

appoint an independent ballot supervisor to

supervise the conduct of the ballot of Maltese

EMPLOYEE INVOLVEMENT

(EUROPEAN CO-OPERATIVE SOCIETY)

employees;

in the case where there is to be more than one ballot,

the management or administrative organs may appoint

more than one independent ballot supervisor each of

whom shall supervise such of the separate ballots as

the management or administrative organs 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 or administrative organs;

(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 or administrative organs have

formulated proposals as to the arrangements for the

ballot of Maltese employees and before they have

published the final arrangements under paragraph (g)

they shall, as far as reasonably practicable, consult

with the employees’ representatives on the proposed

arrangements for the ballot of Maltese employees; and

(g) the management or administrative organs 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 subregulation (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 or administrative organs of the

participating legal entity, 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

or administrative organs 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 subregulation (4)(a) provided that if the

ballot supervisor also issues a report in accordance with

subregulation (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 legal entities

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 em ployees and those of their concern ed

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 or administrative organs 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

organization of such a ballot, to the Director responsible for

industrial and employment relations, who shall investigate whether

s u c h a c o m pl a i nt i s w e l l - f o u nd e d a n d w h o m a y d i r e c t t h a t

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 organization of the

ballot shall be final.

(8) Notwithstanding any requirement in these regulations to

hold a ballot, where the number of candidates at the end of the

period allocated for nominations 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 legal entities, 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 legal entities operating in

Malta.

(1) Each member of the special negotiating body shall

have one vote.

(2) Subject to subregulation (3) and to regulation 8, 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 if -

(i)

in the case of an SCE to be established by a

merger, at least 25% of the employees employed

in the Member States by the participating

cooperatives which are due to merge have

participation rights; or

(ii) in the case of an SCE to be established by any

other way, at least 50% of the total number of

employees employed in the Member States by

the participating legal entities 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 SCE than the highest proportion

already existing within any of the participating legal entities 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 8 in such a

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 legal entity or entities 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 legal entities 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 SCE 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 SCE to be

established by transformation if any employees of the cooperative

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 legal entities, concerned

subsidiaries and establishments, or

(ii) where the SCE has been registered, the SCE, 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 7(5) unless the special

negotiating body and the competent organs of the

participating legal entities, concerned subsidiaries and

establishments or, where the SCE has been registered,

the SCE agrees to the special negotiating body being

reconvened earlier

Provided that if the special negotiating body decides to

reopen negotiations with the management or administrative organs

but no agreement is reached as a result of those negotiations, none

of the provisions of the Schedule shall apply.

(1) The competent organs of the participating legal entities

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 a 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 the six month

period referred to in paragraph (a) that it is to be

extended, for a period of twelve months starting from

the day on which the duty commenced or, where an

employee involvement agreement is successfully

negotiated within this twelve month period, until the

completion of the negotiations.

(3) The competent organs of the participating legal entity or

entities shall provide the special negotiating body with such

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

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

registered.

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

of the participating legal entities and the special negotiating body,

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

subregulation (1) between the competent organs of the participating

legal entities 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 SCE

in connection with arrangements for the information

and consultation of the employees of the SCE 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 SCE’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 and the procedure for its renegotiation,

including, where appropriate, the duty to renegotiate

on changes in worker involvement in the event of

structural changes in the SCE and its subsidiaries and

establishments which occur after the creation of the

SCE.

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

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

Schedule to these regulations.

(6) In the case of an SCE 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 cooperative to be transformed into an SCE.

(7) The agreement may specify the arrangements for the

entitlement of employees to participate in the general meetings or

in the section or sectorial meetings in accordance with regulation

13 and any other arrangement emanating from Article 59(4) of

Regulation (EC) No 1435/2003 on the Statute of the European Co-

operative Society.

Except where otherwise provided in these regulations, the

legislation applicable to the negotiation procedure provided for in

regulations 4 to 9 shall be the legislation of the Member State in

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

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

regulation applies, the competent organ of the SCE and its

subsidiaries and establishments shall make arrangements for the

involvement of employees of the SCE and its subsidiaries and

establishments in accordance with the standard rules on employee

involvement set out in the Schedule to these regulations when

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

(b) the period specified in regulation 9(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

legal entities decide to accept that the standard

rules shall apply and so continue with the

registration of the SCE, and

(ii) the special negotiating body has not taken any

decision under regulation 8(1) either not to open

or to terminate the negotiations referred to in

that regulation

Provided that the standard rules shall apply from

the date of registration of the SCE.

(2) The standard rules on participation as set out in Part 3 of

the Schedule only apply

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

the rules of a Member State relating to employee

participation in the administrative or supervisory body

applied to a cooperative transformed into an SCE;

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

registration of the SCE, one or more forms of

participation existed in at least one of the participating

cooperatives and

(i)

either that participation applied to at least 25%

of the total number of employees of the

participating cooperatives employed in the

Member States, or

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

total number of employees of the participating

cooperatives employed in the Member States and

the special negotiating body decides that the

standard rules of participation will apply to the

employees of the SCE;

(c) in the case of an SCE established by any other way if,

before registration of the SCE, one or more forms of

participation existed in at least one of the participating

legal entities and

(i)

either that participation applied to at least 50%

of the total number of employees of the

participating legal entities employed in the

Member States; or

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

total number of employees of the participating

legal entities employed in the Member States

and the special negotiating body decides that the

standard rules of participation will apply to the

employees of the SCE.

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

more than one form of participation existed in the participating

legal entity, the special negotiating body shall decide which of the

existing forms of participation shall exist in the SCE and shall

inform the competent organs of the participating legal entities

accordingly.

(1) This regulation is applicable to SCEs established

exclusively by natural persons or by a single legal entity and

natural persons.

(2) The provisions of regulations 4 to 11 apply in the case of an

SCE established exclusively by natural persons or by a single legal

entity and natural persons, which together employ at least fifty

employees in at least two Member States.

(3) In the case of an SCE established exclusively by natural

persons or by a single legal entity and natural persons, which

together employ fewer than fifty employees, or employ fifty or

more employees in only one Member State -

(i)

employee involvement in the SCE itself shall be

governed by the law, applicable to other entities

of the same type, of the Member State where the

SCE has its registered office;

(ii) employee involvement in its subsidiaries and

establishments shall be governed by the law,

applicable to other entities of the same type, of

the Member State where they are situated.

(4) In the case of transfer of the registered office of an SCE

governed by participation from one Member State to another, at

least the same level of employee participation rights shall continue

to apply.

(5) If, after the registration of an SCE referred to in

su bregu latio n (3), at least one third of th e tot al nu mber of

employees of the SCE and its subsidiaries and establishments in at

least two different Member States so requests, or if the total

number of employees reaches or exceeds fifty employees in at least

two Member States, regulations 4 to 11 shall mutatis mutandis

apply. In this case, the terms ‘participating legal entities’ and

‘concerned subsidiaries or establishments’ shall be replaced by the

words ‘SCE’ and ‘subsidiaries or establishments of the SCE’

respectively.

(1) Subject to the limits laid down in Article 59(4) of

Regulation (EC) No 1435/2003, the employees of the SCE or their

representatives or both are entitled to participate in the general

meeting or, if it exists, in the section or sectorial meeting, with the

right to vote

(a) when the parties so decide in the agreement referred to

in regulation 9, or

(b) when a cooperative governed by such a system

transforms itself into an SCE, or

(c) when, in the case of an SCE established by means

other than transformation, a participating cooperative

was governed by such a system, and

(i)

the parties cannot reach agreement, as referred

to in regulation 9, by the deadline laid down in

the same regulation; and

(ii) regulation 11(1)(b) and Part 3 of the Schedule

apply; and

(iii) the participating cooperative governed by such a

system has the highest proportion of

participation, within the meaning of regulation

2, in force in the participating cooperatives

concerned before registration of the SCE.

(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 SCE, a

participating legal entity or its concerned subsidiaries

or establishments has entrusted to him on terms

requiring 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 legal entity or the

SCE 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, the recipient whom

the competent organ of a participating legal entity or the SCE 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 SCE registered in Malta or a

participating legal entity, 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 SCE, participating legal entity or

any subsidiaries or establishments concerned.

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

participating legal entity, concerned subsidiary or establishment or

an SCE 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 functionin g of, or be

prejudicial to, the SCE, participating legal entity 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 r g 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 SCE 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 SCE 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 SCE who are employees

of the SCE, its subsidiaries or establishments or of a participating

legal entity 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 9(4)(f) or any meeting of the

administrative or supervisory organ, and to the payment of wages

for members employed by a participating legal entity or the SCE or

its subsidiaries or establishments during a period of absence

necessary for the performance of their duties.

No person shall use an SCE 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 or administrative organs of

establishments of an SCE and the supervisory or

administrative organs of subsidiaries and of

participating legal entities 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 SCE 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 SCE 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 8 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 legal entity

bodies provided for in any relevant collective agreement shall not

apply to the SCEs to which regulations 4 to 11 apply.

(4)

These regulations shall not prejudice

(a) the existing rights to involvement of employees

provided for by laws or applicable collective

agreements as enjoyed by employees of the SCE and

its subsidiaries and establishments, other than

participation in the bodies of the SCE;

(b) the provisions on participation in the bodies in any

relevant law or as agreed through any collective

agreement applicable to the subsidiaries of the SCE or

to SCEs to which regulations 4 to 11 do not apply.

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

legal entities, concerned subsidiaries or establishments

in relation to a failure by the competent organ of the

SCE, of the participating legal entity 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).

EMPLOYEE INVOLVEMENT

(EUROPEAN CO-OPERATIVE SOCIETY)