Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
17 October 2019 [shall come
into force on 19 November 2019];
11 May 2023 [shall come into force on 1 June 2023].
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
|
The Saeima1 has adopted and
the President has proclaimed the following law:
On the
Involvement of Employees in Decision-Making in a European
Company, a European Cooperative Society and in the Case of
Cross-Border Reorganisation of Capital Companies
[11 May 2023]
Chapter I
General Provisions
Section 1. Terms Used in the Law
The following terms are used in the Law:
1) involvement of employees - the way through which
employees or representatives thereof may exercise an influence on
decisions to be taken within a European company, a European
cooperative society or, in the case of cross-border
reorganisation of capital companies, in an acquiring company,
including information, consultation, and participation
(representation);
2) information - the informing of the representative
committee of employees or the employees' representatives on
questions which concern the relevant European company, European
cooperative society or, in the case of cross-border
reorganisation of capital companies, an acquiring company and any
of its subsidiary or branch at a time, in a manner, and with a
content which allows the representative committee or the
employees' representatives to undertake an in-depth assessment of
the possible impact and, where appropriate, prepare consultations
with the executive body (the administrative body) of the
company;
3) consultation - a dialogue and exchange of views
between the representative committee of employees or the
employees' representatives and the executive body (the
administrative body) of the European company, the European
cooperative society or, in the case of cross-border
reorganisation of capital companies, of the acquiring company at
a time, in a manner, and with a content which allows the
representative committee of employees or the employees'
representatives, on the basis of the information received, to
express their opinion on the measures envisaged by the executive
body (the administrative body) which may be taken into account in
the decision-making process of the company;
4) participation (representation) - the influence of
the representative committee of employees or the employees'
representatives on the processes in the European company, the
European cooperative society or, in the case of cross-border
reorganisation of capital companies, in the acquiring company.
Such influence is implemented by exercising the right to elect or
appoint the members of the executive body (the administrative
body) or supervisory body of the company or the right to
recommend the candidates for the members of such institutions or
to oppose their election or appointment;
5) employees' representatives - the trade union of the
employees on behalf of which an institution or official of the
trade union authorised in its articles of association is acting,
or representatives authorised by the employees which are elected
in accordance with the Labour Law;
6) Member State - a European Union Member State, the
Republic of Iceland, the Kingdom of Norway or the Principality of
Liechtenstein.
[11 May 2023]
Section 2. Purpose of the Law
The purpose of the Law is to prescribe the procedures by which
employees shall be involved in the decision-making in a European
company, a European cooperative society and, in the case of
cross-border reorganisation of capital companies, in an acquiring
company (hereinafter also - the acquiring company).
[11 May 2023]
Section 3. Scope of Application of
the Law
(1) The Law shall apply if:
1) it is intended to register a European company or European
cooperative company in Latvia;
2) a legal address of a European company or European
cooperative company is transferred to Latvia;
3) in the case of cross-border reorganisation of capital
companies - the acquiring company is or will be registered in
Latvia and the rules regarding employee participation are in
force in at least one of the capital companies involved in the
cross-border reorganisation.
(2) The provisions of this Law regarding creation of the
special negotiating body shall be applied if:
1) a commercial company or cooperative society registered in
Latvia (hereinafter - the participating company) participates in
the foundation of a European company or a European cooperative
society;
2) a capital company registered in Latvia (hereinafter - the
company to be reorganised) participates in the process of
cross-border reorganisation of capital companies.
(3) If a European cooperative society is established
exclusively by natural persons or by a single legal entity and
natural persons, this Law shall be applied only in such case when
the founders of the relevant European cooperative society
together employ at least 50 employees in at least two Member
States.
(4) If a European cooperative society is established
exclusively by natural persons or by a single legal entity and
natural persons which together employ less than 50 employees, or
employ 50 employees in only one Member State, this Law shall be
applied in the case when:
1) it is requested by at least one third of the employees of
the European cooperative society and the subsidiaries thereof in
at least two Member States;
2) after the registration of the European cooperative society
it employs at least 50 employees in at least two Member
States.
[11 May 2023]
Chapter
II
Conducting Negotiations and Special Negotiating Body
Section 4. Duty of Conducting
Negotiations
(1) When developing a draft contract of establishment, also
draft regulations of reorganisation or transformation of the
European company or European cooperative society (hereinafter -
the draft contract of establishment) or, in the case of
cross-border reorganisation of capital companies, a draft
contract of reorganisation, the participating companies or
companies to be reorganised shall conduct negotiations with the
employees or representatives thereof regarding the further
involvement of employees in the decision-making. Negotiations
shall be commenced immediately after the notification of a draft
contract of establishment or a draft contract of
reorganisation.
(2) During the course of negotiations the participating
companies or companies to be reorganised shall inform the
employees or representatives thereof regarding the provisions of
a draft contract of establishment or a draft contract of
reorganisation and the course of implementation thereof regarding
all the participating companies or companies to be reorganised
and the number of the employees of such companies, and also
regarding measures to be taken in relation to the involvement of
employees in the decision-making.
[11 May 2023]
Section 5. Creation of the Special
Negotiating Body
(1) For conducting negotiations, the special negotiating body
representing the employees of the participating companies or
companies to be reorganised and subsidiaries thereof shall be
created. The special negotiating body may include the
representatives of trade unions irrespective of whether they are
the employees of the participating companies or companies to be
reorganised.
(2) The number of the members of the special negotiating body
shall be determined in proportion to the number of employees of
the participating companies or companies to be reorganised and
the subsidiaries thereof in each Member State.
(3) Employees employed in a Member State in which the
participating company or the company to be reorganised has been
registered and which form 10 % (or a smaller part of the
employees if there are less than full 10 %) of the total number
of the employees employed in all Member States shall be
represented in the special negotiating body by one employees'
representative.
(4) The number of employees shall be calculated from the
average number of employees within a period of six months prior
to the notification of the draft contract of establishment or a
draft contract of reorganisation. When calculating the number of
employees, also those employees with whom a contract of
employment for a specified period is concluded shall be taken
into account.
(5) If the number of the employees of participating companies
or companies to be reorganised changes and this affects the
composition of the special negotiating body, the composition of
this body shall change accordingly.
(6) The special negotiating body shall be regarded as created
when all its members are elected.
(7) The special negotiating body shall inform the
participating companies or companies to be reorganised regarding
its composition.
Section 6. Additional
Representatives
(1) If a European company or European cooperative society is
established by way of a merger, additional representatives from
each Member State shall be included in the special negotiating
body so that there is at least one representative of each
participating company or company to be reorganised in such a
negotiating group. Additional representatives shall not be
included in the special negotiating group if by their inclusion
the relevant employees would be represented twice.
(2) The number of additional representatives shall not exceed
20 % of the number of members of the special negotiating body
that has been elected pursuant to Section 5, Paragraph two of
this Law.
(3) If the number of the participating companies or companies
to be reorganised is higher than the number of additional seats
available in the special negotiating body, these additional seats
shall be allocated to the employees' representatives of the
participating companies or companies to be reorganised registered
in different Member States, starting with the employees'
representatives of those participating companies or companies to
be reorganised in which a greater number of employees is
employed.
(4) The provisions of this Section shall also be applied in
the case of cross-border merger and division of capital
companies.
[11 May 2023]
Section 7. Election of the Members
of the Special Negotiating Body in Latvia
(1) The interests of the employees of the participating
company or company to be reorganised in the special negotiating
body shall be represented by the already existing employees'
representatives, unless otherwise decided by the employees.
(2) If there are no employees' representatives in the
participating company or the company to be reorganised or
employees have taken a decision to elect other representatives
thereof in the special negotiating body, employees shall,
pursuant to the procedures specified in the Labour Law, elect
representatives which will represent their interests in the
special negotiating body. A member of the special negotiating
body shall be elected also if the number of the employees of the
participating company or the company to be reorganised is smaller
than the number necessary for the election of the employees'
representatives.
(3) If the employees of participating companies or companies
to be reorganised are represented both by a trade union of the
employees and the authorised employees' representatives, such
employees shall authorise their representatives to select the
members of the special negotiating body in proportion to the
number of the employees represented but not less than one member
of the special negotiating body for each participating company or
company to be reorganised.
(4) At least one employees' representative from each
participating company or company to be reorganised registered in
Latvia shall be included in the special negotiating body. The
number of members of the special negotiating body nominated from
Latvia shall not exceed the number of the representatives
determined for Latvia in accordance with Section 5 of this Law
and the number of additional representatives determined for
Latvia in accordance with Section 6 of this Law.
(5) If the number of participating companies or companies to
be reorganised registered in Latvia exceeds the number of the
representatives determined for Latvia for the inclusion in the
special negotiating body, all the representatives of the
participating companies or companies to be reorganised shall
agree regarding a joint representative of the employees in the
special negotiating body. If such agreement is not reached, the
employees employed in Latvia shall be represented by the
representative of the participating company or company to be
reorganised having the greater number of employees.
Section 8. Decision-Making in the
Special Negotiating Body
(1) The special negotiating body shall take decisions by a
simple majority which conforms to the majority of all the
employees of participating companies or companies to be
reorganised, unless the greater number of votes is provided for
in this Law.
(2) Each member of the special negotiating body shall have one
vote in the decision-making.
Section 9. Decision Regarding
Reduction of Participation Rights
(1) The provisions of this Section shall be applied:
1) if a European company or European cooperative society is
established by way of merger and if participation rights have
been provided for at least 25 % of the overall number of the
employees of the participating companies;
2) if a European company or European cooperative society is
established as a holding company or as a subsidiary and if
participation rights have been provided for at least 50 % of the
overall number of the employees of the participating
companies;
3) in the case of cross-border merger and division of capital
companies.
(2) Participation rights shall be reduced if the participation
of employees in a European company, European cooperative society
or acquiring company is smaller than the participation in one of
the participating companies or companies to be reorganised.
(3) The special negotiating body may take a decision regarding
the reduction of participation rights if voted by at least two
thirds of the members of the special negotiating body who
represent at least two thirds of the employees from at least two
Member States where the participating companies or companies to
be reorganised are registered.
[11 May 2023]
Section 10. Invitation of
Experts
The special negotiating body has the right to invite experts.
Experts shall participate in the meetings of the special
negotiating body and participating companies or companies to be
reorganised in an advisory capacity.
Section 11. Duration of
Negotiations
(1) Negotiations shall be opened immediately after the special
negotiating body is established and shall continue for a period
not exceeding six months.
(2) The special negotiating body and participating companies
or companies to be reorganised upon mutual agreement may extend
the time period referred to in Paragraph one of this Section up
to one year from the day of establishment of the special
negotiating body.
Section 12. Decision Regarding the
Application of Provisions of a Member State in a European Company
or European Cooperative Society
(1) If at least two thirds of the members of the special
negotiating body who represent at least two thirds of employees
from at least two Member States, in which participating companies
have been registered, vote for application of provisions of a
Member State in a European company or European cooperative
society, the special negotiating body may decide not to open the
negotiations referred to in Section 4, Paragraph one of this Law
or to terminate the negotiations already opened and decide that
the provisions of the laws and regulations governing information
and consultation which are in force in the relevant Member States
in which the European company or European cooperative society
employ the employees shall be applied in the European company or
European cooperative society.
(2) Taking of the decision referred to in Paragraph one of
this Section shall suspend any measures which are directed to
entering into the agreement referred to in Section 15 of this
Law. In such case the standard rules for the involvement of
employees specified in Chapter IV of this Law shall not be
applied.
(3) The provisions of Paragraph one of this Section shall not
be applied if a European company or European cooperative society
is established by way of transformation and the rules relating to
employee participation are in force in the company to be
transformed.
Section 13. Reconvening of the
Special Negotiating Body
(1) The special negotiating body shall be reconvened if this
has been requested in writing by at least 10 % of the employees
of the European company or European cooperative society and its
subsidiaries or their representatives, however, not earlier than
two years after the taking of the decision referred to in Section
12 of this Law, unless the parties have agreed on a shorter time
period.
(2) If the special negotiating body takes a decision to reopen
negotiations with the executive body (administrative body) of a
European company or European cooperative society, but no definite
agreement is reached during these negotiations, the standard
rules for the involvement of employees referred to in Chapter IV
of this Law shall not be applied.
Section 14. Decision Regarding
Application of Standard Rules Relating to Employee Participation
in the Acquiring Company
An executive body (administrative body) of the company to be
reorganised may decide not to open the negotiations referred to
in Section 4, Paragraph one of this Law and decide that the
standard rules relating to employee participation referred to in
Section 21 of this Law shall be applied in the acquiring
company.
Chapter
III
Agreement on Rules for the Involvement of the Employees
Section 15. Agreement on Rules by
which Employees are Involved in Decision-Making
(1) The special negotiating body and participating companies
or companies to be reorganised shall agree in writing regarding
rules by which the employees are involved in the decision-making.
For the verification of the circumstances referred to in Article
12(2) of the Council Regulation (EC) No 2157/2001 of 8 October
2001 on the Statute for a European Company (SE) (hereinafter -
Regulation 2157/2001) or Article 11(2) of the Council Regulation
(EC) No 1435/2003 of 22 July 2003 on the Statute for a European
Cooperative Society (SCE) (hereinafter - Regulation No
1435/2003), the agreement on rules by which the employees are
involved in the decision-making shall be submitted to the
Register of Enterprises.
(2) The special negotiating body and participating companies
or companies to be reorganised may not agree regarding such rules
for the involvement of the employees (especially participation
rules) which are not compatible with the type of the company.
(3) A consent of the meeting of participants, the meeting of
shareholders or the general meeting of members of the company is
necessary for the executive body (administrative body) of the
participating company or company to be reorganised in order to
enter into the agreement referred to in Paragraph one of this
Section, if it is provided for in the Statute of the company.
Section 16. Content of the
Agreement
(1) The agreement referred to in Section 15 of this Law shall
include the following:
1) the scope of the agreement;
2) provisions for the implementation of participation rights
if, during negotiations, the parties agree on participation
rights of the employees, and also the number of members in the
executive body (administrative body) or supervisory body of the
European company, European cooperative society or acquiring
company which the employees will be entitled to elect, appoint,
recommend or oppose, and the procedures as to how these members
of the referred to bodies may be elected, appointed, recommended
or opposed by the employees;
3) the date of entry into force and duration thereof, cases
where the agreement should be renegotiated and the procedures for
its renegotiation;
4) other information if the parties regard it as
necessary.
(2) In addition to the information referred to in Paragraph
one of this Section a European company and European cooperative
society shall specify the following in the agreement:
1) the composition, number of members and allocation of seats
of the representative committee - the negotiations partner of a
European company or European cooperative society;
2) the functions and the procedures for the information and
consultation of the representative committee;
3) the frequency of meetings of the representative
committee;
4) the financial and material resources to be allocated to the
representative committee;
5) the measures for the establishment of one or several
information and consultation mechanisms if, during negotiations,
the parties agree on the establishment of such a mechanism
instead of the representative committee.
(3) The agreement shall not, unless the parties agree
otherwise, be subject to the standard rules for the involvement
of employees referred to in Chapter IV of this Law.
(4) If a European company or European cooperative society is
established by transformation, at least the same level of the
involvement of employees as specified in the participating
company shall be retained in the agreement.
(5) The agreement may specify the terms and conditions for the
entitlement of employees to participate in the general meeting of
the European cooperative society or in a meeting of another type,
if any, in accordance with Section 24 of this Law and Article
59(4) of Regulation No 1435/2003.
Chapter
IV
Standard Rules for Involvement of Employees
Section 17. Application of Standard
Rules for Involvement of Employees
(1) The provisions of this Chapter shall be applied if a
special negotiating body and participating companies or companies
to be reorganised:
1) agree regarding it;
2) in the case of cross-border merger or division, the
agreement referred to in Section 15 of this Law regarding rules
by which the employees are involved in the decision-making cannot
be reached within the time period specified in Section 11 of this
Law, and the executive body (administrative body) of each
participating company or company to be reorganised agrees to the
application of standard rules.
(2) In order to verify the circumstances referred to in
Article 11(2) of Regulation No 1435/2003 and Article 12(2) of
Regulation No 2157/2001, in the case referred to in Paragraph
one, Clause 1 of this Section, the agreement of the participating
companies or companies to be reorganised and the special
negotiating body regarding the application of standard rules, but
in the case referred to in Paragraph one, Clause 2 of this
Section - confirmation of the implementation of the referred to
conditions, shall be submitted to the Register of
Enterprises.
(3) The standard rules for involvement of employees referred
to in Sections 19, 20, 21, 22 and 23 of this Law shall be applied
in a European company or European cooperative society.
(4) The participation rules referred to in Section 21 and 24
of this Law shall be applied in the acquiring company.
[11 May 2023]
Section 18. Application of Standard
Rules for Participation
Section 21, 22, 23 and 24 of this Law shall be applied if:
1) a European company or European cooperative society is
established by way of transformation and rules for participation
of the employees are applicable to the participating company
which is being transformed into a European company or European
cooperative society;
2) a European company or European cooperative society is
established by way of merger and rules for participation of
employees are in force in at least one of the participating
companies, participation rights are provided for at least 25 % of
the total number of the employees of the participating companies
or participation rights are provided for less than 25 % of the
total number of the employees of the participating companies and
the special negotiating body takes a decision to apply standard
rules for participation;
3) a European company or European cooperative society is
established as a holding company or subsidiary in such case when
participation of employees existed in at least one of the
participating companies, participation rights were provided for
at least 50 % of the total number of the employees of the
participating companies or participation rights were provided for
less than 50 % of the total number of the employees of the
participating companies and the special negotiating body takes a
decision to apply standard rules for participation;
4) in case of cross-border merger or division of capital
companies - participation of employees existed in at least one of
the companies to be reorganised, participation rights were
provided for at least 33.3 % of the total number of the employees
of the companies to be reorganised or participation rights were
provided for less than 33.3 % of the total number of the
employees of the companies to be reorganised and the special
negotiating body takes a decision to apply standard rules for
participation.
[11 May 2023]
Section 19. Establishment of the
Representative Committee and Operation Thereof
(1) The representative committee shall include the employees
of the European company or European cooperative society and its
subsidiary companies which are elected by the trade union of the
employees if it represents at least 50 % of the employees of the
European company or European cooperative company, or by the
authorised employees' representatives if the employees are not
represented by the trade union.
(2) If there are no employees' representatives in a European
company or European cooperative society, the members of the
representative committee shall be elected by all the employees of
the company pursuant to the procedures for election of authorised
employee's representatives specified in the Labour Law.
(3) If the representative committee is large enough, a select
committee comprising not more than three members shall be elected
from among its members.
(4) The number of the members of the representative committee
shall be determined in proportion to the number of the employees
of participating companies and subsidiary companies in each
Member State.
(5) Employees employed in a Member State in which the
participating company has been registered and which form 10 % (or
a smaller part of the employees if there are less than full 10 %)
of the total number of the employees employed in all Member
States shall be represented in the representative committee by
one employees' representative.
(6) The European company or European cooperative society shall
once a year inform the representative committee regarding the
changes which affect the allocation of seats in such a committee.
The composition of the representative committee shall be adjusted
so that it conforms to the changes which have occurred.
(7) The internal working regulations of the representative
committee shall be included in the rules of procedure adopted by
the representative committee.
(8) The representative committee shall inform the European
company or European cooperative society of its composition.
(9) The representative committee shall, not later than four
years after its establishment, decide by a simple majority
whether to open negotiations with the executive body
(administrative body) of the European company or European
cooperative society regarding the entering into an agreement
referred to in Section 15 of this Law or to apply standard rules
for involvement of employees referred to in Chapter IV of this
Law also in future. If the representative committee decides to
open negotiations regarding the entering into the agreement, it
has the same rights and obligations as the special negotiating
body. If after the opening of new negotiations no agreement is
reached within the time period specified in Section 11 of this
Law, the standard rules for involvement of employees referred to
in Chapter IV of this Law shall continue to be applied.
Section 20. Standard Rules for
Information and Consultation of Employees
(1) The representative committee shall participate in the
solving of the issues related to the European companies or
European cooperative societies and its subsidiary companies, and
also in the solving of such issues which are not in the
competence of the meeting of participants or shareholders or
general meeting of members in any of Member States.
(2) Meetings of the representative committee and the executive
body (administrative body) of the European company or European
cooperative society shall take place at least once a year. The
purpose of such meetings shall be, on the basis of annual
reports, to inform the representative committee and consult with
it regarding the operation of the European company or European
cooperative society and further development.
(3) The executive body (administrative body) of the European
company or European cooperative society shall inform the
representative committee regarding the issues on the agenda of
the meetings of the executive body (administrative body) and
supervisory body of the European company or European cooperative
society and shall provide the representative committee with the
copies of those documents which are submitted for examination in
the meeting of shareholders or participants or general meeting of
members.
(4) An executive body (administrative body) of a European
company or European cooperative society shall prepare the agenda
of the meeting referred to in Paragraph two of this Section and
inform the representative committee thereof.
(5) The following issues shall be examined in the meeting:
1) the structure of a company, the economic and financial
situation thereof;
2) the probable development of activities, production and
sales;
3) the situation in the area of employment and its probable
development;
4) investments (investment programmes);
5) substantial organisational changes;
6) the introduction of new working methods or production
processes;
7) the transfer of the property or important part thereof
(also units) of a company to another location;
8) the reorganisation of a company;
9) the liquidation of a company or the closure of its
units;
10) collective redundancies.
(6) The issue regarding initiatives related to corporative
social responsibility shall be examined in the European
cooperative society in addition to the issues referred to in
Paragraph five of this Section.
(7) If other circumstances arise that essentially concern the
interests of the employees (including the transfer of the
property of a company or important parts thereof (also units) to
another location, the liquidation of a company or the closure of
its units, collective redundancies), the executive body
(administrative body) of the European company or European
cooperative society shall in due time inform the representative
committee thereof. In such case the representative committee has
the right to request that a meeting with the executive body
(administrative body) of the European company or European
cooperative society is organised with a view to acquire
information and engage in consultations regarding the measures to
be performed in the company which essentially concern the
interests of the employees.
(8) If the executive body (administrative body) of the
European company or European cooperative society does not take
into account the opinion provided by the representative
committee, the representative committee has the right to request
that additional meeting is organised in order to reach an
agreement. If a meeting with the select committee is being
organised, the members of the representative committee, who
represent the employees directly affected by the relevant
measures, are also entitled to participate therein. Such meetings
shall not affect the powers of the executive body (administrative
body) of the European company or European cooperative
society.
(9) The appointment of the Chairperson of the meeting referred
to in Paragraph eight of this Section, upon mutual agreement,
shall be decided by the members of the executive body
(administrative body) of the European company or European
cooperative society and the members of the representative
committee.
(10) Prior to any meeting with the executive body
(administrative body) of the European company or European
cooperative society and the representative committee, the members
of the representative committee are entitled to meet each other
without the presence of the members of the executive bodies
(administrative bodies) of the company.
(11) The representative committee shall inform the employees'
representatives of the European company or European cooperative
society and its subsidiary companies regarding the process of
information and consultation.
(12) Where necessary, a representative committee shall use the
assistance of experts selected on the basis of their own
judgement.
Section 21. Standard Rules for
Employee Participation
(1) A representative committee (in a European company or
European cooperative society) or employees' representatives (in
the acquiring company) have the right to elect or appoint the
members of the executive body (administrative body) or
supervisory body of the company or recommend the candidates for
members of theses bodies or oppose to their appointment or
election.
(2) If different types of participation exist in participating
companies or companies to be reorganised, the special negotiating
body shall decide which type of participation to use in a
European company, European cooperative society or acquiring
company. The special negotiating body shall inform the
participating companies or companies to be reorganised of such a
decision.
(3) If a decision referred to in Paragraph two of this Section
is not taken, the type of participation existing in the
participating company or company to be reorganised having the
largest number of employees shall be used in a European company,
a European cooperative society or acquiring company, unless the
parties agree regarding reduction of participation rights
pursuant to the procedures specified in this Law.
(4) The number of members of the executive body
(administrative body) or supervisory body of the European
company, European cooperative society or acquiring company shall
comply with the highest participation level (number of seats) in
the participating companies or companies to be reorganised.
(5) The representative committee (in a European company or
European cooperative society) or employees' representatives (in
the acquiring company) shall decide regarding the allocation of
seats in the executive body (administrative body) or supervisory
body of the company according to the proportion of the employees
in each Member State or regarding the way in which the employees
may recommend the candidates for members of the executive body
(administrative body) or supervisory body or oppose to their
appointment.
(6) Every member of the executive body (administrative body)
or supervisory body of the company, who has been elected,
appointed or recommended by the representative committee or
employees' representatives, shall be a full member of the
executive body (administrative body) or supervisory body of the
company and he or she has the same rights (also the right to
vote) and obligations as the members of the executive body
(administrative body) or supervisory body of the company who
represent shareholders, participants or members.
(7) Within limits it shall be ensured that employees'
representatives of each Member State - especially of the Member
State where a European company, European cooperative society or
acquiring company is registered - shall be included in the
composition of the executive body (administrative body) or
supervisory body of the European company, European cooperative
society or acquiring company.
Section 22. Standard Rules for
Employee Participation in a European Company or European
Cooperative Society Established by Transformation
If a European company or European cooperative society is
established by way of transformation and rules for participation
are applicable to the participating company before
transformation, such participation rules shall be continued to be
applied in all aspects also after the registration of the
European company or European cooperative society.
Section 23. Rules for Employee
Participation in Case of Transfer of a Registered Office of a
European Company or European Cooperative Company
If a registered office of the European company or European
cooperative society is transferred to Latvia and the rules for
participation are applicable to the European company or European
cooperative society before transfer of the registered office,
such participation rules shall be continued to be applied in all
aspects also after the transfer of the registered office of the
European company or European cooperative society to Latvia.
Section 24. Standard Rules for
Employee Participation in the Case of Cross-border Reorganisation
of Capital Companies
Within four years after the registration of cross-border
reorganisation of capital companies the acquiring capital company
where the rules for employee participation have been introduced
shall ensure the application thereof in relation to the inland
reorganisation of the relevant capital company.
[11 May 2023]
Chapter V
Special Rules for Employee Participation in a European
Cooperative Society
Section 25. Participation of the
Employees of the European Cooperative Society in the General
Meeting
In accordance with the limitations specified in Article 59(4)
of Regulation No 1435/2003, the employees of a European
cooperative society or their representatives shall participate,
with the right to vote, in the general meeting of members or a
meeting of another type (if such exists) of the European
cooperative society if:
1) the special negotiating body and participating companies
have agreed thereon in accordance with the procedures referred to
in Section 15 of this Law;
2) a cooperative society, in which the right to vote of the
employees in the general meeting of members or in a meeting of
another type (if such exists) of such company has been
determined, is transformed into a European cooperative
society;
3) a European cooperative society has been established by way
other than transformation and the right to vote of the employees
in the general meeting of the members or in a meeting of another
type (if such exists) of the cooperative society is specified in
the participating company, but the special negotiating body and
the participating companies cannot reach the agreement specified
in Section 15 of this Law within the period provided for in
Section 11 of this Law. In such case Section 17, Paragraph one,
Clause 2 and Sections 22 and 23 of this Law shall be applied.
Chapter
VI
Rights, Obligations and Social Guarantees of the Members of the
Special Negotiating Body, the Members of the Representative
Committee and the Employeesʼ Representatives
[17 October 2019 / The
new wording of the name of the Chapter shall come into force on 1
July 2020. See Paragraph 2 of Transitional Provisions]
Section 26. Commercial Secrets
(1) The members of the special negotiating body or
representative committee and employees' representatives, and also
experts and interpreters who provide them with their services,
may not disclose to third persons the acquired information which
is a commercial secret.
(2) The prohibition specified in Paragraph one of this Section
with regard to the provision of information containing a
commercial secret to third parties shall be valid regardless of
whether the relevant person is fulfilling or has ceased to fulfil
his or her duties.
(3) The members of the executive body (administrative body) or
supervisory body of a company may refuse to provide information,
the disclosure or use of which, having regard to its character
and objective reasons, may cause substantial harm or losses to
the participating companies, companies to be reorganised, the
European company, the European cooperative society and the
acquiring company.
(4) If the executive body (administrative body) or supervisory
body of the participating companies, companies to be reorganised,
a European company, a European Cooperative Society or an
acquiring company requests not to disclose a commercial secret or
does not provide the relevant information, the employees'
representatives have the right to ask for the revision of such
decisions and apply to a court. In the time period when the
revision or judicial review of the referred to decision takes
place, the information shall be regarded as a commercial
secret.
Section 27. Expenses for Ensuring
Operation of the Special Negotiating Body and Representative
Committee
(1) Expenses related to the establishment and operation of the
special negotiating body, also to the election of its members,
organising of negotiations (premises, materials, staff, and
interpretation), and also insurance and business trips of the
members of the special negotiating body (travelling and
accommodation expenses), shall be covered by the participating
company or company to be reorganised upon mutual agreement. If
the agreement is not reached, the expenses shall be covered by
the participating company or company to be reorganised in
proportion to their number of employees.
(2) Expenses related to the establishment and operation of the
representative committee, also to the election of its members,
organising of negotiations (premises, materials, staff, and
interpretation), and also business trips of the members of the
committee (travelling and accommodation expenses), shall be
covered by the European company, European cooperative society or
acquiring company.
(3) If experts are invited, the company has an obligation to
cover expenses for the work of at least one expert.
Section 28. Rights and Obligations
of the Members of the Special Negotiating Body, the Members of
the Representative Committee and the Employees'
Representatives
(1) The same rights and obligations as specified for the
employees' representatives in the Labour Law shall be applied to
the members of the special negotiating body and the members of
the representative committee.
(2) The member of the representative committee shall be
granted a study leave so as to enable him or her to acquire the
knowledge necessary for the performance of his or her duties,
retaining the average salary for this period of time, but if a
piecework salary has been determined for him or her - the average
earnings shall be paid.
(3) In respect of the members of the special negotiating body,
the members of the representative committee and the employees'
representatives the parties may agree on more favourable terms
than provided for in this Section.
[17 October 2019 / Amendment to the title of the
Section regarding deletion of the words "and Social Guarantees"
shall come into force on 1 July 2020. See Paragraph 2 of
Transitional Provisions]
Section 29. Liability for Failure to
Comply with this Law
[17 October 2019 / See Paragraph 2 of Transitional
Provisions]
Chapter
VII
Administrative Offences in the Field of Involvement of Employees
and Competence in Administrative Offence Proceedings
[17 October 2019 / Chapter shall
come into force on 1 July 2020. See Paragraph 2 of Transitional
Provisions]
Section 30. Disclosure to Third
Parties of a Commercial Secret Obtained in the Context of the
Establishment of the European Company or the European Cooperative
Society or of the Cross-Border Reorganisation of Capital
Companies Obtained through Activities in the Special Negotiating
Body, the Representative Committee or Other Arrangements for the
Involvement of Employees
For the disclosure to third parties of the information
containing a commercial secret which has been obtained through
activities in the special negotiating body, representative
committee or in the framework of other arrangements for the
involvement of employees, a fine from twenty-eight up to seventy
units of fine shall be imposed.
[17 October 2019; 11 May 2023]
Section 31. Failure to Provide
Information to Employees or their Representatives
For the failure to provide information to employees or their
representatives on the provisions of the draft contract of
establishment or the draft contract of reorganisation of the
participating company or the company to be reorganised and the
progress of their implementation, on all the participating
companies or companies to be reorganised and on the number of
employees of these companies, and also on the measures to be
taken regarding the involvement of employees in decision-making,
a fine of up to one thousand four hundred and twenty units of
fine shall be imposed on the employer.
[17 October 2019 / Section shall come into force from 1
July 2020. See Paragraph 2 of Transitional Provisions]
Section 32. Failure to Cover the
Expenses of Establishment or Operation of the Special Negotiating
Body when Establishing a European Company or a European
Cooperative Society or in the Case of a Cross-Border
Reorganisation of Capital Companies, or Failure to Cover the
Expenses of Establishment or Operation of a Representative
Committee in a European Company or a European Cooperative
Society
For the failure to cover the expenses of establishment or
operation of the special negotiating body when establishing a
European company or a European cooperative society or in the case
of a cross-border reorganisation of capital companies, or for the
failure to cover the expenses of establishment or operation of
the representative committee in a European company or a European
cooperative society, a fine of up to one thousand four hundred
and twenty units of fine shall be imposed on the employer.
[17 October 2019; 11 May 2023]
Section 33. Failure to Submit a
Report to the Representative Committee on the Activities and
Further Development of the European Company or the European
Cooperative Society
For the failure to submit a report to the representative
committee on the activities and further development of the
European company or the European cooperative society at least
once a year, a fine of up to one thousand four hundred and twenty
units of fine shall be imposed on the employer.
[17 October 2019 / Section shall come into force from 1
July 2020. See Paragraph 2 of Transitional Provisions]
Section 34. Failure to Inform the
Representative Committee of Special Circumstances which
Essentially Concern the Interests of the Employees of the
European Company or the European Cooperative Society
For the failure to inform the representative committee of
special circumstances which essentially concern the interests of
the employees of the European company or the European cooperative
society, a fine of up to one thousand four hundred and twenty
units of fine shall be imposed on the employer.
[17 October 2019 / Section shall come into force from 1
July 2020. See Paragraph 2 of Transitional Provisions]
Section 35. Competence in
Administrative Offence Proceedings
The administrative offence proceedings for the offences
referred to in Sections 30, 31, 32, 33, and 34 of this Law shall
be conducted by the State Labour Inspectorate.
[17 October 2019 / Section shall come into force from 1
July 2020. See Paragraph 2 of Transitional Provisions]
Transitional
Provisions
[17 October 2019]
1. With the coming into force of this Law, the Law On the
Involvement of Employees in a European Cooperative Society is
repealed (Latvijas Republikas Saeimas un Ministru Kabineta
Ziņotājs, 2006, No.24).
[17 October 2019]
2. The amendment regarding the new wording of the title of
Chapter VI of this Law, the amendment to the title of Section 28
of this Law regarding the deletion of the words "and Social
Guarantees" and the amendment regarding the deletion of Section
29 of this Law, and also Chapter VII of this Law shall come into
force concurrently with the Law on Administrative Liability.
[17 October 2019]
Informative
Reference to European Union Directives
[11 May 2023]
This Law contains legal norms arising from:
1) Council Directive 2001/86/EC of 8 October 2001
supplementing the Statute for a European company with regard to
the involvement of employees;
2) Council Directive 2003/72/EC of 22 July 2003 supplementing
the Statute for a European Cooperative Society with regard to the
involvement of employees;
3) Directive (EU) 2017/1132 of the European Parliament and of
the Council of 14 June 2017 relating to certain aspects of
company law;
4) Directive (EU) 2019/2121 of the European Parliament and of
the Council of 27 November 2019 amending Directive (EU) 2017/1132
as regards cross-border conversions, mergers and divisions.
The Law has been adopted by the Saeima on 21 January
2010.
Acting for the President, the Chairperson
of the Saeima G. Daudze
Rīga, 10 February 2010
1The Parliament of the Republic of
Latvia
Translation © 2024 Valsts valodas centrs (State
Language Centre)
