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COUNTRY OVERVIEW

Slovenia already has employee representation at board level and the discussions on the implementation of the SE directive played a part in producing changes in the national system, which mean that companies can now choose between a one-tier and two-tier board.

For further information on the SE legislation, such as the choice of SNB members, click on the more button.

Employee representatives have between a third and a half of the seats on the supervisory board of Slovenian companies, where companies have this two-tier board structure. Until 2006, most larger and medium-sized companies had to have such a supervisory board, but legislation introduced in April 2006 allowed them to choose between a two-tier and a one-tier board. In companies with a one-tier board, employees’ representation is reduced to a maximum of a third of the seats on the board.

The legislative change of April 2006, which was initially temporary but was made permanent by the 2007 Worker Participation Act, was in part a result of the discussions on the implementation of the European company directive. The government decided that national Slovenian companies should also have the flexibility to choose between a one and two-tier board structure just as European companies can. There was a lengthy debate on the implications this might have on employee representation at board level, with the original draft legislation proposing only very minimal employee involvement. However, under the final compromise employees have the right to choose something under one third of board members where there is a single-tier board. There is no right at all to have an employee member on the board if the company is considered a “small” company – in other words, it meets two of the following three conditions, fewer than 50 employees, sales below €7.3 million and asset value below €3.65 million. For more details see report from Janja Hojnik (University of Maribor) June 2006.

Slovenia is, therefore, one of the few countries where the implementation of the directive led to a substantial national debate on the overall role of employee representatives at board level.

The debate on changes to Slovenian national company legislation and a change of government in 2004 both contributed to a lengthy delay in transposing the directive, which only occurred in March 2006.

Form of transposition

Directive was transposed by law in March 2006, almost a year and a half after the October 2004 deadline.

The directive on employee involvement in European companies was transposed through legislation adopted by the Slovenian parliament on 2 March 2006. The full title of the legislation is Participation of Workers in Management of the European Public Limited-Liability Company Act (SE) (ZSDUEDD) (Zakon o sodelovanju delavcev pri upravljanju evropske delniške družbe (SE) (ZSDUEDD)). The Act was promulgated by the President of the Republic of Slovenia on 10 March and came into effect a few days later on 17 March 2006, when it was published in the Official Gazette.

The legislative changes necessary to adapt Slovenian company legislation to the Regulation on European companies were included in the revised Slovenian Companies Act, which also gave Slovenian national companies the opportunity to choose between a one-tier and a two-tier board (see introduction). This was passed in April 2006.

Special negotiating body (SNB)

Selection of national members

Slovenian SNB members are elected by all employees in a secret ballot.

Members of the SNB from Slovenia are elected by all employees in a secret ballot. Nominations can be made by the company works council, by “representative unions” in the company, or by at least 50 employees (Article 8). (The main union confederations are all representative at national level and other unions can be representative at company level, provided they have at least 15% of the company’s employees as members.)

External trade union representatives

The presence of external union representatives on the SNB is neither specifically prohibited nor specifically permitted by the legislation in Slovenia.

The section of the legislation on the choice of members of the SNB from Slovenia makes no reference to the issue as to whether or not they may be external union representatives (Article 8). This is in contrast to the position for the SE representative body set up under the fallback procedure, where the legislation states that only employees may be members.

Financing of experts

Funding limited to a single expert.

The companies involved must bear “all costs relating to the negotiations and operation” of the SNB. However, the legislation goes on to say that this includes the costs of “only one expert” (Article 11).

Standard rules under the fallback procedure

Allocation of national seats on SE representative body

Slovenian members of the SE representative body are chosen in the same way as Slovenian members of the SNB – through a secret ballot of all employees.

Slovenian members of the SE representative body, known in the legislation as the works council of the SE (Svet delavcev SE), are elected by all employees in a secret ballot. Nominations can be made by the company works council, by “representative unions” in the company, or by at least 50 employees (Article 21). (The main union confederations are all representative at national level and other unions can be representative at company level, provided they have at least 15% of the company’s employees as members.)

These arrangements are exactly the same as those for Slovenian members of the SNB. The only difference is that, in contrast to SNB members, the legislation specifically states that members of the representative body “may only be employees of the SE” (Article 20). External trade union representatives cannot therefore be elected.

Budget of representative body

The company should bear the costs of the representative body, although only those of a single expert.

The European company must bear the costs of the representative body, “in particular, the costs of the organisation of meetings and the provision of interpretation services and the travel and accommodation expense of the members”. However, the company is required only to bear the expenses of “one expert” invited to help the SE representative body with its work (Article 29).

National procedure for the allocation of board seats

Employee representatives at board level in Slovenian registered European companies are chosen by the SE representative body.

The SE representative body, known in the Slovenian legislation as the SE works council, chooses employee board-level representatives in SEs registered in Slovenia (Article 33). This is in line with the arrangements for the choice of employee board-level representatives in Slovenian national companies, who are chosen by the national works council. The legislation does not lay down specific arrangements for the choice of Slovenian members on the boards of SE companies registered outside Slovenia.

Misuse of procedures and structural change

Misuse of procedures

The issue of misuse of procedures is not dealt with in the Slovenian legislation.

The Slovenian legislation does not refer to the misuse of procedures and so there is no protection where an SE is set up in order to deprive employees of their right to participate in company decisions.

Structural change

There is no requirement in the Slovenian legislation to renegotiate the agreement if there has been structural change.

There is nothing in the legislation that requires the agreement to be renegotiated if there are structural changes after the SE has been set up.

Position of trade unions and employers

Unions and employers were more concerned about the wider issues of board-level employee involvement, which became part of the debate on the European company, than the details of the implementing legislation. While unions were hostile to changes which would eliminate supervisory boards, managers welcomed the possibility of moving to a one-tier board system.

The discussions around implementation of the directive on employee involvement in European companies were part of a broader discussion on board-level employee involvement in Slovenia, which the SE directive and Regulation helped to start. Unions and employers were much more concerned with this than the details of the legislation implementing the SE directive.

For the unions, the key concern was to maintain the two-tier board structure, which gives employee representatives seats on supervisory boards. As well as the danger of an overall cut in the proportion of board members who are employee representatives, Slovenian trade unions have misgivings about employee representatives on one-tier boards. They fear that they can be drawn into a relationship with management that is too close, and that they cease to represent employees’ interests. This view is based on unions’ experience with the “labour directors” who represent employees on the management boards of companies with more than 500 employees and who have responsibility for human resources and social issues.

The employers, on the other hand, while having no particularly negative views on supervisory boards, generally welcomed the option of being able to choose between a one or two-tier board. For more details see report from Janja Hojnik (University of Maribor) June 2006.

L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)

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