By 14 January 2019, joint stock companies with more than 500 employees must take all steps to meet the requirements of the amendment to the Business Corporations Act reintroducing obligatory employee representation in supervisory boards, i.e. the right of employees to elect (and revoke) one third of the members of the supervisory board, and the right of employees to be elected to such a board.
The obligation applies to joint stock companies with a dual structure and more than 500 employees working under employment agreements (not including those working on the basis of other contracts for work). Such companies will no longer be able to have a single-member supervisory board. The number of members must be divisible by three.
Of course, other companies can choose to voluntarily submit. There is nothing to prevent a company from increasing employee participation above the level required by law, but in this case, the number of members of the supervisory board elected by the employees must not exceed the number elected by the general meeting.
By 14 January 2019, companies should not only adapt their statutes and other internal regulations to the new standards, but also hold elections and register the relevant persons in the Commercial Register.
Do not underestimate the risks of late implementation. Among other things, non-fulfilment of obligations may result in the court-ordered dissolution and liquidation of the joint stock company.
This article is for informational purposes only and does not provide legal advice on any subject matter.