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(LUXEMBOURG) – Advocate-general Saugmandsgaard Øe confirmed in an Opinion from the European Court of Justice Thursday that German law on employee participation is compatible with EU law.
German public limited company TUI AG, head of travel operator TUI group employs over 10,000 people in Germany and around 40,000 in other EU Member States. TUI AG shareholder Konrad Erzberger had challenged before the German courts the composition of the supervisory board (German public limited companies are run by management boards, supervised by the supervisory board) of that company, one half of which is, in accordance with the German law on employee participation, appointed by the shareholders and the other by the employees.
Mr Erzberger claimed TUI AG’s supervisory board should be composed only of members appointed by the shareholders and suggested that German law on employee participation was contrary to EU law: in providing that only employees of the group employed in Germany may elect the members of the supervisory board representing the employees and stand for election, that law infringes the freedom of movement for workers and the general prohibition of discrimination on grounds of nationality.
In his Opinion, Advocate General Saugmandsgaard Øe proposed that the Court should hold that legislation such as that at issue in the main proceedings does not infringe the freedom of movement for workers or the general prohibition of discrimination on grounds of nationality.
As far as concerns employees of the TUI group employed outside Germany, the Advocate General takes the view that such employees are not, in principle, covered by the freedom of movement for workers. Freedom of movement confers rights only on employees who actually make use, are considering making use or have already made use of that fundamental freedom by leaving their Member State of origin in order to pursue an economic activity in another Member State.
It is, however, highly likely that a large number of the employees in question have never made use of that right. The fact that the company which employs an employee is owned or controlled by a company established in another Member State (in the present case, Germany) is not in itself sufficient to affect the freedom of movement for workers. Furthermore, the general prohibition of discrimination on grounds of nationality does not apply to situations which are wholly internal to a Member State.
As regards the employees of the TUI group employed in Germany, the Advocate General considers, on the other hand, that the freedom of movement for workers is applicable where those employees leave or wish to leave Germany in order to take up a post in a subsidiary belonging to the group established in another Member State.
Nonetheless, the Advocate General considers that the legislation at issue does not restrict the freedom of movement for workers, even if an employee leaving Germany loses his particular right to vote and to stand. As EU law currently stands, the Member States are not required to grant workers who leave their territory in order to pursue an economic activity in another Member State the same participation rights as those enjoyed by workers employed on national territory. Should the Court come to another conclusion and find that the freedom of movement for workers has been restricted, the Advocate General considers that such a restriction is, in any event, justified. The maintenance of legislation such as that at issue in the main proceedings reflects certain legitimate economic and social policy choices that are a matter for the Member States.
Although the Advocate General is not convinced that the German employee participation system may be characterised as an element of national identity, he considers it to be beyond doubt that that system constitutes an essential element of the German employment market and – more broadly – of the German social order.
According to the Advocate General, it should be acknowledged that it is not possible to bring workers employed outside Germany within the personal scope of that system without having to modify its fundamental characteristics. Such an extension of the German system would assume that responsibility for arranging and conducting the elections be transferred from the employees and companies of the group to the management of the German parent company, which would run counter to the principles on which the system is based.
It should be noted that while the Advocate General’s Opinion is not binding on the Court of Justice, it is rare for it to be overturned.
Advocate General’s Opinion in Case C-566/15 Konrad Erzberger v TUI AG
