Can Workers’ Rights Ever Catch up? The Erzberger Case and EU Cross-border Reality

Extract

1. INTRODUCTION: IDENTIFYING THE GAPS

Is it in line with EU law that, in a group of companies, the workers’ representatives on the parent company’s Supervisory Board are selected from, and elected exclusively by, the workforce employed in the Member State of the headquarters? Even if four-fifths of the workforce are employed in other Member States? This was the central issue decided by the Court of Justice of the European Union (CJEU) in the first ever case dealing with co-determination rights: Erzberger v TUI AG.¹

These questions were by no means trivial. In 2015, more than 180,000 foreign subsidiaries in the EU, employing approximately 12 million workers, were controlled by parent companies located in—and governed by—the laws of another Member State.² Sixty per cent of these subsidiaries were dependent on parent companies located in one of the 14 EU countries with extensive regulations on board-level employee representation rights.³ Certainly, not all such parent companies necessarily include workers on their boards. Yet many of them do. The Erzberger judgment therefore set an important precedent on workers’ rights in situations of company cross-border mobility.