ACT ON INFORMING AND CONSULTING WORKERS AND EMPLOYEES IN MULTINATIONAL UNDERTAKINGS, GROUPS OF UNDERTAKINGS AND EUROPEAN COMPANIES

ACT ON INFORMING AND CONSULTING WORKERS AND EMPLOYEES IN MULTINATIONAL UNDERTAKINGS, GROUPS OF UNDERTAKINGS AND EUROPEAN COMPANIES

Effective from the date of entry into force of the Treaty of Accession of Bulgaria to the European Union

Prom. SG. 57/14 Jul 2006, amend. SG. 26/29 Mar 2011, amend. SG. 82/21 Oct 2011, amend. and suppl. SG. 93/21 Nov 2017

Chapter one.
GENERAL PROVISIONS

Subject Matter

Art. 1. This Act regulates the terms and procedure for the establishment and functioning of European Works Councils or a procedure for informing and consulting the workers and employees in multinational enterprises and groups of enterprises as well as the participation of workers and employees in the business activities of European commercial companies and European cooperative societies.

 

 

Objective

Art. 2. The purpose of this Act is to ensure the right of the workers and employees in multinational enterprises, groups of enterprises, European commercial companies and European cooperative societies to participate in the running thereof and to have their interests represented either by special bodies or through a specific procedure laid down in law.

 

 

Principles

Art. 3. The rights and obligations under this Act shall be exercised in a spirit of cooperation, mutual concessions and due regard to the interests of all the parties.

 

Chapter two.
INFORMING AND CONSULTING THE WORKERS AND EMPLOYEES IN MULTINATIONAL ENTERPRISES AND GROUPS OF ENTERPRISES

Performance of informing and consulting employees in multinational undertakings and groups of undertakings

Art. 3a. (new – SG 26/11, in force from 05.06.2011) (1) Informing and consulting the employees of a multinational enterprise or of a group of enterprises shall be performed through an European Works Council or by informing and consulting procedure.

(2) Informing and consulting the workers and employees shall be executed on the relevant level of management and representation, depending on the considered matter, and the competence of the European Works Council and of the informing and consulting with the workers and employees procedure shall be limited to trans-national matters.

(3) Where performing information and consultation, the European Works Council and the Trade Union Organisations and representatives of the workers and employees as per Art. 7, Para 2 of the Labour Code shall co-operate within the frames of their competence.

(4) Manner of co-operation and co-ordination of the information and consultation procedures through the European Works Council and through the Trade Union organisations and representatives of the workers and employees as per Art. 7, Para 2 of the Labour Code shall be settled with the agreement envisaged in Art. 8.

(5) In event that agreement provides taking of decisions which may lead to significant changes in the labour organisation or of the labour legal relationships, and in the agreement envisaged in Art. 8 manner of interaction and co-ordination is not defined, information and consultation procedures through the European Works Council and through the Trade Union organisations and through the representatives of the workers and employees as per Art. 7, Para 2 of the Labour Code, shall be conducted simultaneously.

 

 

Obligations of the Central Management Body of the enterprise

Art. 4. (1) (repealed – SG 26/11, in force from 05.06.2011)

(2) The Central Management Body of a multinational enterprise which has its registered office in the Republic of Bulgaria, or, in the case of a group of enterprises – the Central Management Body of the controlling enterprise which has its registered office in the Republic of Bulgaria, creates the conditions and means for the setting up and functioning of a European Works Council or a procedure for informing and consulting the workers and employees.

(3) The Central Management Body shall initiate negotiations for the conclusion of an agreement for the establishment of a European Works Council or an information and consultation procedure for informing and consulting the workers and employees, either on its own initiative or at the written request of at least 100 workers and employees or their representatives in at least two enterprises or two establishments in at least two different Member States.

(4) The bodies under para. 2 give notice of the opening of negotiations for the conclusion of an agreement under para. 3 to the management bodies of trade-union organizations and the representatives of the workers and employees referred to in Art. 7, para. 2 of the Labour Code working in the enterprise which carries out business activity inside the territory of the Republic of Bulgaria, as well as to the management bodies of those enterprises which carry out business activity in another Member State and are establishments of the multinational enterprise or enterprises belonging to the group of enterprises.

(5) Where the Central Management Body of the multinational enterprise or the controlling enterprise of a group of enterprises is not situated in a Member State, the obligations referred to in paras. 2 through 4 shall be performed by the management body of the enterprise which has its registered office in the Republic of Bulgaria and is either an establishment of the multinational enterprise or an enterprise belonging to the group of enterprises, provided that it has been determined that the said enterprise shall be the representative of the multinational enterprise or the controlling enterprise.

(6) In the cases referred to in para. 5, if the Central Management Body of the multinational enterprise or the controlling enterprise has not designated its representative in any Member State, the management body of the enterprise which has its registered office in the Republic of Bulgaria shall perform the obligations set forth in paras. 2 through 4, provided that it employs the greatest number of workers and employees in comparison with the other establishments and enterprises.

(7) (new – SG 26/11, in force from 05.06.2011) The Central Management Body as per Para 2 or the Management Body as per Para 5 and 6 shall be obliged to obtain and transmit to the members of the special negotiating body the information required for commencing the negotiations, and shall provide opportunity to the workers and employees to assess if the undertaking is a multinational undertaking or is a group of undertakings as per § 1, items 2 and 3 of the Additional Provisions, including information on the nmumber of employees.

 

 

Workers and employees’ representatives in the Special Negotiating Body and the European Works Council

Art. 5. (1) At their general meeting, convened in accordance with Art. 6а of the Labour Code, the workers and employees in the multinational enterprise or the controlling enterprise having its registered office in the Republic of Bulgaria, and the workers and employees in an establishment of a multinational enterprise or an enterprise belonging to a group of enterprises having its registered office in the Republic of Bulgaria, elect their representatives for participation in the Special Negotiating Body referred to in Art. 6.

(2) It is in accordance with the procedure set forth in para. 1 that workers and employees’ representatives in the European Works Council are elected under Art. 10, regardless to whether the Council is established in the Republic of Bulgaria or another Member State.

(3) The general meeting is entitled to assign the functions referred to in paras. 1 and 2 either to representatives designated by the management bodies of the trade-union organizations in the enterprise or to the workers and employees’ representatives referred to in Art. 7, para. 2 of the Labour Code.

(4) Proposals for the election of workers and employees’ representatives can be put forward by individual workers and employees, or by groups of workers and employees, or by the trade-union organizations in the enterprise.

(5) The general meeting takes its decisions referred to in paras. 1 through 3 by a simple majority of the attendees.

 

 

Special Negotiating Body

Art. 6. (1) The Special Negotiating Body represents the workers and employees in the negotiations under Art. 4, para. 3.

(2) (amend. – SG 26/11, in force from 05.06.11) The members of the special negotiating body shall be elected or appointed in proportion to the number of employees employed in each Member State by the Community-scale undertaking or Community-scale group of undertakings, by allocating in respect of each Member State one seat per portion of employees employed in that Member State amounting to 10 %, or a fraction thereof, of the number of employees employed in all the Member States taken together;

(3) (repealed – SG 26/11, in force from 05.06.2011)

(4) (repealed – SG 26/11, in force from 05.06.2011)

(5) (amend. – SG 26/11, in force from 05.06.2011)

(5) (amend. – SG 26/11), in force from 05.06.2011)The Special Negotiating Body gives notice of its composition and of the start of the negotiations to the Central Management Body of the enterprise referred to in Art. 4, para. 2 or to the management body of the enterprise referred to in Art. 4, para. 5 or para. 6, as well as to the management bodies of those enterprises which carry out business activity in another Member State or are enterprises belonging to a group of enterprises. The same information shall be provided to the workers’ and employers’ organisations on European level.

 

 

Negotiations for the conclusion of an agreement

Art. 7. (1) The Special Negotiating Body shall have the task of determining by a written agreement either with the Central Management Body referred to in Art. 4, para. 2, or with the management body referred to in Art. 4, para. 5 or para. 6, the scope, composition, functions and term of office of the European Works Council, or the arrangements for implementing a procedure for the information and consultation of workers and employees.

(2) (suppl. – SG 26/11), in force from 05.06.2011) The Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6 opens negotiations with the Special Negotiating Body, convening a meeting within one month following the date of receiving the notification referred to in Art. 6, para. 5 and giving notice of the said meeting to the management body of the establishment of the multinational enterprise or the enterprise belonging to the group of enterprises. Before and after any meeting with the central management, the special negotiating body shall be entitled to meet without representatives of the central management being present, using any necessary means for communication.

(3) (new- SG 93/17) If a member of the Special Negotiating Body or its alternate is a crew member of a seagoing ship flying the Bulgarian flag he shall have the right to participate in a meeting of the Special Negotiating Body or at any other meeting in accordance with the procedures under Art. 8, Para. 4 and 5 when at the time of the meeting he is not on a course and is not in the port of a State other than that in which the shipowner is residing.

(4) (new- SG 93/17) Where possible, meetings are scheduled to facilitate the participation of crew members on seagoing vessels who are members of the Special Negotiating Body or their alternates.

(5) (new- SG 93/17) Where a member of the Special Negotiating Body or its alternate is unable to attend a meeting, the possibilities of new information and communication technologies can be used.

(6) (new - SG 26/11, in force from 05.06.2011, prev. para. 3 - SG 93/17) In so far as this is necessary for the exercise of their representative duties in an international environment, the members of the special negotiating body shall be provided with training. Expenses for the training cannot be a loss of wages.

(7) (previous Para 3, amend. – SG 26/11, in force from 05.06.2011, prev. para. 4 - SG 93/17) The Special Negotiating Body may be assisted by experts of its choice, including representatives of the recognised on European level organisatioins of the workers and employees and of the employers. Upon its request they may attend the meetings in their capacity of consultants for negotiations without voting right.

(8) (previous Para 4 – SG 26/11, in force from 05.06.2011, prev. para. 5 - SG 93/17) The Special Negotiating Body may decide, by a majority of at least two-thirds of the votes of its members, not to open the negotiations referred to in para. 2 or to terminate the negotiations already opened. Such a decision shall terminate the procedure for concluding the agreement. In this case Arts. 10 and 11 shall not apply.

(9) (previous Para 5, amend. – SG 26/11, in force from 05.06.2011, prev. para. 6 - SG 93/17) A new request to convene the Special Negotiating Body may be made at the earliest two years after the adoption of the decision referred to in Para. 5, unless the parties to the negotiations lay down a shorter period.

(10) (previous Para 6, – SG 26/11, in force from 05.06.2011, prev. para. 7 - SG 93/17) Any expenses relating to the negotiations referred to in paras. 1 and 2 shall be borne by the Central Management Body under Art. 4, para. 2 or the management body under Art. 4, para. 5 or para. 6.

 

 

Content of the agreement

Art. 8. (1) The Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6 and the Special Negotiating Body shall negotiate in the spirit of co-operation in order to reach an agreement. The agreement shall be concluded in written.

(2) The agreement referred to in Para. 1 shall determine:

1. those enterprises belonging to a group of enterprises, or those establishments of enterprises which are covered by the agreement;

2. (amend. – SG 26/11, in force from 05.05.11) the composition of the European Works Council, the number of its members, the term of office, the allocation of seats, taking into account where possible the need for balanced representation of the workers and employees, with regard to their activities. Category and gender;

3. (amend. – SG 26/11, in force from 05.05.11) the functions and the procedure for information and consultation of the European Works Council and the arrangements for providing information to the workers and employees about the results of the conducted information and consultation;

3a. (new – SG 26/11, in force from 05.06.2011) the manner of co-operation and coordination of the procedures for information and consultation though the European Works Council and through the trade unions organisations and the representative of the employees as per Art. 7, Para 2 of the Labour Code, observing the principles laid down in Art. 3a, Para 2.

4. the venue, frequency and duration of the meetings of the European Works Council;

4a. (new – SG 26/11, in force from 05.06.2011) composition, manner of appointment of the members, functions and proceedings rules of the permanent committee, if needed to establish such within the frames of the European Works Council.

5. the financial and material resources to be allocated to the European Works Council;

6. (suppl. SG 26/11, in force from 05.06.2011) those cases in which the agreement may be renegotiated or terminated as well as the procedure for this; the agreement shall be renegotiated where this is necessary due to the occurrence of structural changes in the enterprise or the establishments following their setting up;

7. the date on which the agreement takes effect and the term of its validity;

8. other matters of common interest for the parties.

(3) The agreement referred to in para. 1 may specify that the parties have decided to apply the standard rules under Arts. 10 and 11 to the establishment of the European Works Council.

(4) The parties to the negotiations referred to in para. 1 may conclude a written agreement on establishing one or more procedures for informing and consulting the workers and employees, instead of establishing a European Works Council.

(5) The agreement referred to in para. 4 stipulates the methods by which the workers and employees’ representatives shall have the right to meet and discuss the information conveyed to them. This information shall relate in particular to transnational questions which significantly affect the major interests of the workers and employees.

(6) For the purposes of concluding the agreements referred to in paras. 1 and 4 the Special Negotiating Body shall take its decisions by a simple majority of the votes of its members.

 

 

Negotiations in event of structural changes

Art. 8a. ( new – SG 26/11, in force from 05.06.2011) (1) Where in the multinational undertaking or the group of undertakings after their incorporation structural changes occur (take over, merger, diversification of the activity, change of the ownership, etc.) as well as in the case that the respective riles are not provided in the effective agreements or incompatibility between the provisions of two r more applicable agreements exist, the central management shall start negotiations as per Art. 4, Para 3 upon its own initiative or upon a written request of 100 employees at least or of their representatives from two undertakings at least or of at least two branches in two Member States.

(2) In the cases envisaged in Para 1, in addition to the members elected and appointed as per Para 6, at least three members of the established European Works Council or of each of the established European Works Councils shall be ex lege members of the special negotiating group.

(3) During the negotiations, the established European Works Council shall continue performance of its functions according to the agreement envisaged in Art.8, where such provisions are provided in it.

 

 

Application of the standard rules

Art. 9. Where the Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6 refuses to commence negotiations within six months of the request referred to in Art. 4, para. 3, or after three years from the date of this request no agreement has been concluded and the Special Negotiating Body has not taken a decision to terminate the negotiations already opened, the respective management body shall create the conditions and means necessary for the setting up of a European Works Council by way of applying the standard rules referred to in Arts. 10 and 11 on setting up, informing and consulting the European Works Council.

 

 

Standard rules on setting up a European Works Council

Art. 10. (1) The Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6 gives notice of the setting up of the European Works Council to the representatives referred to in Art. 5, para. 1, and in case no such representatives have been elected the notice is given to the management bodies of the trade-union organizations in the enterprise and the representatives referred to in Art. 7, para. 2 of the Labour Code as well as to the management bodies of the other enterprises. The notice shall also specify the period within which the workers and employees’ representatives in the said Council must be elected.

(2) The European Works Council referred to in para. 1 shall be composed of representatives of the workers and employees in the multinational enterprise or the group of enterprises, these representatives being elected or appointed in accordance with national legislation and/or the well-established national practice of the Member State in which the election takes place.

(3) (amend. – SG 26/11, in force from 05.06.2011) Members of the European Works Council shall be elected or appointed proportionally to the number of the workers and employees, employed in each one of the Members States by the multinational undertaking or group of undertakings, and for each of the Member States one seat shall be allocated per portion of employees employed in that Member State amounting 10 per cent or a fraction thereof, of the number of employees employed in all the Member States taken together. The Council shall adopt Regulations of its activity.

(4) (new – SG 26/11, in force from 05.06.2011) The European Works Council shall be entitled to elect among its members Permanent Committee composed of five persons in view its effective functioning. The Permanent Committee shall be provide with appropriate conditions, needed for the execution of its duties.

(5) (previous Para 4 – SG 26/11, in force from 05.06.2011) The European Works Council Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6 must ensure that each Member State in which the multinational enterprise has one or more establishments, or the group of enterprises has a controlling enterprise or one or more controlled enterprises, is represented by at least one member.

(6) (previous Para 5 – SG 26/11, in force from 05.06.2011)The Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6 shall determine the number of supplementary members of the Special Negotiating Body in accordance with the ratio of the number of workers and employees working in the multinational enterprise and its establishments or enterprises belonging to a group of enterprises carrying out business activity inside the territory of the Republic of Bulgaria, to the number of workers and employees in the said enterprises and establishments in all Member States, 25 percent of the total number corresponding to one seat.

(7) (previous Para 6 – SG 26/11, in force from 05.06.2011)The European Works Council shall inform of its composition the Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6.

(8) (previous Para 7 – SG 26/11, in force from 05.06.2011)Within a period of 4 years after the European Works Council is set up it shall decide whether to open negotiations for the conclusion of the agreement referred to in Art. 8 or to continue applying the standard rules. In this case it shall perform the functions of the Special Negotiating Body.

(9) (previous Para 8 – SG 26/11, in force from 05.06.2011) No European Works Council shall be set up in a European Commercial Company or a European Cooperative Society having its registered office in the Republic of Bulgaria if it is a multinational enterprise or a controlling enterprise, except where the Special Negotiating Body of the respective Company or Society decides not to open negotiations or to terminate the negotiations already opened and to set up such a Council.

(10) (previous Para 9, amend. – SG 26/11, in force from 05.06.2011)The rules on the setting up of a European Works Council shall not rescind the workers and employees’ right of being informed and consulted following the provisions of Art. 130, 130a and 130b of the Labour Code.

 

 

Standard rules on informing and consulting the European Works Council

Art. 11. (1) The European Works Council shall be provided with information and shall be consulted on general matters concerning the multinational enterprise as a whole, or the group of enterprises as a whole, or at least two establishments or two enterprises belonging to the group of enterprises situated in different Member States.

(2) In the cases referred to in Art. 4, para. 5 or para. 6 the European Works Council shall be provided with information and shall be consulted on matters concerning all the establishments of the multinational enterprise, or the enterprises belonging to a group of enterprises situated within the Member States, or concerning at least two establishments of theirs, or two enterprises belonging to the group of enterprises situated in different Member States.

(3) The European Works Council shall be informed and consulted as referred in para. 2 at a joint meeting with the Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6, such a meeting being held at least once a year. On the basis of a report drawn by the management body on the progress of the business activity and the prospects of the multinational enterprise or the group of enterprises, the following shall be discussed at the meeting:

1. structure of the enterprise or establishments;

2. economic and financial situation of the enterprises or establishments;

3. probable development of business activity;

4. situation and probable trends of employment;

5. investments and substantial changes concerning the organization;

6. introduction of new working methods or production processes;

7. transfer of production, transformation of companies, cutbacks or closure of enterprises, establishments or parts thereof;

8. probable collective redundancies;

9. other matters of interest for the parties.

(4) Where there are exceptional circumstances affecting the workers and employees’ interests to a considerable extent, such as relocation to another State, closure of establishments or enterprises, collective redundancies, the Standing Committee - or the European Works Council if no such a Committee has been elected – shall have the right to seek the holding of a meeting with the Central Management Body or another management body of the multinational enterprise or the group of enterprises in order to get informed and be consulted regarding the measures concerning the workers and employees.

(5) Where the meeting referred to in para. 4 has been organized with the Standing Committee it may also be attended by the members of the European Works Council who have been elected or appointed by the establishments and/or the enterprises which are directly affected by the measures envisaged.

(6) The meeting referred to in para. 4 shall be held without delay. A report shall be heard out at the meeting, this report being drawn up by the Central Management Body or another management body of the multinational enterprise or the group of enterprises, and opinions shall be expressed on the matters contained in the report.

(7) Prior to holding a meeting with the Central Management Body, the European Works Council or the Standing Committee and the members of the European Works Council who participate in the meeting referred to in para. 5 shall have the right to have a meeting without that Body’s representatives being present.

(8) (amend. – SG 26/11, in force from 05.06.2011) The members of the European Works Council shall inform the trade union organisations and the representative of the workers and employees of the content of the submitted information and the outcome of the consultation procedure that has been carried out; and in the cases where there is no trade union organisations or there is no selected representatives of the workers and employees as per Art. 7, Para 2 of the Labour Code, the respective workers and employees shall be informed directly.

(9) (new- SG 93/17) If a member of the European Works Council or its alternate is a crew member of a seagoing ship flying the Bulgarian flag he shall have the right to participate in a meeting of the European Works Council or at any other meeting in accordance with the procedures under Art. 15, Para. 3, item 6 when at the time of the meeting he is not on a course and is not in the port of a State other than that in which the shipowner is residing.

(10) (new- SG 93/17) Where possible, meetings are scheduled to facilitate the participation of crew members on seagoing vessels who are members of the European Works Council or their alternates.

(11) (new- SG 93/17) Where a member of the European Works Council or its alternate is unable to attend a meeting, the possibilities of new information and communication technologies can be used.

(12) (new – SG 26/11, in force from 05.06.2011, prev. para. 9 - SG 93/17) The members of the European Works Council or of the Permanent Committee shall be provide with training, funded by the employer, where such is needed for execution of their representative functions for participation in international events. Expenses for the training cannot be on the account of their labour remuneration.

(13) (previous Para 9 – SG 26/11, in force from 05.06.2011, prev. para. 10 - SG 93/17) The European Works Council or the Standing Committee shall be assisted by experts of their choice insofar as that is necessary for them to carry out their tasks.

(14) (previous Para 10 – SG 26/11, in force from 05.06.2011, prev. para. 3 - SG 93/17) The operating expenses of the European Works Council shall be borne by the Central Management Body referred to in Art. 4, para. 2 or the management body referred to in Art. 4, para. 5 or para. 6. The latter shall provide the members of the European Works Council with such financial and material resources as enable them to perform their duties. In particular, it shall meet the cost of organizing meetings and arranging for interpretation facilities and the accommodation and travelling expenses of the members of the European Works Council and its Standing Committee.

 

Chapter three.
INFORMING AND CONSULTING THE WORKERS AND EMPLOYEES IN ESTABLISHING A EUROPEAN COMMERCIAL COMPANY

Obligation to inform

Art. 12. Where the management bodies of the participating companies draw up a plan for establishing a European commercial company, immediately after the announcement of the plan for takeover or merger, or the setting up of a holding company, or the coordination of a plan for the setting up of a subsidiary or the transformation into a European commercial company, the management body of the company or companies which carry out business activity inside the territory of the Republic of Bulgaria and participate in the setting up of a European commercial company submits to both the management bodies of the trade-union organizations in the enterprise and to the workers and employees’ representatives referred to in Art. 7, para. 2 of the Labour Code information regarding the participating companies, the subsidiaries or establishments, and the number of workers and employees therein, for the purposes of setting up a Special Negotiating Body.

 

 

Representatives of the workers and employees in the Special Negotiating Body and in the representative body in the setting up of a European commercial company

Art. 13. (1) The workers and employees in those companies which carry out business activity inside the territory of the Republic of Bulgaria and participate in the setting up of a European commercial company elect their representatives in the Special Negotiating Body referred to in Art. 14 at a general meeting convened in accordance with the procedure set forth in Art. 6а of the Labour Code.

(2) The workers and employees under para. 1 also elect their representatives in the representative body referred to in Art. 17, regardless to whether the said body is set up in the Republic of Bulgaria or another Member State.

(3) The general meeting shall be entitled to assign its functions referred to in paras. 1 and 2 either to representatives designated by the management bodies of the trade-union organizations in the enterprise or to the workers and employees’ representatives referred to in Art. 7, para. 2 of the Labour Code.

(4) Proposals for the election of workers and employees’ representatives may be put forward by individual workers and employees, or by groups of workers and employees, or by the trade-union organizations in the enterprise.

(5) The general meeting shall take its decisions referred to in paras. 1 through 3 by a simple majority of the attendees.

(6) The number of the representatives referred to in paras. 1 and 2 shall be determined in accordance with the ratio of the number of the workers and employees in the participating companies and the respective subsidiaries or establishments carrying out business activity inside the territory of the Republic of Bulgaria to the number of workers and employees in the participating companies and the respective subsidiaries or establishments in all Member States, 10 percent of the total number corresponding to one seat.

(7) Where the ratio referred to in para. 6 changes, the number of the workers and employees’ representatives shall be brought in line with the changes that have occurred.

(8) In the case of a European commercial company formed by way of merger or takeover there shall be such further supplementary members as may be necessary in order to ensure that the Special Negotiating Body includes at least one member representing each participating company or establishment that has undergone merger or takeover and is to be wound up, provided that:

1. the number of the supplementary members does not exceed 20 percent of the number of members determined in accordance with para. 6, and

2. the composition of the Special Negotiating Body does not bring about double representation of the same workers and employees.

(9) In those cases where the number of the companies undergoing merger or takeover exceeds the limitation referred to in para. 8, item 1, the supplementary seats shall be allocated among the companies of the different Member States in descending order of the number of workers and employees therein.

(10) In electing the workers and employees’ representatives referred to in para. 1 those participating companies which carry out business activity inside the territory of the Republic of Bulgaria shall be entitled to agree that each of them shall have its own representative in the Special Negotiating Body, provided that the total number of the members of the said Body does not exceed the ratio referred to in para. 6 or the requirements set forth in para. 8.

 

 

Working rules of the Special Negotiating Body

Art. 14. (1) The Special Negotiating Body and the management bodies of the participating companies shall determine by written agreement the arrangements for the participation of the workers and employees in the European commercial company.

(2) Prior to the conclusion of the agreement the management bodies of the participating companies shall inform the Special Negotiating Body of the plan and the actual process of setting up the European commercial company, up to its registration.

(3) Each member of the Special Negotiating Body shall have one vote. The Special Negotiating Body shall take its decisions by an absolute majority of its members, provided that such a majority also represents an absolute majority of the workers and employees in the European commercial company.

(4) Should the result of negotiations lead to a reduction of participation rights, the majority required under para. 3 shall be the votes of two thirds of the members of the Special Negotiating Body, representing at least two thirds of the workers and employees, including the votes of the members representing the workers and employees employed in at least two Member States in those cases where:

1. the European commercial company has been established by way of merger or takeover, if participation covers at least 25 percent of the overall number of workers and employees in the participating companies, or

2. the European commercial company has been established by way of setting up a holding company or a subsidiary, provided that the participation involves at least 50 percent of the total number of the workers and employees in the participating companies.

(5) The Special Negotiating Body shall be assisted by experts of its choice and by representatives of the representative trade-union organizations in the European Union. It is at an invitation of the Special Negotiating Body that the experts shall be entitled to attend the negotiations with an advisory vote.

(6) The Special Negotiating Body may decide not to open negotiations or to terminate negotiations already opened and to decide to apply those rules on informing and consulting the workers and employees which are operative in the Member States in which the company has its workers and employees. Such a decision shall terminate the procedure for concluding the agreement.

(7) The decision referred to in para. 6 shall be taken by a majority of two thirds of the members of the Special Negotiating Body if they represent at least two thirds of the workers and employees in the European commercial company and represent workers and employees in at least two Member States.

(8) Where the European commercial company is established by way of transformation and there exist rules on the workers and employees’ participation in the Company which will undergo transformation, the provisions set forth in paras. 6 and 7 shall not apply.

(9) It is at the written request of at least 10 percent of the workers and employees in the European commercial company, its subsidiaries and establishments or the representatives thereof that the meeting of the Special Negotiating Body may be reconvened at the earliest two years after the decision under para. 6, unless the parties agree to negotiations being reopened sooner. If the Special Negotiating Body decides to reopen the negotiations, but no agreement is reached, the provisions of Arts. 17 through 19 shall not apply.

(10) The operating expenses of the Special Negotiating Body shall be borne by the participating companies.

 

 

Content of the agreement

Art. 15. (1) The agreement on the arrangements for the participation of the workers and employees in the European commercial company shall be negotiated in a spirit of cooperation between the Special Negotiating Body and the management bodies of the participating companies.

(2) The negotiations referred to in Art. 14 shall commence as soon as the Special Negotiating Body is set up and may continue for up to 6 months thereafter. The parties may decide by joint agreement to extend these negotiations up to a total of one year from the setting up of the Special Negotiating Body.

(3) The agreement shall specify:

1. the companies the agreement applies to;

2. the composition, number of members and allocation of seats on the representative body;

3. the functions and procedure for the information and consultation of the representative body;

4. the frequency of the meetings of the representative body;

5. the financial and material resources to be allocated to the representative body;

6. the arrangements for implementing one or more information and consultation procedures if the parties have decided to establish such procedures instead of establishing a representative body;

7. the substance of the arrangements for the participation of workers and employees in those cases where the parties have decided to establish such arrangements, including the number of members in the management or supervisory body of the European commercial company which the workers and employees will be entitled to elect, appoint, recommend or oppose the membership of, the procedure for it and the rights of these members;

8. the cases where the agreement may be renegotiated and the procedure for the said renegotiation; the agreement shall be renegotiated if that is necessary due to structural changes in the Company or its subsidiaries or establishments which occur after the creation thereof;

9. the date of entry into force of the agreement and its duration;

10. other matters of interest for the parties.

(4) The agreement referred to in para. 1 may specify that in setting up the representative body the parties have decided to apply the standard rules referred to in Arts. 17 through 19.

(5) In the cases referred to in para. 3, item 7 the agreement should provide for at least the same level of the elements of participation of the workers and employees as the one that existed in the Company prior to its being transformed into a European commercial company.

 

 

Application of standard rules

Art. 16. (1) Where the Special Negotiating Body and the management bodies of the participating companies have taken a decision referred to Art. 15, para. 4, there shall apply the standard rules on setting up, informing and consulting the representative body as well as the rules on participation referred to in Arts. 17 through 19.

(2) The standard rules referred to in Arts. 17 through 19 shall also apply where the Special Negotiating Body and the management bodies of the participating companies have not concluded an agreement within the period of time under Art. 15, para. 2 and the management body of each participating company has decided to accept the application of the standard rules in relation to the European commercial company and to continue with its registration, and the Special Negotiating Body has not taken the decision referred to in Art. 14, para. 6 to apply those rules on informing and consulting the workers and employees which are operative in the Member States in which the European commercial company has its workers and employees.

(3) The standard rules on participation referred to in Art. 19 shall apply to a European commercial company having its registered office in Bulgaria in those cases where:

1. rules on workers and employees’ participation in the management or supervisory bodies have applied to the Company undergoing transformation into a European commercial company, or

2. prior to the registration of the European commercial company created by way of establishing a holding company or a subsidiary, forms of participation have been applied to one or more of the participating companies, these forms involving at least 50 percent of the total number of workers and employees therein, or

3. prior to the registration of the European commercial company created by way of establishing a holding company or a subsidiary, forms of participation have been applied to one or more of the participating companies, these forms involving at least 50 percent of the total number of workers and employees therein and provided that the Special Negotiating Body has taken such a decision, or

4. prior to the registration of the European commercial company created by way of merger or takeover, forms of participation have been applied to one or more of the participating companies, these forms involving at least 25 percent of the total number of workers and employees therein, or

5. prior to the registration of the European commercial company created by way of merger or takeover, forms of participation have been applied to one or more of the participating companies, these forms involving at least 25 percent of the total number of workers and employees therein, and provided that the Special Negotiating Body has taken such a decision.

(4) In the cases referred to in para. 3, items 2 and 3, if more than one forms of participation in the various participating companies have been applied, the Special Negotiating Body shall take a decision as to which of these forms shall be applied to the European commercial company and shall inform thereof the management bodies of the companies.

 

 

Standard rules on the setting up of a representative body

Art. 17. (1) In those cases where the European commercial company has its registered office in the Republic of Bulgaria, after its registration a representative body of the workers and employees shall be established for the purpose of providing conditions for the participation of the workers and employees in the business activity of the Company.

(2) The representative body shall be composed of workers and employees in the European commercial company and its subsidiaries and establishments, these workers and employees being elected or appointed in accordance with national legislation and/or the well-established national practice of the Member State in which the election takes place.

(3) The representative body shall adopt its own rules of procedure.

(4) Where the size of the representative body allows for it, the latter shall elect from among its members a Standing Committee comprising at most three persons.

(5) The representative body shall notify the management body of the European commercial company of its composition.

(6) Within a period of 4 years after the representative body is set up it shall decide whether to open negotiations for the conclusion of the agreement referred to in Art. 15 or to continue applying the standard rules referred to in Arts. 18 and 19. If the representative body decides to open negotiations, it shall perform the functions of the Special Negotiating Body referred to in Art. 14.

(7) In the cases referred to in para. 6, if no agreement has been concluded within the period for concluding the negotiations set forth in Art. 15, para. 2, the standard rules referred to in Arts. 18 and 19 shall apply.

 

 

Standard rules on informing and consulting the representative body

Art. 18. (1) The representative body shall be provided with information and shall be consulted on general matters concerning the European commercial company and its subsidiaries or establishments in another Member State as well as on those matters which are beyond the powers of the management bodies within the Member State.

(2) The representative body shall be informed and consulted at a joint meeting with the management body of the European commercial company, such a meeting being held at least once a year. The local management bodies of the Company shall be informed of the meeting.

(3) On the basis of a report drawn up by the management body on the progress of the business activity and the prospects of the European commercial company, the following shall be discussed at the meeting:

1. the structure;

2. the economic and financial situation;

3. the probable development of business activity;

4. the situation and probable trends of employment;

5. the investments and the substantial changes concerning the organization;

6. the introduction of new working methods or production processes;

7. the transfer of production, the transformation of the Company, cutbacks or closure of subsidiaries, establishments or parts thereof;

8. probable collective redundancies;

9. other matters of interest for the parties.

(4) The management body of the European commercial company shall submit to the representative body the agenda of its meetings or, if necessary, the agendas of the meetings of the supervisory body, as well as copies of all documents submitted to the general assembly of the shareholders.

(5) Where there are exceptional circumstances affecting the workers’ and employees’ interests to a considerable extent, such as relocation to another State, transfer, closure of subsidiaries or establishments, or collective redundancies, the representative body - or the elected Standing Committee, if the representative body so decides – shall have the right to seek the holding of a meeting either with the management body of the European commercial company or with another management body in order to be informed and consulted regarding the measures concerning the workers and employees.

(6) Where the management body decides not to undertake measures in the cases referred to in para. 5, the representative body shall have the right to seek a new meeting for concluding an agreement.

(7) Where the meeting referred to in para. 5 has been organized with the Standing Committee it may also be attended by the members of the representative body representing those workers and employees who have been directly affected by the respective measures.

(8) The meetings held shall not affect the powers of the management body.

(9) Prior to holding a meeting with the management body of the European commercial company, the representative body or the Standing Committee, as well as the members of the representative body referred to in para. 7, shall have the right to have a meeting without the said body’s representatives being present.

(10) In observance of the provisions set forth in Art. 29, the members of the representative body shall inform the workers and employees’ representatives in the European commercial company and the subsidiaries and establishments thereof of the content of the submitted information and the outcome of the consultation procedure carried out.

(11) The representative body and the Standing Committee shall be assisted by experts of their choice.

(12) The operating expenses of the representative body shall be borne by the European commercial company. The latter shall provide the members of the representative body with such financial and material resources as enable them to perform their duties. In particular, it shall meet the cost of organizing meetings and arranging for interpretation facilities and the accommodation and travelling expenses of the members of the representative body and its Standing Committee.

 

 

Standard rules on participation

Art. 19. (1) Where the established European commercial company has its registered office in the Republic of Bulgaria, the workers and employees in the European commercial company and its subsidiaries and establishments, as well as the representative body thereof, shall have the right to elect, appoint, or recommend a certain number of members of the management or supervisory body of the Company, this number corresponding to the level of participation in the management prior to the registration of the European commercial company.

(2) Where the European commercial company having its registered office in the Republic of Bulgaria is established by way of transformation, those rules regarding the participation of the workers and employees in the management and supervisory bodies which have applied prior to the registration of the Company shall continue being applied after its being established.

(3) The provision set forth in para. 1 shall not apply if prior to the registration of the European commercial company in the Republic of Bulgaria none of the participating companies has applied any participation rules.

(4) The representative body shall take decisions regarding the allotment of the seats on the management and supervisory bodies among the members representing the workers and employees of different Member States and regarding the way in which the workers and employees may recommend or oppose the membership in the said bodies in accordance with the proportional representation thereof in each Member State.

(5) Should the workers and employees in one or more Member States are not covered by the proportional criterion under para. 4, the representative body shall designate a member from one of these Member States.

(6) Each Member State shall distribute the seats allotted under para. 4 in accordance with its national legislation and/or the well-established national practice.

(7) Each member of the management or supervisory body of the European commercial company who has been elected, or appointed, or recommended by either the representative body or the workers and employees, shall have the same rights and obligations as the representatives of the shareholders, including the voting rights.

(8) In those cases where Bulgarian legislation has laid down rules that differ from the standard participation rules, they shall not apply.

 

Chapter four.
INFORMING AND CONSULTING THE WORKERS AND EMPLOYEES IN ESTABLISHING A EUROPEAN COOPERATIVE SOCIETY

Obligation to inform

Art. 20. Where the management bodies of the legal persons draw up a project for establishing a European cooperative society, immediately after the announcement of the project for its establishment, the management bodies of the legal persons which carry out business activity inside the territory of the Republic of Bulgaria and participate in the setting up of a European cooperative society take the necessary measures and submit to both the management bodies of the trade-union organizations in the enterprise and to the workers and employees’ representatives referred to in Art. 7, para. 2 of the Labour Code information regarding the participating legal persons, the subsidiaries or establishments, and the number of workers and employees therein, for the purposes of setting up a Special Negotiating Body.

 

 

Representatives of the workers and employees in the Special Negotiating Body and in the representative body in the setting up of a European cooperative society

Art. 21. (1) The workers and employees in those companies which carry out business activity inside the territory of the Republic of Bulgaria and participate in the setting up of a European cooperative society elect their representatives in the Special Negotiating Body referred to in Art. 22 at a general meeting convened in accordance with the procedure set forth in Art. 6а of the Labour Code.

(2) The workers and employees under para. 1 also elect their representatives in the representative body referred to in Art. 25, regardless to whether the said body is set up in the Republic of Bulgaria or another Member State.

(3) The general meeting shall be entitled to assign its functions referred to in paras. 1 and 2 either to representatives designated by the management bodies of the trade-union organizations in the enterprise or to the workers and employees’ representatives referred to in Art. 7, para. 2 of the Labour Code.

(4) Proposals for the election of workers and employees’ representatives may be put forward by individual workers and employees, or by groups of workers and employees, or by the trade-union organizations in the enterprise.

(5) The general meeting shall take its decisions referred to in paras. 1 through 3 by a simple majority of the attendees.

(6) The number of the representatives referred to in paras. 1 and 2 is determined in accordance with the ratio of the number of the workers and employees in the participating legal persons and the respective subsidiaries or establishments carrying out business activity inside the territory of the Republic of Bulgaria to the number of workers and employees in the participating legal persons and the respective subsidiaries or establishments in all Member States, 10 percent of the total number corresponding to one seat.

(7) Where the ratio referred to in para. 6 changes, the number of the workers and employees’ representatives shall be brought in line with the changes that have occurred, efforts being put in observing the principle of equality between men and women.

(8) In the case of a European cooperative society formed by way of merger or takeover there shall be such further supplementary members as may be necessary in order to ensure that the Special Negotiating Body includes at least one member representing each merging cooperative society that has been registered and has its workers and employees in the Republic of Bulgaria and is to be wound up, provided that:

1. the number of the supplementary members does not exceed 20 percent of the number of members determined in accordance with para. 6, and

2. the composition of the Special Negotiating Body does not bring about double representation of the same workers and employees.

(9) In those cases where the number of the cooperative societies undergoing merger exceeds the limitation referred to in para. 8, item 1, the supplementary seats shall be allocated among the companies of the different Member States in descending order of the number of workers and employees therein.

(10) In electing the workers and employees’ representatives referred to in para. 1 those participating legal persons, and subsidiaries, and establishments which carry out business activity inside the territory of the Republic of Bulgaria shall be entitled to agree that each of them shall have its own representative in the Special Negotiating Body, provided that the total number of the members of the said Body does not exceed the ratio referred to in para. 6 or the requirements set forth in para. 8, efforts being put in observing the principle of equality between men and women.

 

 

Working rules of the Special Negotiating Body

Art. 22. (1) The Special Negotiating Body and the management bodies of the participating legal persons shall determine by written agreement the arrangements for the involvement of the workers and employees in the European cooperative society.

(2) Prior to the conclusion of the agreement the management bodies of the participating legal persons shall inform the Special Negotiating Body of the project and the actual process of setting up the European cooperative society, up to its registration.

(3) Each member of the Special Negotiating Body shall have one vote. The Special Negotiating Body shall take its decisions by an absolute majority of its members, provided that such a majority also represents an absolute majority of the workers and employees in the European cooperative society.

(4) Should the result of negotiations lead to a reduction of participation rights, the majority required under para. 3 shall be the votes of two thirds of the members of the Special Negotiating Body, representing at least two thirds of the workers and employees, including the votes of the members representing the workers and employees employed in at least two Member States where:

1. the European cooperative society has been established by way of merger, if participation covers at least 25 percent of the overall number of workers and employees in the participating legal persons, or

2. the European cooperative society has been established by any other way, provided for in Regulation 1435/2003/EC of the Council, if the participation involves at least 25 percent of the total number of the workers and employees in the participating legal persons.

(5) The Special Negotiating Body shall be assisted by experts of its choice and by representatives of the representative trade-union organizations in the European Union. It is at an invitation of the Special Negotiating Body that the experts shall be entitled to attend the negotiations with an advisory vote.

(6) The Special Negotiating Body may decide not to open negotiations or to terminate the negotiations already opened and to decide to apply those rules on informing and consulting the workers and employees which are operative in the Member States in which the European cooperative society has its workers and employees. Such a decision shall terminate the procedure for concluding the agreement.

(7) The decision referred to in para. 6 shall be taken by a majority of two thirds of the members of the Special Negotiating Body if they represent at least two thirds of the workers and employees in the European cooperative society and represent workers and employees in at least two Member States.

(8) Where the European cooperative society is established by way of transformation and there exist rules on the workers and employees’ participation in the cooperative society which will undergo transformation, the provisions set forth in paras. 6 and 7 shall not apply.

(9) It is at the written request of at least 10 percent of the workers and employees in the European cooperative society, its subsidiaries and establishments or the representatives thereof that the meeting of the Special Negotiating Body may be reconvened at the earliest two years after the adoption of the decision under para. 6, unless the parties agree to negotiations being reopened sooner. If the Special Negotiating Body decides to reopen the negotiations, but no agreement is reached, the provisions of Arts. 25 through 27 shall not apply.

(10) The operating expenses of the Special Negotiating Body shall be borne by the participating legal persons.

 

 

Content of the agreement

Art. 23. (1) The agreement on the arrangements for the participation of the workers and employees in the European cooperative society shall be negotiated in a spirit of cooperation between the Special Negotiating Body and the management bodies of the participating legal persons.

(2) The negotiations referred to in Art. 22 shall commence as soon as the Special Negotiating Body is set up and they may continue for up to 6 months thereafter. The parties may decide by joint agreement to extend these negotiations up to a total of one year from the setting up of the Special Negotiating Body.

(3) The agreement shall specify:

1. the legal persons the agreement applies to;

2. the composition, number of members and allocation of seats on the representative body;

3. the functions and procedure for the information and consultation of the representative body;

4. the frequency of the meetings of the representative body;

5. the financial and material resources to be allocated to the representative body;

6. the arrangements for implementing one or more information and consultation procedures if the parties have decided to establish such procedures instead of establishing a representative body;

7. the substance of the arrangements for the participation of workers and employees in those cases where the parties have decided to establish such arrangements, including the number of members in the management or supervisory body of the European cooperative society which the workers and employees will be entitled to elect, appoint, recommend or oppose the membership of, the procedure for it and the rights of these members;

8. the cases where the agreement may be renegotiated and the procedure for its renegotiation; the agreement shall be renegotiated if that is necessary due to structural changes in the cooperative society or its subsidiaries or establishments which occur after the creation thereof;

9. the date of entry into force of the agreement and its duration;

10. other matters of interest for the parties.

(4) The agreement referred to in para. 1 may specify that in setting up the representative body the parties have decided to apply the standard rules referred to in Arts. 25 through 27.

(5) In the cases referred to in para. 3, item 7 the agreement should provide for at least the same level of the elements of participation of the workers and employees as the one that existed in the cooperative society prior its being transformed into a European cooperative society.

 

 

Application of standard rules

Art. 24. (1) Where the Special Negotiating Body and the management bodies of the participating legal persons have taken the decision referred to in Art. 23, para. 4, there shall apply the standard rules on setting up, informing and consulting the representative body as well as the rules on participation referred to in Arts. 25 through 27.

(2) The standard rules referred to in Arts. 25 through 27 shall also apply where the Special Negotiating Body and the management bodies of the participating legal persons have not concluded an agreement within the period of time under Art. 23, para. 2 and the management body of each participating legal person has decided to accept the application of the standard rules in relation to the European cooperative society and to continue with its registration, and the Special Negotiating Body has not taken the decision referred to in Art. 22, para. 6 to apply those rules on informing and consulting the workers and employees which are operative in the Member States in which the European cooperative society has its workers and employees.

(3) The standard rules on participation referred to in Art. 27 shall apply to a European cooperative society having its registered office in Bulgaria in those cases where:

1. rules on workers and employees’ participation in the management or supervisory bodies have applied to the cooperative society undergoing transformation into a European cooperative society, or

2. prior to the registration of the European cooperative society created by any other way laid down in Regulation 1435/2003/EC of the Council, forms of participation have been applied to one or more of the participating legal persons, these forms involving at least 50 percent of the total number of workers and employees therein, or

3. prior to the registration of the European cooperative society created by any other way laid down in Regulation 1435/2003/EC of the Council, forms of participation have been applied to one or more of the participating legal persons, these forms involving at least 50 percent of the total number of workers and employees therein and provided that the Special Negotiating Body has taken such a decision, or

4. prior to the registration of the European cooperative society created by way of merger or takeover, forms of participation have been applied to one or more of the participating legal persons, these forms involving at least 25 percent of the total number of workers and employees therein, or

5. prior to the registration of the European cooperative society created by way of merger or takeover, forms of participation have been applied to one or more of the participating legal persons, these forms involving at least 25 percent of the total number of workers and employees therein, and provided that the Special Negotiating Body has taken such a decision.

(4) In the cases referred to in para. 3, items 2 and 3, if more than one forms of participation in the various participating legal persons have been applied, the Special Negotiating Body shall take a decision as to which of these forms shall be applied to the European cooperative society and shall inform thereof the management bodies of the participating legal persons.

 

 

Standard rules on the setting up of a representative body

Art. 25. (1) In those cases where the European cooperative society has its registered office in the Republic of Bulgaria, after its registration a representative body of the workers and employees shall be established for the purpose of providing conditions for the participation of the workers and employees in the activities of the Society.

(2) The representative body shall be composed of workers and employees in the European cooperative society and its subsidiaries and establishments, these workers and employees being elected or appointed in accordance with national legislation and/or the well-established national practice of the Member State in which the election takes place.

(3) The representative body shall adopt its own rules of procedure.

(4) Where the size of the representative body allows for it, the latter shall elect from among its members a Standing Committee comprising at most three persons.

(5) The representative body shall notify the management body of the European cooperative society of its composition.

(6) Within a period of 4 years after the representative body is set up it shall decide whether to open negotiations for the conclusion of the agreement referred to in Art. 23 or to continue applying the standard rules referred to in Arts. 26 and 27. If the representative body decides to open negotiations, it shall perform the functions of the Special Negotiating Body referred to in Art. 22.

(7) In the cases referred to in para. 6, if no agreement has been reached within the period for concluding the negotiations set forth in Art. 23, para. 2, the standard rules referred to in Arts. 26 and 27 shall apply.

 

 

Standard rules on informing and consulting the representative body

Art. 26. (1) The representative body shall be provided with information and shall be consulted on general matters concerning the European cooperative society and its subsidiaries or establishments in another Member State as well as on those matters which are beyond the powers of the management bodies within the Member State.

(2) The representative body shall be informed and consulted at a joint meeting with the management body of the European cooperative society, such a meeting being held at least once a year. The local management bodies of the Society shall be informed of the meeting.

(3) On the basis of a report drawn up by the management body on the progress of the business activity and the prospects of the European cooperative society, the following shall be discussed at the meeting:

1. the structure;

2. the economic and financial situation;

3. the probable development of business activity;

4. the measures regarding social policy;

5. the situation and probable trends of employment;

6. the investments and the substantial changes concerning the organization;

7. the introduction of new working methods or production processes;

8. the transfer of production, the transformation of the Society, cutbacks or closure of subsidiaries, establishments or parts thereof;

9. probable collective redundancies;

10. other matters of interest for the parties.

(4) The management body of the European cooperative society shall submit to the representative body the agenda of its meetings or, if necessary, the agendas of the meetings of the supervisory body, as well as copies of all documents submitted to the general assembly of the shareholders.

(5) Where there are exceptional circumstances affecting the workers and employees’ interests to a considerable extent, such as relocation to another State, transfer, closure of subsidiaries or establishments, or collective redundancies, the representative body - or the elected Standing Committee, if the representative body so decides – shall have the right to seek the holding of a meeting with the management body of the European cooperative society or with another management body in order to get informed and be consulted regarding the measures concerning the workers and employees.

(6) Where the management body decides not to undertake measures in the cases referred to in para. 5, the representative body shall have the right to seek a new meeting for concluding an agreement.

(7) Where the meeting referred to in para. 5 has been organized with the Standing Committee it may also be attended by the members of the representative body representing those workers and employees who have been directly affected by the respective measures.

(8) The meetings held shall not affect the powers of the management body.

(9) Prior to holding a meeting with the management body of the European cooperative society, the representative body or the Standing Committee, as well as the members of the representative body referred to in para. 7, shall have the right to have a meeting without the said body’s representatives being present.

(10) In observance of the provisions set forth in Art. 29, the members of the representative body shall inform the workers and employees’ representatives in the European cooperative society and the subsidiaries and establishments thereof of the content of the submitted information and the outcome of the consultation procedure that has been carried out.

(11) The representative body and the Standing Committee shall be assisted by experts of their choice.

(12) The operating expenses of the representative body shall be borne by the European cooperative society. The latter shall provide the members of the representative body with such financial and material resources as enable them to perform their duties. In particular, it shall meet the cost of organizing meetings and arranging for interpretation facilities and the accommodation and travelling expenses of the members of the representative body and its Standing Committee.

 

 

Standard rules on participation

Art. 27. (1) Where the established European cooperative society has its registered office in the Republic of Bulgaria, the workers and employees in the European cooperative society and its subsidiaries and establishments, as well as the representative body thereof, shall have the right to elect, appoint, or recommend a certain number of members of the management or supervisory body of the Society, this number corresponding to the level of participation in the management prior to the registration of the European cooperative society.

(2) Where the European cooperative society having its registered office in the Republic of Bulgaria is established by way of transformation, those rules regarding the participation of the workers and employees in the management and supervisory bodies which have applied prior to the registration of the Society shall continue to apply after its being established.

(3) The provision set forth in para. 1 shall not apply if prior to the registration of the European cooperative society in the Republic of Bulgaria none of the participating societies has applied any participation rules.

(4) The representative body shall take decisions regarding the allotment of the seats on the management and supervisory bodies among the members representing the workers and employees in different Member States and regarding the way in which the workers and employees may recommend or oppose the membership in the said bodies in accordance with the proportional representation thereof in each Member State.

(5) Should the workers and employees in one or more Member States are not covered by the proportional criterion under para. 4, the representative body shall designate a member from one of these Member States.

(6) Each Member State shall distribute the seats allotted under para. 4 in accordance with its national legislation and/or the well-established national practice.

(7) Each member of the management or supervisory body of the European cooperative society who has been elected, or appointed, or recommended by either the representative body or the workers and employees, shall have the same rights and obligations as the members of the cooperative societies, including the voting rights.

(8) In those cases where Bulgarian legislation has laid down rules that differ from the standard participation rules, they shall not apply.

 

 

Standard rules applicable to informing, consulting and participating in a European cooperative society established exclusively by natural persons or by a single legal person and natural persons

Art. 28. (1) The provisions referred to in Arts. 25 through 27 shall also apply to a European cooperative society having its registered office in the Republic of Bulgaria which has been established exclusively by natural persons or by a single legal person and natural persons which employ at least 50 workers and employees in at least two Member States.

(2) The provisions referred to in Arts. 25 through 27 shall also apply to a European cooperative society having its registered office in the Republic of Bulgaria which has been established exclusively by natural persons or by a single legal person and natural persons which together employ fewer than 50 workers and employees in at least two Member States, if after the registration of the European cooperative society at least one third of the total number of workers and employees in the European cooperative society, including its subsidiaries and establishments, in at least two different Member States request so, or if the total number of workers and employees reaches or exceeds 50 workers and employees in at least two Member States.

(3) Apart from the cases referred to in para. 2, where the European cooperative society has its registered office in the Republic of Bulgaria and has been established exclusively by natural persons or by a single legal person and natural persons which together employ fewer than 50 workers and employees in at least two Member States, it is the provisions of the Labour Code regarding the informing and consulting of the workers and employees that shall apply. The provisions of the Labour Code shall also apply where the subsidiaries and establishments of the European cooperative society are situated inside the territory of the Republic of Bulgaria.

(4) Where the European cooperative society or its subsidiaries and establishments, which have been established exclusively by natural persons or by a single legal person and natural persons and together employ fewer than 50 workers and employees in at least two Member States relocate their registered office from another Member State to the Republic of Bulgaria, the existing rules on the workers and employees’ participation shall continue to apply provided that they are more favourable than the ones established under this Act.

 

Chapter five.
CONFIDENTIAL INFORMATION

Communication of confidential information

Art. 29. (1) Where the disclosure of information may injure the legal interests of the enterprises referred to in Art. 4, paras. 2, 5 or para. 6 and those referred to in Arts. 12 and 20, the communication of information to the European Works Council or the representative body in the European commercial company or the European cooperative society, as well as to the experts designated by them can be carried out under the requirement of confidentiality.

(2) The persons provided with confidential information under para. 1 shall not be entitled to disclose it to other workers and employees or third persons. This obligation shall continue to apply even after the expiry of their terms of office, regardless of their place of employment and the one of the experts designated.

(3) Where the nature of the information referred to in para. 1 may seriously disturb the functioning of the enterprises or companies or societies or be detrimental thereto, the management bodies shall be entitled to refuse to communicate the information on the grounds of an impartial judgement.

(4) Where the communication of information has been refused under para. 3 and a dispute has arisen regarding the reasonableness thereof, the parties shall be entitled to seek help in settling the dispute through the mediation and/or the voluntary arbitration of the National Institute of Reconciliation and Arbitration.

 

 

Responsibility for disclosing confidential information

Art. 30. Those persons who have been provided with information under the requirement of confidentiality shall bear responsibility for the damages caused to the respective enterprises, companies and societies resulting from the nonperformance of the nondisclosure obligation.

 

Additional provisions

§ 1. Within the meaning of this Act:

1. "Member States" means the States which are members of the European Union, and the States which are parties to the Agreement on the European Economic Area.

2. "Multinational enterprise" means any enterprise with at least 1,000 workers and employees within the Member States and at least 150 workers and employees in each of at least two Member States. The number of workers and employees shall be determined on the grounds of their average number for the preceding 24 months, including all the workers and employees who have worked in the enterprise under a labour contract, regardless of the term thereof and the duration of the work time. The information regarding the number of workers and employees must be available to the management body, which creates the conditions and means for the setting up and functioning of a European Works Council or a procedure for informing and consulting the workers and employees, upon the request of the said management body.

3. "Group of enterprises" means a controlling enterprise and its controlled enterprises with the following characteristics of the group: at least 1,000 workers and employees within the Member States, at least two group enterprises in different Member States, and at least two group enterprises with at least 150 workers and employees in two different Member States. The number of workers and employees shall be determined on the grounds of their average number for the preceding 24 months, including all the workers and employees who have worked in the enterprise under a labour contract, regardless of the term thereof and the duration of the work time. The information regarding the number of workers and employees must be available to the management body, which creates the conditions and means for the setting up and functioning of a European Works Council or a procedure for informing and consulting the workers and employees, upon the request of the said management body.

4. "Central Management Body" means the management body of the multinational enterprise or the management body of the controlling enterprise in a group of enterprises.

5. (amend., SG 26/11, in force from 05.06.2011) "Controlling enterprise (undertaking)" means an enterprise (undertaking) which can exercise a dominant influence over the business activity of another enterprise (the controlled enterprise) by virtue of financial participation, ownership, or the rules which govern it, or in any other way. Where the controlled undertaking is a company within the meaning of Article 3, Paragraph 5, item "а" or item "c" of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings, the company participating therein is not regarded as a controlling enterprise.

The ability to exercise a dominant influence shall be presumed, without prejudice to proof to the contrary, where, in relation to another enterprise, directly or indirectly:

а) the said enterprise holds a majority of the subscribed capital of the controlled enterprise, or

b) the said enterprise controls the majority of the votes attached to the share capital emitted by the controlled enterprise, or

c) the said enterprise can appoint more than one half of the members of the management or supervisory body of the controlled enterprise.

Where two or more enterprises belonging to the group satisfy one or more of the criteria laid down in items "а" through "c", the controlling enterprise is the one which can appoint more than one half of the members of the management or supervisory body of the controlled enterprise, until the time another enterprise proves it is able to exercise a dominant influence.

The rights of the controlling enterprise in relation to voting and appointment include the rights of any other controlled enterprise, as well as the rights of any person or body acting on its own behalf or on behalf of the controlled enterprise and at the expense of the controlling enterprise or any other controlled enterprise.

No dominant influence is present where, in exercising its powers, a competent body of the controlling exercise undertakes actions of liquidation, winding up, declaring bankrupt or insolvent, transformation or other similar procedures.

In the cases referred to in Art. 4, paras. 5 and 6 the enterprise having its registered office in the Republic of Bulgaria shall be regarded as a controlling enterprise.

6. "Establishment" means a separate organizational and economic formation.

7. "European commercial company" means a company that has been established in accordance with Regulation 2157/2001/ЕС of the Council.

8. "Participating companies" means those legal persons which participate directly in the setting up of the European commercial company.

9. "European cooperative society" means a society that has been set up in accordance with Regulation 1435/2003/ЕС of the Council.

10. "Participating legal persons" means those legal persons which participate directly in the setting up of the European cooperative society.

11. "Subsidiary" means a controlled enterprise over which another company or a participating legal person exercises a dominant influence regarding its business activity within the meaning of item 5.

12. "Respective subsidiary or establishment" means a subsidiary or establishment of a participating company or a participating legal person to which it has been proposed to become a subsidiary or an establishment of a European commercial company or a European cooperative society when the latter is being set up.

13. "Special Negotiating Body" means the body established in accordance with the procedure set forth in Arts. 6 and 14 or Art. 22 to negotiate with the respective management body.

14. "European Works Council" means the Council established in accordance with either the agreement referred to in Art. 8 or the provisions of the standard rules referred to in Arts. 9 and 10.

15. "Representative body" means the body representing the workers and employees which has been established in accordance with either the agreement under Art. 15 or Art. 23 or the provisions of the standard rules referred to in Art. 17 or Art. 25.

16. "Workers and employees’ representatives" means the representatives of the workers and employees elected or appointed in accordance with national legislation and/or the well-established national practice.

16a. (new – SG 26/11, in force from 05.06.2011) “Transnational matters" shall be considered the issues, where they concern the Community-scale undertaking or Community-scale group of undertakings as a whole, or at least two undertakings or establishments of the undertaking or group situated in two different Member States.

17. (amend. – SG 26/11, in force from 05.06.2011) "Informing" means provision of data by the management bodies under Arts. 4, 12 and 20 of information to the representatives of workers and employees with the purpose to acquaint them with the considered matter and to carry out examination on it. Information shall be provided in such time as appropriate not to slow down the decision making process , and in such fashion and with content, allowing the workers and employees to carry out a profound estimation of the eventual impact of the planned measures as well as if expedient to prepare for consultation with the competent body of the multinational undertaking ot group of undertakings.

18. (amend. – SG 26/11, in force from 05.06.2011)"Consultation" means establishment of dialogue and exchange of opinions between the workers and employees’ representatives and/or their representative body and the respective management bodies referred to in Arts. 4, 12 and 20, or of any other appropriate level of management, in appropriate time, in appropriate fashion and in appropriate content, providing the workers and employees’ representatives with the opportunity, on the ground of the information submitted and without impact on the management liabilities, to express in a reasonable time period their opinion on the proposed measures – subject to consultation, which may be taken into account when decisions are made within the frames of the multinational undertaking or the group of undertakings.

19. "Participation of the workers and employees" means any form of informing, consulting and participating through which the workers and employees’ representatives are able to exercise influence upon the decisions taken by the Company.

20. "Participation" means the possibility of the representative body and/or the workers and employees’ representatives to participate in the business activity of the Company by way of exercising their rights:

а) to elect or appoint part of the members of the management or supervisory bodies of the Company, or

b) to recommend and/or to oppose the membership of certain members of the management or supervisory bodies of the Company.

21. "Reduction of participation rights" is present where the percentage of the members of the bodies of the European commercial company or the European cooperative society referred to in item 20 is lower than the highest existing percentage in the participating companies or legal persons.

 

 

§ 2. (suppl. - SG 93/17) This Act introduces the provisions of Directive 94/45/ЕС of the Council regarding the setting up of a European Works Council or a procedure for informing and consulting the workers and employees in enterprises and groups of enterprises within the Community, Directive 2001/86/ЕС of the Council on supplementing the Statutes of the European commercial company regarding the workers and employees’ participation, and Directive 2003/72/ЕС of the Council on supplementing the Statutes of the European cooperative society regarding the workers and employees’ participation, as well as Art. 2 of the Directive (EU) 2015/1794 of the European Parliament and of the Council of 6 October 2015 amending Directives 2008/94/EC, 2009/38/EC and 2002/14/EC of the European Parliament and of the Council, and Council Directives 98/59/EC and 2001/23/EC, as regards seafarers (OB, L 122/28 of 16 May 2009).

 

 

§ 2a. (new – SG 82/11) (1) Obligations to inform and consult the workers and employees of multinational enterprises and groups of enterprises, arising from this Law, shall not be applied to the agreements envisaged in Art. 8, concluded or amended within the period from 5 June 2009 to 5 June 2011, without impacting provisions with regarding the negotiations in event of structural changes.

(2) In case, that with the elapse of the term of the agreements as per Para 1, parties do not come to a mutual decision to renew or review them, provisions of this Law shall be applied.

 

Concluding provisions

§ 3. The following amendments and supplements are made to the Labour Code (prom., SG, Nos. 26 and 27 of 1986; am., No. 6 of 1988, Nos. 21, 30 and 94 of 1990, Nos. 27, 32 and 104 of 1991, Nos. 23, 26, 88 and 100 of 1992, No. 69 of 1995 - Decision No. 12 of the Constitutional Court of the year 1995; am., No. 87 of 1995, Nos. 2, 12 and 28 of 1996, No. 124 of 1997, No. 22 of 1998, No. 52 of 1998 - Decision No. 11 of the Constitutional Court of the year 1998; am., Nos. 56, 83, 108 and 133 of 1998, Nos. 51, 67 and 110 of 1999, No. 25 of 2001, Nos. 1, 105 and 120 of 2002, Nos. 18, 86 and 95 of 2003, No. 52 of 2004, Nos. 19, 27, 46, 76, 83 and 105 of 2005, Nos. 24, 30 and 48 of 2006):

1. Art. 157:

а) a new item 5а is created in para. 1:

"5а. for the participation in meetings of the Special Negotiating Body, the European Works Council or the representative body in a European commercial company or a European cooperative society;";

b) in para. 3, item 2 the words "item 6" are replaced by "items 5а and 6".

2. A new para. 3 is created in Art. 161:

"(3) An employee who is a member of a representative body in a European commercial company or a European cooperative society shall be entitled to a leave of absence for training needed for the performance of his/her functions. The length of the absence of leave and the remuneration due in the course thereof shall be stipulated either in the collective labour agreement or by an agreement between the parties to the labour relationship."

3. A new item 6 is created in Art. 333, para. 1:

"6. an employee who is a member of a Special Negotiating Body, or a European Works Council, or a representative body in a European commercial company or a European cooperative society for the period of time while he/she performs his/her functions."

4. The following is added after the words "social and community services for the workers and employees" in Art. 404, para. 1, item 1: "and the obligations to inform and consult the workers and employees under the said Code and under the Law on Informing and Consulting the Workers and employees in Multinational Enterprises, Groups of Enterprises and European Companies".

 

 

§ 4. This Act takes effect on the date of entry into force of the Treaty of Accession of the Republic of Bulgaria to the European Union.

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The Law was adopted by the 40th National Assembly on 30 June 2006 and has the official seal of the National Assembly affixed thereto.

 

Additional provisions
TO THE ACT ON AMNDMENT AND SUPPLEMNTATION OF THE ACT ON INFORMING AND CONSULTING WORKERS AND EMPLOYEES IN MULTINATIONAL UNDERTAKINGS, GROUPS OF UNDERTAKINGS AND EUROPEAN COMPANIES

(PROM. – SG 26/11, IN FORCE FROM 05.06.2011)

 

§ 10. This Act shall introduce the requirements laid down in Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (OJ, L 122/28 of 28 May 2009).

 

Concluding provisions
TO THE ACT ON AMNDMENT AND SUPPLEMNTATION OF THE ACT ON INFORMING AND CONSULTING WORKERS AND EMPLOYEES IN MULTINATIONAL UNDERTAKINGS, GROUPS OF UNDERTAKINGS AND EUROPEAN COMPANIES

(PROM. – SG 26/11, IN FORCE FROM 05.06.2011)

 

§ 11. This Act shall enter into force from 5 June 2011.

 

Last edited: 02.07.2018