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In Slovenia, employee involvement is based on Article 75 of the Constitution of 1991 which guarantees workers the right of codetermination. On this basis, the Act on the participation of workers in management (APWM) was passed in 1993, providing a variety of participation rights, individual and collective, including information and consultation rights and board-level participation.
Modern Slovenian company law was largely inspired by the German model, but other European legislation was also taken into consideration. The Slovenian Companies Act opted for a two-tier structure, with a management body and a separate supervisory board. However, discussions are presently going on in Slovenia to allow also the one-tier structure with a single board of directors.
Employees have the right to participate in the supervisory board, if there is one, regardless of whether the company is state-owned or private. According to the Companies Act, a supervisory board is obligatory only in joint-stock companies in any of the following cases:
- if the company’s subscribed capital is above SIT 410 million (approx. EUR 1.7 million);
- if the company employs more than 500 employees;
- if the company has been established progressively (the founders of the company must raise the necessary capital by selling shares);
- if the company’s shares are traded on the stock exchange;
- if the company has more than 100 shareholders.
In practice there are (almost) no joint-stock companies without a supervisory board.
Worker board members are elected – and recalled – by the company’s works council. The persons selected do not have to be company employees. Their number is determined by the company statute, but may not be lower than one-third or higher than one half of all members of the supervisory board. Before 2001, the law even foresaw workers’ representatives making up half the board members for companies with more than 1,000 employees. This rule was judged a breach of the constitutional principle of equality by the Slovenian Constitutional Court, however, and was therefore changed. The chairman of the supervisory board is always a representative of the shareholders and has a casting vote in the event of a tie. Workers’ representatives on the supervisory board have the same rights and duties as the representatives of the owners and participate fully in decision-making.
In addition to representation on the supervisory board, the works council is also entitled to propose a labour director in companies with more than 500 employees. The labour director is a full member of the management board and formally appointed by the supervisory board (or in the absence of a supervisory board, by the shareholders). In companies with fewer than 500 workers a labour director may be appointed by mutual agreement of employer and employees. The labour director represents employees’ interests in human resource management and social matters.
Slovenia has a dual channel system of employee interest representation at company level through works councils (possible in companies with more than 20 employees) on the one hand and trade union representation on the other. These two forms are institutionally and functionally separate: while trade unions have a so-called “conflict function” (collective bargaining, infringement of rights), works councils have rather a “cooperative function” and are not entitled to resort to strike action, for example.
Slovenia – like many other Central and Eastern European Countries – had a period of worker self-management. This communist ideology, which neglected differences between the interests of labour and capital, did not survive the change to a pluralistic, parliamentary democracy. In 1988, the Act on United Labour of 1976 – which regulated worker self-management – was abolished and a new company law was passed.
Theoretically, the Slovenian system of workers’ participation is one of the most advanced in the world, guaranteeing workers a wide range of participation rights. In practice, however, the law has been implemented slowly and infringements of workers’ rights are still numerous, while workers are often unaware of their rights and of enforcement mechanisms. Implementation of the APWM is a facultative possibility and not a duty. This means that a first initiative from the worker side (probably from the trade union) is required to “activate” the participation rights provided by the legislation. This fact also has consequences for the question of board-level participation which is linked to the works council’s right to nominate the worker board members: Where there is no works council there cannot be worker representatives on either the management or the supervisory board.
For recent developments in the Slovenian system of corporate governance and board-level representation click here
Source: The European Company - Prospects for worker board-level participation in the enlarged EU (edited by Norbert Kluge and Michael Stollt). Brussels 2006.
The country reports on board-level participation in the new member states are available in several languages.
Documents
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The introduction of one-tier system in SLOVENIAN company law and implementation of SE directive , Janja Hojnik, Law Faculty of University of Maribor, Slovenia (June 2006)
In Slovenia the government introduced a one-tier system of corporate governance in addition to the existing two-tier system (management board and supervisory board). On the important question of worker representation on the single administrative board a temporary solution was adopted after a long debate. Accordingly, in medium-size and bigger companies a maximum of one-third of the board members are nominated by the works council. With this compromise earlier proposals on the complete abolition of participation in the one-tier system were rejected. The report also provides an overview on the new Slovenian law implementing the SE directive. Download article as pdf
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Planned introduction of a one-tier management: A threat to employee representation at board-level? (Dec. 2005) Janja Bedrac, Law Faculty of University of Maribor, Slovenia
Slovenia is preparing an extensive company law reform. The reform was initiated by the incipient transposition of the Regulation on a European company into national company law. The key novelty of this proposal for an amended Companies Act is the implementation of the right to choose between two-tier and one-tier management for joint-stock companies. This is a genuine novelty because under existing Slovenian law there is no such choice. The Slovenian Association of Works Councils and Trade Union Confederations has expressed strong disapproval. The general view of workers’ representatives is that the enactment of the proposed company legislation would considerably reduce employees’ involvement in companies with a one-tier management system. Their involvement would practically be abolished. Download article as pdf
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Dilemmas arising from the impact on board-level participation rights of the one-tier management system in Slovenia, Janja Bedrač, Law Faculty, University of Maribor (June 2005)
Download article as pdf
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(3) Transposition process
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Slovenia finally implements SE legislation (updated report: June 2006), Janja Hojnik, Law Faculty of University of Maribor, Slovenia (June 2006)
The process of implementing the SE statute in Slovenia began in November 2004, when the Slovenian government confirmed amendments to the Companies Act (amendment ZGD-H). However, in December 2004 the amending law was passed without provisions on the European Company. The reasons for this delay were the change of government and the strong influence of the SE regulation and the SE directive on Slovenian company and industrial relations law. Hence, Slovenia was one of the Member States furthest behind regarding implementation of the SE statute and was warned by the European Commission to speed up the implementation process, receiving an official letter in December 2005. Download report as pdf )
DOCUMENTS:
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The Law Faculty of the University of Maribor has been researching SE legislation within the framework of the research project “Corporation management structure”, chaired by Prof. Dr Marijan Kocbek. Janja Hojnik has researched the SE Directive and published the results in legal journal Podjetje in delo (Nos 3–4/2004, pp. 646–72).
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(5) Other relevant information (Info-Box)
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