Unlike the MitbestG, the SEBG standard rules on employee participation contain only certain basic rules on codetermination and mainly refer to the national codetermination regime(s) that previously governed one or more of the companies participating in the SE formation.
Overall, the SEBG does not abandon the traditional German path of strong employee involvement, but follows a different method to reach this goal.
Under the negotiation rules of the SEBG, the management of the participating companies, theoretically, has no leverage to urge the employee side to consent to anything less than this highest standard of codetermination.
In particular, under SEBG section 36, the distribution of the employee representatives' seats in the administrative organ mirrors the transnational character of the SE.
248) Renegotiation of employee involvement is mandatory only in case of a structural change [strukturelle Veranderung], (249) and, although the SEBG does not define this term, it is generally accepted that a mere increase of the workforce never falls under this definition.
252) Furthermore, if the only purpose of the transaction is escaping codetermination, courts could qualify it as abusive under SEBG section 43 and invalidate it.
In particular, the standard rules on employee participation, SEBG sections 35-38, could lead to mandatory participation of employees in the management of the company.
Neither American nor German law requires a minimum or maximum number of officers or managing directors, and the SEBG neither requires employee representation among the managing directors nor excludes employee representatives from serving in an executive function.
On the basis of the SE-Directive and together with the SEAG, the German legislature enacted the SEBG (supra note 12), which sets out the codetermination framework of the German SE.
See Davies, supra note 43, at 95; Mathias Jacobs, SEBG Vor [section] 1, no.