Recent Developments November 2017
Transfer of company registered office to other Member States
On 25 October 2017, the Court of Justice of the European Union (the “CJEU”) decided that national laws hindering the transfer of the registered office of a company to another Member State are contrary to the rules of free establishment. In 2013, Polbud, a Polish company, transferred its registered office to Luxembourg and converted to a company under Luxembourg law. However, Polbud could not be removed from the Polish commercial register. Under Polish law, the removal of a company from the commercial register is dependent on the winding-up of the company following a liquidation procedure. The CJEU held that freedom of establishment includes the right of a company formed in accordance with the legislation of one Member State to convert itself into a company under the law of another Member State, even though that company continues conducting its main or entire business in the first Member State. National legislation demanding mandatory liquidation of companies that wish to transfer their registered office to another Member State constitutes a restriction on the freedom of establishment. The fact that the transfer is made for the purpose of enjoying the benefit of more favourable legislation does not, in itself, constitute an abuse.
On 24 October 2017, the Council of the European Union reached an agreement on its position on the new posting of workers directive. The new proposal revises certain elements of the original 1996 Directive. A 'posted worker' is an employee who is sent by his employer to carry out a service in another EU Member State on a temporary basis. The 1996 Directive defines a set of common social rights regarding the terms and conditions of employment for posted workers. These rules establish that posted workers are entitled to a set of 'core' rights in force in the host Member State even though they are still employed by the sending company and therefore subject to the law of that Member State. In March 2016, the European Commission proposed a revision of the 1996 Directive including: (i) remuneration of posted workers in accordance with host member state law and practices; (ii) long-term postings of 12 months that can be extended by 6 months to a total of 18 months; (iii) the application of universally applicable collective agreements to posted workers across all sectors; (iv) equal treatment of temporary agency workers and local workers. Following this agreement, the Council can now start negotiations with the European Parliament to agree on a final version of the revised Directive.
On 24 October 2017, an Advocate General of the CJEU, Mr Y. Bot, delivered his opinion in the case of Wirtschaftsakademie Schleswig-Holstein concerning the privacy of individuals on Facebook pages. The Wirtschaftsakademie provides education and training services via a 'fan page' on Facebook Ireland. Visitors to that fan page were not warned that their personal data were collected by Facebook by means of cookies for so-called 'web-tracking'. When the German data protection authority ordered the Wirtschaftsakademie to comply with data protection rules the latter noted that Facebook was carrying out the data processing. Facebook said it complied with Irish legislation. According to AG Bot, Facebook, together with the Wirtschaftsakademie, must be regarded as the 'controller' of the data. Both Facebook and the Wirtschaftsakademie are jointly responsible for data processing as regards the fan page, as both are involved with the determination of the means and purpose of that data processing. Furthermore, as regards the applicable law, AG Bot pointed out that Data Protection Directive 95/46 does not include the country-of-origin principle so that each Member State may apply its own privacy rules. When a controller has several establishments within the EU, it may therefore be subject to the national data protection laws of multiple Member States. It should be noted that from 25 May 2018, the General Data Protection Regulation (GDPR) will institute a one-stop-shop mechanism whereby cross-border data processing will primarily be subject to the supervision of only one national data protection authority, being the authority for the place where the controller’s main establishment is located. The judgment of the CJEU in this case is expected in the first half of 2018.