French Commercial code
In forceI. - In companies which employ, at the close of two consecutive financial years, at least one thousand permanent employees in the company and its direct or indirect subsidiaries whose registered office is located in France, or at least five thousand permanent employees in the company and its direct or indirect subsidiaries whose registered office is located in France and abroad, it is stipulated in the Articles of Association that the Supervisory Board shall comprise, in addition to the members whose number and method of appointment are provided for in Articles L. 225-69 and L. 225-75 of this code, members representing employees.
A company whose principal activity is to acquire and manage subsidiaries and holdings may not implement the obligation provided for in the first paragraph of this I if it meets each of the following conditions:
1° It is not subject to the obligation to set up a social and economic committee pursuant to Article L. 2311-2 of the Labour Code;
2° It owns one or more direct or indirect subsidiaries subject to the obligation set out in the first paragraph of this I.
A company is not subject to the obligation provided for in the first two paragraphs of this I if it is the direct or indirect subsidiary of a company which is itself subject to this obligation.
II. - The number of Supervisory Board members representing employees is at least equal to two in companies where the number of members appointed in accordance with the procedures mentioned in Article L. 225-75 is greater than eight and at least one if it is equal to or less than eight.
The members of the Supervisory Board representing the employees are not taken into account either for the determination of the minimum and maximum number of members of the Supervisory Board provided for in Article L. 225-69, nor for the application of the first paragraph of article L. 225-69-1.
The election of directors representing employees on the basis of 1° of III of this article respects parity in accordance with article L. 225-28. Where two directors are appointed on the basis of 2° of the same III, the group committee, central works council or works council shall appoint one woman and one man.
III. - Within six months of the end of the second of the two financial years referred to in I, after receiving the opinion of the group works council, the central works council or the works council, as applicable, the extraordinary general meeting shall amend the articles of association to determine the conditions under which the members of the supervisory board representing the employees are appointed, in one of the following ways:
1° The organisation of an election among the employees of the company and its direct or indirect subsidiaries whose registered office is located on French territory under the conditions set out in l'article L. 225-28;
2° The appointment, as the case may be, by the group committee provided for in article L. 2331-1 of the Labour Code, the central works council or the works council of the company mentioned in I of this article;
3° The appointment by the trade union organisation having obtained the most votes in the first round of the elections mentioned in articles L. 2122-1 and L. 2122-4 of the French Labour Code in the company and its direct or indirect subsidiaries, whose registered office is located on French territory when a single member is to be appointed, or by each of the two trade union organisations having obtained the most votes in the first round of these elections when two members are to be appointed ;
4° Where at least two members are to be appointed, the appointment of one of the members in accordance with one of the procedures set out in 1° to 3° and of the other by the European Works Council, if it exists, or, for European companies within the meaning of article L. 2351-1 of the French Labour Code, by the employee representative body referred to in article L. 2352-16 of the same code or, failing that, by the European Company Committee mentioned in article L. 2353-1 of the said code.
The election or appointment of the members of the supervisory board representing the employees takes place within six months of the amendment of the articles of association provided for in the first paragraph of this III.
IV. - If the Extraordinary General Meeting has not been held within the period provided for in the first paragraph of III, any employee may request the president of the court ruling in summary proceedings to enjoin the Management Board, under penalty, to convene an Extraordinary General Meeting and to submit to it draft resolutions to amend the Articles of Association in the manner provided for in the same III.
If the Articles of Association have not been amended by the end of the period provided for in the first paragraph of said III, the members of the Supervisory Board representing the employees shall be appointed by means of the election referred to in 1° of III within six months of the expiry of the same period. Any employee may ask the president of the court ruling in summary proceedings to enjoin the company to organise the election, subject to a fine.
V. - Companies meeting the criteria set out in I of this article or in article L. 22-10-24 and whose supervisory board includes one or more members appointed pursuant to Article L. 225-79 of this Code or I of Article 7 of Ordinance n° 2014-948 of 20 August 2014 relating to the governance of and transactions in the capital of companies with public shareholdings, as well as their direct or indirect subsidiaries, are not subject to the obligation provided for in I to III of this article provided that the number of such directors is at least equal to the number provided for in II.
Where the number of such members is less than the number provided for in II, I to IV shall apply upon expiry of the current term of office of the members of the supervisory board representing the employees.
