Companies to ignore UK opt-out

British firms operating in mainland Europe are quietly signing up for the Social Chapter. Barrie Clement reports
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OVER the next nine months more than 100 of the country's biggest companies are expected to ignore a key element of the Government's European policy.

While the hard-won opt-out from the Social Chapter of the Maastricht Treaty allows multinationals to exclude British employees from their ideologically unsound European Works Councils, few and possibly none, are expected to do so.

Management, however, will not be flouting government wishes out of a sudden conversion to Continental ideas of social partnership and industrial democracy. It is simply a question of self-interest.

If the businesses covered by the directive have not voluntarily agreed an information and consultative structure for employees by 22 September 1996, they will be forced to go to the negotiating table. Brussels will dictate the format of such talks and who attends them. Companies will have to ensure for instance, that staff participants are legitimate representatives of employees. Most firms will probably seek to avoid such interference and will attempt to set up works councils before negotiations are thrust upon them.

Independent research group Industrial Relations Services argues that the opt-out will be of "limited application" to the UK.

In the first edition of its European Works Council bulletin, IRS reports a TUC estimate that that 3 million British workers could eventually be covered by councils, whether employed by UK firms or by foreign multinationals with British subsidiaries.

Behind the scenes, lawyers and management consultants are advising British firms to press ahead now to avoid potential litigation from unions.

Multinationals have three years from next September to come to an arrangement. If they do not, their standard negotiating procedures will be substituted by a prescribed "all singing and dancing" works council mechanism dictated by Brussels.

It is estimated that between 100 and 150 UK-based multinationals are affected by the directive. The European law insists that all those with 1,000 employees in the 15 European Union states with at least 150 employees in each of two countries must set up the machinery if requested by their workers.

The Engineering Employers' Federation, the largest sectoral employers' group, which originally lobbied against the council system, reports that all 66 of its UK-based members who qualify, are "actively considering" the establishment of structures. Not one of them has appeared keen to exclude British workers, according to Peter Reid, the federation's expert in the field. Last week, the EEF embarked on a nationwide "roadshow" to explain the law to its members.

Senior managers, it seems, have accepted it will be more trouble than it is worth to exclude UK workers.

Continental trade unionists have said they are willing to aid their British colleagues by refusing to sign voluntary deals unless UK workers are included.

Clearly it has not been a Pauline conversion for employers. The Euro- sceptical CBI remains opposed to them but is also well aware of the legal practicalities.

The dozen or so British companies that have already established works councils, such as Coats Viyella, GKN, ICI and NatWest, have all included UK workers.

The first Brit- ish business to set up a council was United Biscuits. Both the company's management and the GMB general union agree that its first meeting last spring was extremely useful. Mike Wilkinson, UB's head of human resources, who chairs the council, said that while it had experienced "ups and downs", the tone of the first session was constructive and the questions posed by employees were "professional".

Senior directors used the opportunity to spell out the "commercial realities" faced by the business.

"If they understand what leads to a decision, they are less likely to fight you on principle," he said.

It was also a chance for some of the company's most senior executives to listen to employees at first hand without the "filtration mechanism" - going through unions and middle management.

David Williams, a national officer of the GMB who is a member of the council, described the first meeting as "very, very successful", with much open discussion about the company's opportunities and problems.

Mr Williams believes the council is unlikely to take over collective bargaining on pay and employment conditions, which will remain at national or plant level. He argues, however, that British unions could use the councils to win concessions on such issues as equal opportunities, which are covered by Brtiain's Maastricht opt-out. "It could be the Social Chapter by the back door."

There is no doubt that the councils provide a way back for unions, still suffering from their pounding during the Thatcher years. A recent study by the Lab-our Research Department show- ed that unions dominate councils.

In the latest issue of its Bargaining Report, the union-funded LRD comments: "This not only means the UK opt-out is being ignored by major companies, it also shows that the traditional UK system of representation - through unions - is being maintained in these European-wide bodies."

At four companies - BP Oil, BP Chemicals, Marks and Spencer and ICL - there is no guaranteed union representation, but the validity of that is being challenged.

Most British companies are reluctant heroes as far as the works council legislation is concerned so expect a flurry of last- minute negotiations as the September deadline approaches.Union leaders dealing with particularly awkward companies might even prefer to see management sweat so that Brussels will have to intervene.