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Work councils `a must' for 300 UK companies

More than 300 British companies will be forced to set up works councils under European law, according to a survey by Coopers & Lybrand, the management consultants.

Coopers reports that the figure of 100 or so companies originally thought to be covered by the legislation may be a considerable under-estimate. Tim Johnson, employment law specialist, advised British businesses to include UK employees in works councils despite the Government's opt-out of European social legislation.

"It makes no sense at all to leave them out. British companies won't achieve anything by doing so," Mr Johnson said. Excluding British workers simply meant that they would get information second-hand.

The European directive applies to all companies with more than 1,000 employees and with more than 150 in at least two European Union countries. The law comes into force in September, after which companies have three years to complete agreements or face the possibility of punitive measures.

Mr Johnson advised companies to set up voluntary systems to consult employees before the legislation came into force.

The study found works councils were cheaper to run than feared and that there were several benefits for management.