Politics: Brussels imposes tough new rules for employers

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Firms may be forced to reinstate workers laid off without consultation in the event of company closures, writes Katherine Butler in Brussels.

British employers who fail to consult staff in advance of closure decisions would be forced to reinstate any workers they laid off under controversial new social chapter rules which the European Commission will unveil today.

The proposals, aimed at small and medium-sized companies, will apply to Britain if a majority of European Union governments approve them.

The UK relinquished its opt-out from the social chapter after the Government's acceptance of the Amsterdam Treaty signed by Tony Blair and other heads of government in June.

European Commissioners meeting in Brussels today are expected to call on employers groups and trade unions to open negotiations on the content of the new measures. The aim is to extend an existing law requiring multinational corporations to keep their workforces consulted, to small companies operating nationally.

The two sides of industry will be given nine months to agree terms, for example, the size of company to fall within the scope of the legislation. But if as is likely they fail, the Commission's own version will go forward to governments to become law.

Padraig Flynn, the EU social affairs commissioner, said: "The right to information and consultation is sometimes called into question because of the weakness of sanctions applied in the event of the right being breached. This is why we need to establish binding rules at European level." He is calling in particular for "effective sanctions of a proportional and dissuasive nature" to be applied wherever the workers' right to advance consultation is flouted.

Britain and Ireland are the only EU countries which impose no statutory obligation to consult workers on corporate decisions or closure plans.

l The European Parliament's rules committee meets today to decide whether an internal Labour Party "gagging order" which has led to disciplinary action against four rebel Labour Euro-MPs is legal.

This follows an inquiry by the parliament's Spanish president into complaints by Ken Coates, Hugh Kerr, Alex Falconer and Michael Hindley that a code of practice forbidding open criticism of government policy is a breach of Strasbourg regulations on the independence of MEPs. The four rebels were told last night that they face suspension terms of six to 12 months over their failure to sign up to the code of practice.