Britain has fewest laws on employee consultation: Michael Portillo's opposition to works councils is mirrored by UK firms. Barrie Clement reports

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The Independent Online
MORE than 20 European multinational companies already have employee works councils, but they are overwhelmingly based in Germany or France.

Of the most developed members of the European Union, Britain has the fewest laws governing the consultation of employees. British regulations are largely restricted to the responsibility of issuing 90 days' notice of large- scale redundancies. British companies harbour strong suspicions about formal forums dictated by Europe even though the rights of such groups are strictly circumscribed.

Employers' organisations in Britain have backed the Government all the way in opposing the directive. The CBI believes the imposition of such structures is 'unnecessary and inflexible'.

Under the proposed law, however, they would have rights limited to the supply of information and consultation. The competence of most of the voluntary organisations already established for European multinationals are similarly restricted. The formality of the arrangements vary from documented agreements - in more than a dozen companies - to a verbal deal at one company.

The growth of the organisations in Continental Europe has been based largely on legislation rather than bilateral deals between workers and management.

The principal model evolved in Germany, where legislation was introduced after the Second World War aimed at developing a consensus between labour and capital. Even in Germany works councils have powers to delay decisions rather than veto them.

The CBI argues that consultation processes are best introduced and organised by companies themselves without outside interference. Confederation officials point out that Europe is losing market share because of high 'non-wage' costs of which works councils and their decisions are an element.

The Institute of Directors believes that works councils in Germany have contributed to the demise of companies requiring 'restructuring'.