EC set to impose works councils

MANY LARGE British companies are likely to have new EC labour relations laws imposed on them regardless of the wishes of the Government or Britain's exclusion from the social provisions of the Maastricht treaty.

The realisation that John Major's opt-out from the treaty is seriously limited is likely to fuel calls from Conservative MPs to torpedo the treaty, with or without the Social Chapter. Gillian Shephard, Secretary of State for Employment, yesterday rejected an EC measure which would help workers in Europe to be better informed about decisions taken by multinational companies.

The European Works Council directive would set up consultative bodies for businesses that employ 1,000 employees in the EC, and at least 100 employees in two member states. The works councils would enforce consultation on issues that affect the workforce, though not pay.

According to a study by the Industrial Relations Research Unit at Warwick University, more than half the companies that would be affected are British - some 257 companies. But so intent are the other European countries on pursuing the matter that they are likely to go ahead with or without Britain once the Maastricht treaty is ratified.

The UK would have no vote on the issue, even though many British companies and those from overseas with operations in Britain would still be affected. This is because many of the transnationals have operations in two or more EC states apart from Britain.

One EC minister said Britain was talking tough on EC social affairs legislation, but was privately trying to get measures watered down so that as little as possible went through under the Maastricht rules.