EU may force firms to consult before lay-offs

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The Independent Online

Britain could today lose its long-running battle to stop a fresh EU law from forcing large and medium-sized companies to inform and consult their workers before making mass redundancies.

The Government had managed to put off talks with its EU partners on the proposed directive, which has been fiercely opposed by Britain and Ireland, until after the general election. But the issue is on the agenda for a meeting of social affairs ministers in Luxembourg today.

Under the planned new rules, companies with more than 50 workers would be required to discuss their plans with staff before making large lay-offs. The Confederation of British Industry (CBI) argues that this would impose a burden on companies. However, trade unions seem to be enthusiastic.

A compromise paper was being drafted yesterday by the Swedish government, which currently holds the rotating chair of the EU presidency. This would phase in the laws, applying them initially to firms with 150 workers then, over a number of years, to those employing 100 and then 50.

But the Government knows it could be outvoted, because the proposed new laws can be decided by a large enough majority of EU countries.

British companies are technically already expected to consult on redundancies even if they have as few as 20 employees, if 10 are to lose their jobs. However, it is difficult for workers to get redress and the proposed tightening-up of the law could make it easier for companies to be punished for failing to consult workers. Their redundancy plans could be frozen; alternatively they could be forced to pay out greater compensation.

The Government may try to water down the sanctions, and it is likely to have some allies at today's Luxembourg meeting. The European Commission also wants a continuous dialogue between firms and their workers, and it says this could be done by e-mail if both sides can agree.