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EU to foist works councils on Britain

The British Trades Union Congress has calculated that more than half of the country's leading firms will have to implement rules laid down by the European Union and consult employees on company strategy, despite Britain's opt-out from the Maastricht treaty's Social Chapter.

The TUC said yesterday that according to its calculations, 59 of the top UK-100 firms would be affected by the EU directive on works councils, which is likely to become law in October. Employers have long criticised the proposals as unnecessary and expensive burdens on industry. But some companies already run consultation schemes, which are common throughout Europe and in some countries, notably Germany, are at the heart of national industrial policy.

The proposed law has been fiercely argued and the format now broadly agreed is a much watered-down version of the original proposal. It prescribes the setting up of worker-representative committees in companies employing more than 1,000 people - more than 100 in at least two EU member states.

Britain will not have to put the law on the statute book because of the Maastricht opt- out, but UK companies operating in mainland Europe will be affected and many transnational companies, responding to union pressure, will probably make the consultation rules common to their entire European business network. But employees of multinationals in the UK are not included in calculating the 1,000-employee threshold, and pan-European companies are not required to invite UK employees to participate in councils.

The issue will be debated by social affairs ministers on 22 June and if agreed will become law at the first meeting of social affairs ministers, to be held under the German presidency in October.

The works council directive is of crucial interest to Germany, where industrial policy is underpinned by the consultation system.