Bosses bemoan new EU rules

The EU fears companies don't consult their staff enough

French industrialists have written an open letter to Prime Minister Lionel Jospin, complaining about the latest European directive on workers' rights.

The European Union's "Information and Consultation Directive' requires employers to consult their staff before major decisions.

Trade unions have welcomed the legislation, but employers argue it will hamper important decisions.

Chief executives from companies such as Peugeot, Totalfina Elf and Galeries Lafayette were among the 50 executives who wrote to Prime Minister Jospin.

"The [French] law is quite rigid already on the layoffs and the project of the government is to make it much tougher," BNP Paribas's chief economist Dominic Barbet told the BBC's World Business Report.

"Obviously it results in lower flexibility and this may have quite considerable consequences."

"It is very difficult to disseminate that information in a company which has thousands of workers without creating the risk of insider trading," Barbet added.

European rubber stamp

Most companies around the European Union are already required by national law to consult their employees before making major changes that could affect them.

Some, like Britain and Ireland, have little specific legislation in this area at all.

The plans - approved by the European parliament on Tuesday - are an attempt to create common rules as more companies in the EU set up operations across national borders.

The approvals come despite attempts by the British and Irish governments to block the proposals, on the grounds that they are too inflexible.

MEPs hope the legislation will get final approval from member states by the end of the year, but members of the European Parliament are pushing for even tougher extra measures.