Workers' right to consultation?

Protesters will head to the Marks and Spencer flagship store

By BBC News Online's Orla Ryan

As thousands of trade union members are to converge on Oxford Street on Thursday to protest against the closure of Marks & Spencers' stores on continental Europe, the issue of worker consultation has been pushed onto the political agenda.

Earlier this year, the troubled UK retailer announced that it was to cut over 3,000 jobs in mainland Europe.

We were caught between a rock and a hard place with regards to the process we had to undertake

Marks and Spencer spokesman

But the retailer is now facing an investigation in France, following government criticism over the way in which it told staff they were losing their jobs.

Now unions, including the TUC, want a European rule on staff consultation to become law but UK businesses fear it could cost too much.

So far Labour's Trade Secretary Stephen Byers has been resisting pressure from the unions to incorporate such provisions in the UK law.

"It is very important that we the employees can come to tell Mr Vandevelde ( M&S chairman) that our jobs and lives are worth more than a share price on the stock market

Djamila Zennadi, CGT union

But press reports suggest that if Labour is returned to office it may do a U-turn on the issue.

Both Mr Byers and Tony Blair have been frustrated by the lack of notification when major companies like Rover or steelmaker Corus announced closures.

The Labour manifesto, published on Wednesday, signals a review of domestic legislation.

"When large-scale redundancies are being considered, there is an especially strong case for consultation," it says.

What M&S did wrong

The problem for Marks and Spencer is the way in which they announced the store closures and the timing of the announcements.

The retailer claims it followed the correct procedures under European law by informing workers of the planned store closures half an hour before it made an announcement to the Stock Exchange.

The French authorities say the announcement was too abrupt and left no room for negotiation called for under the country's far-reaching employment protection laws.

According to some reports, store managers were informed of the redundancies by email on the morning of the same day as the extraordinary meeting. Half an hour after receiving the email, they had to tell the staff and open the store.

Under these laws, unions and works committees need to be consulted before any major decision can be taken.

French premier Lionel Jospin has called for Marks and Spencer to be punished. Such a call highlights the extent to which the political temperature across Europe varies.

Rocks and hard places

Marks and Spencer is trying to distance itself from the rally, pointing out that only a minority of protesters will be its employees.

"We feel we respected the laws in each affected country and continue to believe we acted in the best possible way given needs of people and conflicting regulatory legal processes. It is very hard to communicate to 3,000 people," a Marks and Spencer spokesman told BBC News Online.

"We were caught between a rock and a hard place with regards to the process we had to undertake. We believe we acted in accordance with the legal requirements and also within the requirements of the London Stock Exchange," he added.

Directive

Part of the problem is that different laws on worker consultation exist across Europe, a situation that the European Commission is seeking to rectify.

In fact, the UK and Ireland are the only countries in Europe that don't "have a statutory system of employee information and consultation", Sally Murollo, editor of IDS Employment Europe said.

A draft directive was drawn up when Renault controversially closed its Vilvoorde plant in Belgium.

This requires companies with 50 or more workers to inform and consult their workers about decisions affecting them, including redundancy.

Staff would have to be consulted "with a view to reaching agreement...on decisions likely to lead to substantial changes in work organisation or in contractual relations."

The UK, Ireland, Germany and Denmark have long opposed its introduction.

IDS Employment Europe's Murollo added: "The opposition countries are crumbling. The M&S rally is a political pressure point."

The UK is now thought to be the sole objector, which is up for discussion at the Social Affairs Council on 11 June, a few days after the election.

European split

The political temperature across Europe does vary tremendously.

In France, employment Minister Elisabeth Guigou proposed a raft of measures to tighten redundancy legislation following news of jobs losses. These include Marks and Spencer, as well as Danone, Moulinex-Brandt and Philips.

In the UK, business leaders argue that existing law is sufficient.

"Employers must consult representatives of all people affected by proposed dismissals well in advance of them taking effect - at least 30 days before the first dismissal where 20 or more employees are involved, and at least 90 where 100 or more employees are involved," a CBI statement said. It added that the proposals are not presented as a fait accompli.

Unions disagree.

"At Vauxhall workers heard about it on the one o clock news," a TUC spokeswoman said. "It is involving them in the decisions, it is in theory giving the employees the chance to make suggestions about other alternatives rather than closure," she said.

A spokesman for the British Chambers of Commerce said: "Lets look at where we can define best practice rather than immediately regulate....We should be looking for alternatives in order to support competitiveness in firms of all sizes."

The Department of Trade and Industry is currently working with the BCC and the CBI to compile examples of best practice.