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Tuesday, 12 June, 2001, 16:35 GMT 17:35 UK
Q&A: EU labour directive
Workers leaving factory
Workers will have a say in management decisions
European Union employment and social affairs ministers have agreed a directive that forces companies to consult their workers on key decisions. BBC News Online looks at what this means for Europe's businesses and employees.

What is the directive, and is it already law?

The directive still has to be formally approved by the heads of governments of the EU's 15 member. Once in place, the law would require companies operating in the EU to inform employees about any decision affecting their jobs - notably those which could lead to redundancies.

Firms employing 50 workers or more would also have to inform employees of their financial and economic situation.

Does this mean I can walk up to my boss and ask him to see the company's accounts?

Companies will find this really difficult to swallow. They will see it as a step in the wrong direction that could undermine the ability of managers to manage."

CBI deputy chief John Cridland
No, not really. Even in Germany, where employees enjoy Europe's strongest "co-determination" laws, workers rights don't go that far.

At the moment the final details of the directive still have to be negotiated, but access to company accounts will probably be limited to representatives elected by the employees.

And when will the new rights be introduced?

The UK and Ireland would be given seven years to implement certain aspects of the new directive, once it becomes EU law. Other EU states have just three years to comply, but not every company will be hit at the same time.

Firms with more than 150 employees will have to set up formal consultation procedures in three years. Those with more than 100 will be affected in five years and those employing more than 50 will have to consult with their "workers' councils" in seven years.

The Commission will press for heavy fines for companies that do not consult. The worst offenders could have redundancy plans declared void.

Are there not already such laws in some countries?

About 40,000 companies will be affected, but 99% of businesses will not be involved because they only employ small numbers of people.

UK Department of Trade and Industry
Worker consultation laws already exist in France, but had been opposed by Britain and Ireland where flexible labour markets help attract large flows of foreign direction investment.

In Germany there has been "co-determination" since the country rebuilt its shattered economy after the second world war.

Why did 'worker's consultation' pop up on the agenda now?

In the wake of the controversial jobs cuts by retailer Marks and Spencer, food giant Danone, electrical goods maker Moulinex and French airline AOM, France wanted to introduce tougher labour laws across the whole of Europe.

In Germany, meanwhile, the centre-left coalition recently agreed on a plan to strengthen workers' representatives in corporate management decisions.

Workers rights are a key point on the EU's 'social agenda', which is one of the pillars of the union's common policy.

How have industry leaders and the unions responded?

The UK's acceptance is sure to add fuel to the controversy surrounding Britain's role in Europe, which has flared up since the landslide re-election of the Labour government last week.

We welcome the climbdown by the UK government, but the phasing will result in some workers having to wait far too long for protection

John Monks, TUC General Secretary
British companies in particular have been lobbying hard for less red tape on the labour markets. Acceptance of the directive by the Labour government drew an angry response from business leaders.

Unions however, welcomed the move. They had mounted a campaign for tougher laws since last year's problems at Corus, Rover, Ford and Vauxhall.

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See also:

11 Jun 01 | Business
EU agrees on workers' consultation
08 Jun 01 | Business
UK's new trade and industry minister
10 Jun 01 | Business
Labour's business prospects
24 Apr 01 | Europe
France tightens employment laws
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