The EU parliament and the individual member governments have reached an agreement on new directives which will compel companies to increase consultation with their workforces. Negotiation has taken three years already, and the legislation will be generally enacted in three years’ time, except in some countries (including the UK) where there is little tradition of statutory workforce consultation. In these countries smaller companies will have another three years to comply.

The legislation demands that employers consult on significant developments in structure, contracts, or the organisation of work, and there is also a directive to keep workers informed of the financial situation, within bounds of necessary confidentiality (to be established). However, no fixed penalties have been set up for companies who fail to comply, and the proposal to allow employees to impose delays on changes in comapnies has been dropped.

The CBI have congratulated the UK government on achieving this compromise. Deputy director-general John Cridland said: “We oppose EU intervention in national rules on employee involvement as a matter of principle. But we recognise that ministers have negotiated the least damaging deal available.

“It is important that the directive is now implemented in a way that helps rather than hinders genuine employee involvement.”