The EEF Sheffield Association is warning employers to set up transnational work councils before UK regulations requiring them to do so by law are introduced on 15 December.
Failure to reach agreements by then could lead to companies being taken to court.
The number of British companies covered by the European Union Works Council Directive will at least double. Around 100 UK firms are already subject to the directive’s provisions because of their activities in Europe.
To be covered by the directive, companies must have more than 1,000 employees in the EU, with at least two operations employing 150 people in two separate states.
The works councils will be used for consultation on company strategy and performance – not as wage negotiating bodies. They have to meet at least once a year and must be consulted before any significant changes take place.
The proposed penalty for breaching a council agreement is £75,000, plus £1,000 per day. If agreements are not concluded by the deadline, courts can order companies to set up councils using set frameworks.