Bosses should not fear directive

The UK may have fought hard to resist it but after being snookered by other European Union nations, ministers will soon have to begin implementing a consultation and information directive.

There will be no opt-outs or special phasing-in periods as had been aimed for.

Instead there will be a quick start – within two years of Europe enacting the directive – of the regulation that forces all companies with more than 50 employees to consult their workers over large-scale redundancies and strategy. After a vote of endorsement last month, that enactment could be completed by the end of this year.

Despite the controversy over poor consultation from BMW when it wanted to jettison Rover and similar industrial shocks, the government had sought to water down the directive to curb regulatory demands on business. It also said the directive would be a culture shock for the UK, which, unlike Germany and some other countries, has no tradition of consultation.

Great opportunity

And another fear, unspoken by politicians but raised vociferously by some business leaders, was that the directive would increase the powers of trade unions. Certainly most unions see great opportunity in the directive, believing it could be the most important boost for growth in membership and influence for many years.

Unions have largely changed their tune on consultative arrangements. It is not that long ago that such procedures were frowned upon by UK unions. They believed that they caused relationships between managers and union representatives to be far too cosy and that they undermined collective bargaining.

Times have changed for both sides though. There is generally less collective bargaining, certainly on a national scale, and partnership has become a buzzword in employment relations even if it does not always amount to a hill of beans and can be more PR than partnership. Many larger companies like to be seen to have dialogue with unions and other ‘stakeholding’ groups.

Deep scepticism

But smaller ones often remain sceptical, especially those who were in business during the darker days of the UK’s industrial relations. Adair Turner, the former director-general of the CBI, told a recent union-sponsored meeting on consultation and information that many small engineering companies in the West Midlands would look upon him with deep suspicion if he spoke of consultation and information with any degree of positivity. They remembered the 1970s and thought this was a quick route back.

Of course unions have changed their agenda since those days, and competitiveness and productivity are as much their concern in a global market as they are the concern of managers.

But smaller companies, which do not legally have to recognise unions, may not be fully aware of this.

The business fear is that the potential to politicise industrial strategy and decisions such as large-scale redundancies will stunt economic growth.

But rather than resist the directive, even if they are small enough to do so, business could maybe see some opportunity in it. Some argue that if employees are properly informed and consulted by managers then they feel no need for union protection. It will be interesting to see which way things go.

Christine Buckley is industrial editor of The Times