BP faces legal challenge over works council

Sir David Simon, the Europhile chairman of BP, faces a legal challenge over his company's policy towards a key element of European employment legislation.

The European Works Council established by BP is threatened with court action over allegations that it fails to measure up to the democratic standards required under the directive.

Unions on the Continent contend that the council, set up 18 months ago, includes management appointees as worker representatives and therefore infringes the law. The litigation is to be launched after 22 September when employees' leaders are allowed to challenge any works council which they believe breaches European statute.

The case could take on the importance of a cause celebre because of the involvement of one of Britain's most prominent blue-chip companies.

All employers with more than 1,000 workers within the EU and more than 100 workers in two EU countries are compelled to set up a pan-European structure for consulting and informing their employees.

The Maastricht opt-out means companies do not have to count British workers in deciding whether they qualify and UK staff have no right to be represented on the councils. The overwhelming majority of companies, British and foreign, are, however, ignoring the opt-out.

Sir David, who has been identified with a more pro-European stance than many of his business colleagues, is accused of being "selective" in his approach to the EU. He was a member of the European Commission's competitiveness advisory group, made up of business people and trade unionists, which said that the completion of the internal market was an absolute priority to enhance competitiveness. Sir David has declared his support in principle for monetary union.

Franco Bisegna, of the European Mine, Chemical and Energy Workers' Federation, alleged however that BP had established a European Works Council without adopting the proper procedures.

Unions on the Continent - which are recognised by BP for collective bargaining and are therefore seen as legitimate organisations for representing employees - should have been involved in setting up the framework, Mr Bisegna argued.

"Delegates were confronted with an agreement and they were simply expected to sign. It's a very poor agreement which doesn't meet the minimum requirements and we intend to challenge it," Mr Bisegna said.

A spokesman for BP said the structure had been based on existing national works councils and employee forums. National representatives were properly consulted over the council.

"We believe the system we've got in place meets the letter of the law and its spirit," he said. There was no need to involve unions directly in the process. "Some of the representatives may be union members, others won't."

Many of the British companies covered by the directive are still negotiating with employees and unions to establish a "voluntary" works council before 22 September.

After that date any company which has failed to establish a works council - or has set up a structure which fails to meet the requirements - will be forced to co-operate with a special negotiating body. The works council resulting from such talks will be prescribed in detail by European legislation.