Labour forced to give in on rights for workers

British workers threatened by large-scale redundancies are to be given new rights as part of major labour reforms drawn up by the Government under pressure from Europe and the trade unions.

British workers threatened by large-scale redundancies are to be given new rights as part of major labour reforms drawn up by the Government under pressure from Europe and the trade unions.

Under the proposals, employees whose jobs are threatened by sell-offs or mergers will have a statutory right to consultation enshrined in UK law.

Ministers are preparing to include the pledge in the Labour manifesto for the next general election as a home-grown alternative to more radical European plans to boost union rights.

The proposals follow the Government's concern at BMW's handling of the sale of its Rover plant at Longbridge earlier this year, when thousands of car workers' jobs hung in the balance for weeks.

By offering a major new piece of workplace legislation at the next election, ministers hope to meet union demands for a flagship policy that will enthuse traditional Labour voters in its "heartlands" areas.

The UK will come under pressure from the French presidency of the European Union to sign up to an EU directive on employee consultation. Under the European plan, works councils have to be created to give unions a regular right to consultation about wide-ranging aspects of a company's business. But both Tony Blair and Stephen Byers, the Secretary of State for Trade and Industry, believe the EU plans are too costly, bureaucratic and will impose a great burden on small businesses.

Instead of signing the directive, Mr Byers has agreed to draw up UK-specific legislation that will allow staff a more effective method of consultation and that will be restricted to redundancy or merger threats. The Labour Party conference in September will call on the Government to review the law to see if workers should be given the right to consultation.

The move, which followspressure from the trade unions, will be included in the party's manifesto at the next general election. The review would be launched soon afterwards if the party were to win a second term. "We do not believe workers should find out they have lost their jobs by reading it in a newspaper or watching a news bulletin," a government source said. "But we don't believe this should come from Europe. The EU directive would impose too many burdens, particularly on small business."

A minister added: "We will not sign up to a directive that would force directors to sit down with union committees every week or so. It's too rigid and bureaucratic."

John Monks, general secretary of the Trades Union Congress, said the move was being prepared because of pressure to sign up to a new European directive on workers' rights, and fears of "lost ground" in Labour's heartlands.

The TUC wants the Government to back the directive, which would oblige all firms employing at least 50 people to consult over developments where employment "may be under threat", and over issues such as skills training. The prospects for the directive succeeding are finely balanced, with the position of Germany being pivotal.

With France holding the EU's rotating presidency, there are likely to be moves to toughen social protection across Europe. Paris has said it will push a directive on informing and consulting employees, despite opposition from the UK.

Mr Monks said thought was being given by some ministers to "a fallback position" that would oblige companies to consult and provide information about possible redundancies.

"The way BMW behaved was a jolt to the government position," he said. "They simply did not know before the company made its announcement." The company had been "surprised to find there was no obligation to inform and consult in advance". Under EU law, companies must consult their workforce if they intend to make more than 20 people redundant, but not if they plan to sell a plant to another employer who is likely to shed workers.