CBI slams EU's 'damaging' business legislation

The head of the CBI, Digby Jones, has attacked "inappropriate and damaging" EU legislation today ahead of the European Commission meeting to discuss new rules on consulting workers over cross-border mergers.

In his closing address at the CBI national conference, Mr Jones said that the plan could lead to "German-style worker consultation" being imposed on British companies.

The CBI said that the proposed directive would require a company to adopt the "most restrictive consultation practices" operating in the two merging organisations. This could put employee representatives on UK company boards, giving them an effective veto over management decisions, the organisation said.

"Business will engage constructively with Europe, but being pro-European does not mean accepting every damaging idea that emerges from Brussels," Mr Jones said.

"This latest proposal on cross-border mergers is a classic example of how the European Commission fails to understand how business operates in the 21st century globalised economy. It will prevent managers structuring organisations in the best way for the business. And here we go again: rules that show Brussels is simply not in touch with the way the world has changed."

He added: "We must be positive about the EU and we will never play on irrational prejudice. But if the EU gets a bad press, well perhaps sometimes it deserves it. British business will not - and the UK must not - roll over."

European Commissioners, meeting in Strasbourg today, are likely to agree the new restrictions as part of the draft 10th Company Law Directive on cross-border mergers.

The CBI will urge the UK government to oppose the initiative, arguing that firms should use existing legislation on informing and consulting workers.

Among other "misguided and inappropriate" EU legislation, Mr Jones highlighted the Working Time Directive, the proposed Chemicals Directive, and the proposed Transparency Directive.

(gmcg)