The head of the CBI will today (Tuesday) launch a fresh assault on "inappropriate and damaging" EU legislation as the European Commission meets to discuss new rules on consulting workers over cross-border mergers.
In his closing address at the CBI national conference, Digby Jones will say the plan could lead to German-style worker consultation being imposed on British companies.
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.
Digby Jones will say: "Business will engage constructively with Europe, but being pro-European does not mean accepting every damaging idea that emerges from Brussels.
"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 will add: "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.
"That is why it was so reassuring to hear the Prime Minister talk of redefining the EU's approach to social legislation. The message coming loud and clear from this conference and from the political leaders is that this is surely the right way forward.
"I only hope Mr Blair can deliver - knowing what to say to business is not the same as doing the right thing for business."
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. They are set to press ahead, despite opposition from employers across the European Union.
The CBI will urge the UK government to oppose the initiative, arguing that firms should use existing legislation on informing and consulting workers. Only four months ago, the government finalised the UK implementation of the EU Directive on Information and Consultation after extensive talks between the CBI and TUC.
Digby Jones will also highlight other "misguided and inappropriate" pieces of EU legislation including:
- The Working Time Directive - the Commission is considering removing UK workers' right to choose to opt out of the directive, which imposes a 48-hour week
- The proposed Chemicals Directive - this would means firms must test 30,000 substances produced or imported into the EU, making EU products more expensive to produce than non-EU products - the Commission claims this will cost £3.5bn
- The proposed Transparency Directive - this would make companies report to shareholders quarterly instead of twice-yearly as at present.
Digby Jones will say: "The CBI is not against all regulation and it is essential that there are minimum standards in the workplace. But we make no apology for expressing concern when people put forward ideas that hit EU competitiveness and jobs.
"So I say to the EU, we want you to succeed. But you will not find success in one-size-fits-all solutions that take no account of national cultures. You will only harm enterprise - and if you do that you harm the EU.
"Some 12 million people are out of work in Europe - when will Brussels do something to help them? China is eating our lunch and it looks like the Commission is helping them to our dinner as well."