German-style works committees are being foisted on to British companies through "back door legislation", it was claimed yesterday.
The update Transfer of Undertakings (Protection of Employment) Regulations (TUPE), which came into force yesterday, make it a legal requirement for any company subject to a sale to "inform and consult" with its workforce.
And in cases where staff and hourly-paid workers are neither organised nor members of a trade union, the law demands the election of employee representatives through which information can pass to and from the boardroom.
Ranjit Dhindsa, who heads the employment law team in the Midlands office of international law firm Reed Smith, believes the hidden impact of the measures will be resented by industry and commerce.
"In this country we believe in free markets and individual contracts between employers and employees," she said.
"What we seem to be getting now is collective arrange-ments where we have to inform and consult - the creation of German-style works committees through the back door, by way of different laws and regulations.
"In the last few years we have had legislation relating to statutory trade union recognition, a requirement for collective consultation on large scale redundancies, and the concept of workplace agreements introduced for negotiating - opt outs of the Working Time Regulations, for example.
"EU regulations mean that firms also have to set up works councils when their employees request them. But this latest measure is being forced on them whether the workforce want it or not."
Pointing out that the elections themselves would be costly in terms of cash and management time, she said the revised regulations were an attempt by the Government to bring greater transparency to the sale of businesses, and include special provisions making it easier for insolvent ones to be transferred to new owners.
This element of the package has been cautiously welcomed by Ms Dhindsa.
However she believes the Government may have been too timid in its measures, which are intended to throw light onto to a grey area which has provided buyers with unpleasant surprises in the past.
Under the current regulations, business vendors have no legal requirement to provide buyers with information about their workforce - not even their names and addresses, let alone whether there is any legal action underway, or an industrial dispute simmering in the workplace.
The revised regulations insist on disclosure of the identity of employees, their terms and conditions of employment, disciplinary proceedings, along with grievances and court or tribunal proceedings, amongst other things.
Details must also be given of any collective agreements in existence that will transfer with the change of ownership.
Ms Dhindsa added: "All employee liability information must be notified to the buyer at least two weeks before the transfer, even though by that stage it will almost certainly be of no commercial use."
The new owners would not be allowed to 'cherry pick' workers, no matter how unfavourable their employment records might seem, she said.