A European directive on employee consultation during takeovers could result in more red tape for UK employers.
Companies would have to consult staff or their representatives as soon as a takeover bid is made public under the new regulations and provide them with copies of the offer document.
The takeover directive is currently being agreed by the European Parliament and, if it becomes law, will affect all listed companies within two to four years.
The companies involved in mergers must also inform all employees whether the takeover will alter their terms and conditions of employment.
Governments will have to draw up new regulations to ensure companies obey the information and consultation guidelines.
Robbie Gilbert, chief executive of the Employers’ Forum on Statute and Practice, said, “This will be a fresh round of red tape for employers and is much closer to becoming law than the information directive.”
Gilbert said that few employers knew about the directive because it was introduced in a sub-section of the EU Company Law Directive.
Paul Pagliari, HR director of Scottish Power, said, “Companies should be allowed to consult their workers in the manner appropriate to them.
“Enforcing laws across international companies is very difficult.”