Widespread introduction of transnational worker consultation councils seems likely following a historic agreement by a British company.Earlier this month United Biscuits became the first UK company to sign a deal with a union (the GMB acting on behalf of European food workers) to set up a European works council (EWC) for its UK and continental workforce.

The move is important because it spells out compliance with an EU works council Directive (part of the social chapter of the Maastricht Treaty) from which the UK government has opted out.The Confederation of British Industry now expects a further 100 multinational British companies to follow suit by forming committees comprising employer as well as worker representatives which will meet regularly to discuss at European level corporate strategy, employment prospects and commercial factors affecting operations.Joe O'Hara, a solicitor, is the national legal officer of the GMB.

He says: 'We hope that the agreement marks a development of soci al partnership in the workplace.

It is really intended to improve the joint understanding of the business.

It is not meant to be a substitute for any collective bargaining.'The government had argued that the works council Directive would mean extra cost and uncertainty for British business.

Mr O'Hara counters that it 'does not make operational sense' for a company to be excluded from the works council Directive.This Directive is only applicable to British companies with a continental workforce.

It affects companies with a total of 1000 employees in the EU outside the UK, and which also have a total of 150 employees in two member states not including the UK.But many UK employers, like United Biscuits, will, for practical reasons, see no advantage in excluding their British workforce from the councils and therefore go on to comply fully with the Directive.

This has been described as 'creeping implementation' of the social chapter.Fraser Younson, an employment law expert and partner with Baker and McKenzie, is currently advising clients on the implications of the works council Directive.He believes that this is 'the social chapter (affecting multinational companies) through the back door'.

He adds that such companies implementing the works council Directive 'feel that is the way they should deal with all their employees throughout Europe'.And Ronnie Fox, a senior partner with Fox Williams and a corporate lawyer specialising in employment law, says: 'The government thinks it is the social chapter through the back door.

My view is that employers should not be forced to accept another layer of regulation.

There is a huge body of regulation in employment law in this country.

Do we need more?'However, Mr O'Hara says his advice to the GMB is that the provisions of the social chapter will benefit its members.Earlier this year the UK government was found guilty by the European Court of Justice for not implementing two EU Directives which required employers to consult workers about redundancies and transfers of business.

These are old Directives from the 1970s which do not allow the government to opt out.The government is currently considering how to comply with the court's ruling, and is expected to propose legislation early next year.It had argued that union representation in this country provided sufficient means for such consultation.

But the court rejected this because, under UK law, union recognition is not compulsory.Mr Younson does not see how the government can now avoid providing a structure of consultation for workers if it is to comply with the Directives on redundancy and business transfer.

He says: 'That is going to have an enormous impact on UK industrial relations.

Only 35% of the workforce have any collective representation at all, and most of that is in the public sector.'He predicts that the effect will be to increase the power of the unions, because it will be union activists who will want to form the new consultation groups.

'When you start setting up these little committees it will create a focal point for representation and therefore there will be a drift towards collective representation,' he says.While the effect of the works council Directive is to have standing committees, the redundancy and business transfer Directives only require employers to provide committees on an ad hoc basis.Melanie Tether, an employment law specialist and partner with Norton Rose, says: 'If an employer has got to have employee representatives for redundancy and business transfer consultation then it may well be more sensible for the employer to have them there all the time.'She says the government may make a point of principle out of distinguishing between committees that require consultation over a broad range of company issues and ones that are only appointed for specific topics.

'Everyone has been wondering what the government is going to do about this and how it is going to respond, given its well-known antipathy to employee representation,' she says.Mr O'Hara believes that works councils will also 'enhance the relationship between the union and the management'.'The idea is that the union will have a greater appreciation of the European-wide operations of the company.' He maintains that during the collective bargaining the union officials will bring with them a greater understanding of the company and the 'business context' in which they are negotiating.But one thing seems certain: employers will have to consult more widely with their workforce.