THE Government has made the "best of a bad job" with a new EU law which means that employers must properly consult their workforce.

That is the verdict from the Confederation of British Industry (CBI), which said yesterday it had won a number of changes to how the legislation will be implemented.

Unions had wanted works councils in every business, with a right to veto management decisions and unlimited fines for firms that broke the rules.

The CBI said it had ensured that, in the UK at least, the new legislation would not interfere with successful pre-existing consultation arrangements, nor would it allow small groups of employees to overturn such arrangements.

A number of safeguards have also been included, and employers will only have to consider changing their existing consultation arrangements if ten per cent of the workforce say they want to.

Companies who fail to reach a voluntary agreement over how they will consult their staff will have to set up a committee representing all employees and elect representatives.

They will consider issues such as contracts, employment prospects and economic outlooks.

Employers who do not comply with the law can be fined up to a maximum of £75,000.

Digby Jones, director general of the CBI, said: "The Government has made sense of a poor piece of EU legislation.

"It has protected the good consultation and avoided overly rigid rules and damaging one-size-fits-all solutions.

"When will Brussels leave alone our successful, flexible labour market?"

Trade Secretary Patricia Hewitt outlining the proposed legislation, which was drawn up in consultation with the Trades Union Congress (TUC) and the CBI, said: ''I want these changes to lead to a 'no surprises' culture at work, where employers and employees discuss common ground and find solutions to mutual problems.

"I want to see an end to the climate where people only hear about job losses from the media over their breakfasts."

The proposals, set out in a consultation document, are based on a European Union directive.