An EU information and consultation Directive which compels companies to consult with staff should not be allowed to interfere with a company's right to manage, IBEC director of enterprise Mr Brendan Butler said yesterday.

"We don't have a problem with the idea of consultation in principle but we would oppose anything that would interfere with a company's right to manage," he said.

"It is vital that a company's right to manage is protected. That is absolutely fundamental and would be a bottom line for us."

The bulk of the provisions of the Directive were agreed by social affairs ministers on Monday. Under its terms, companies with 50 or more employees will have to provide information to, and consult with, staff on corporate strategy in areas where it may lead to changes in work organisation, contracts or have a negative effect on jobs.

A key issue for IBEC was the fact that practical arrangements are to be defined in accordance with national law and practice, said Mr Butler.

"It says what types of areas people have to be consulted on and how it is to be done, but practical arrangements are left to member states," he said.

"So, we have to look at this when it comes into Ireland and sit down with Government and unions and try to come to an arrangement to make sure employees continue to be informed, but that it doesn't introduce too much rigidity."

It may take up to two years to see whether the EU got the balance right, Mr Butler said.

The Directive has been welcomed by ICTU. "We're happy that this Directive has finally been adopted. We'd like the implementation dates to be sooner but we're happy it's going to come into effect," said ICTU assistant general secretary Mr Tom Wall. Companies with 50 or more employees have seven years to prepare for the Directive, while companies with more than 150 staff will have to adopt the regulation within three years.