The government has set out draft legislation aimed at forcing bosses to consult their staff on all management decisions affecting employment.
Under the plans, all companies with more than 150 staff must adopt consultation procedures in 2005, while those with 100 or more must comply by 2007, and those with 50 or more by 2008.
Firms found to be in breach of the rules would face fines of up to £75,000.
The proposals, based on a European Union directive, would also give workers the right to request new consultation arrangements with a petition from 10% of the workforce.
But if agreed consultation procedures were already in place, the workforce petition would have to gain the backing of 40% of employees in a second ballot in order for the existing arrangements to be changed.
Trade unions and business associations, who have taken part in intensive behind-the-scenes talks on the proposals with government officials, welcomed the announcement.
"The government has made sense of a poor piece of EU legislation," said Digby Jones, director general of employers' group the CBI.
"It has avoided overly rigid rules and damaging one-size-fits-all solutions."
TUC general secretary Brendan Barber said the new proposals were "good for employees and business".
"These proposals are all about building trust, respect, and partnership in the workplace," he added.
The European Union directive underpinning the government proposals was aimed at preventing surprise mass redundancies as companies closed down plants to cut costs.
Fired by media
In Europe, the most notorious incident of this kind took place in 1997 when French carmaker Renault unexpectedly shut down its factory in Vilvoorde, Belgium, at the cost of some 3,000 jobs.
Three years ago, some British workers at Rover's Longbridge factory also lost their jobs when the factory's then owner, BMW, pulled out at short notice.
Some Longbridge employees claimed they first learnt they had been made redundant while listening to the radio news.
Trade & Industry Secretary Patricia Hewitt said she hoped Monday's proposals would prevent this from recurring.
"I want these changes to lead to a 'no surprises' culture at work. I want to see an end to the climate where people only hear about job losses from the media, over their breakfast," she said.
Conservative trade and industry spokesman Tim Yeo criticised the proposals.
"Compelling companies with as a few as 50 employees to consult and inform their workforce about a range of managerial decisions is potentially burdensome and not necessarily the best way to achieve best practice," he said.