A rule which allows workers to choose to put in more than 48 hours a week may end after MEPs voted to scrap it.
Workers' hours have prompted fierce debate
They voted to phase out over three years the right to opt out of the Working Time Directive.
Unions said the decision was a victory for UK employees, but business groups said competitiveness would suffer.
The plan would have to be approved by the Council of Ministers. The UK government hopes to block it from becoming law.
To do that, it would need to recruit other countries' support to retain the clause under qualified majority voting.
Under the current system - used more in the UK than elsewhere - individuals can opt out if they want to work longer hours.
The issue was about "freedom of choice", said the Director-General of the CBI, Sir Digby Jones.
"People who just do five hours a week overtime and use the money for a holiday. All I want to know is who's going to pay them for the money they lose."
He added: "The European Parliament has learned nothing about the challenge of globalisation.
"Presumably these are the same MEPs who will be complaining about employers relocating to China and India in the years to come."
The retention of the opt-out had also been supported by hospitals in Germany, France and Spain and small business groups across the EU.
But the vote saw Labour MEPs oppose the UK government line and side with many Socialists, Communists and Greens in backing the changes.
The Working Time Directive was first agreed in 1993, and the changes were debated as part of a 10-year review.
MEPs voted by 378 to 262 in support of a number of changes to the directive, including scrapping the opt-out.
MEPs also voted that on-call time should be counted as working time in most instances, and average working hours could be calculated over a full year, rather than the present period of four months.
"The measures we are supporting give workers a good degree of flexibility to manage their working hours," said Gary Titley, the leader of the Labour MEPs.
The T&G union hailed the MEPs' vote as a blow against the UK's "long hours culture".
General Secretary Tony Woodley said: "The opt out is harming the health and safety, the family life and the productivity of British workers.
"MEPs have done the right thing for British workers who have been put under unacceptable pressure to sign away their rights in the past by employer."
But Liberal Democrat MEP Liz Lynne said there should be "less drastic ways" of protecting workers.
"What is important is that wherever the opt-out is used it is truly voluntary, and reflects the best interests of workers," she said.
And other business groups including the British Chambers of Commerce, the Recruitment and Employment Confederation and the EEF also voiced their disappointment at the decision.
"It flies in the face of the EU's decision to focus on growth and jobs and sends a strong message that the European Parliament is not interested in improving Europe's competitiveness," said BCC Director General David Frost.