Ministers, businesses and union leaders have reached agreement on the implementation of a European Union directive on informing and consulting employees.

Under the changes, workers will be able to request information and consultation arrangements with company bosses with a petition from 10 per cent of the total workforce, after which a period of time will be allowed for reaching new agreements.

Where arrangements are already in place, the workforce will have to be balloted, with at least 40 per cent needing to back any changes.

But companies that fail to consult employees could face fines of up to £75,000.

"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," said trade secretary Patricia Hewitt.

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

"We have reached this agreement with the CBI and TUC through constructive dialogue and discussion. It's exactly the spirit in which we want new rules on information and consultation to operate in workplaces across Britain."

The new regulations will affect businesses with 150 workers or more from 2005, those with 100 or more from 2007 and those with 50 or more from 2008.

The Confederation of British Industry praised the government for making "sense of a poor piece of EU legislation".

"It has protected the good consultation, which already exists in so many companies and matters so much to employees and employers," said director general Digby Jones.

"It has also avoided overly rigid rules and damaging one-size-fits-all solutions. Employers won't welcome the new law but they recognise the government has taken CBI concerns on board.

"Good employers already consult workers properly but business never accepted that this was an appropriate area for EU legislation.

"Different countries have different employment traditions. It is wrong to try and squeeze them all into one legal straightjacket. Multinationals in Barcelona should not necessarily consult workers in the same way as small firms in Barnsley."

The general secretary of the TUC, Brendan Barber, described the agreement as a "breakthrough".

"Today is a real milestone on the long march to winning information and consultation rights in Britain's workplaces. People at work are on the brink of securing the right to be told what's going on and the right to be heard. It is a breakthrough and a great victory for sustained cross-European union campaigning," he said.

"These new rights could lead to the biggest change in workplace relations for a generation. No longer should company announcements come out of the blue. But that's not a threat, it's an opportunity for both employees and employers to improve the quality of working life and boost productivity."

Barber added that the government had done "the right thing" in bringing unions and bosses together to reach agreement on the plans.

"We have always said that social partnership of this type is the best way to draw up the detail of implementation, particularly when there is a clear legal requirement or government policy that both of us understand is non-negotiable," he said.

But the Conservatives warned the directive would adversely affect business flexibility.

"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," said shadow trade secretary Tim Yeo.

"Most well run companies already keep their workforce fully informed about relevant decisions and I urge everyone in business to adopt this best practice.

"The essence of good communication is flexibility, as many companies know. A one size fits all blueprint fails to recognise the diversity of companies, and will mean rigidity and formality in an area where diversity and flexibility are essential."