Businesses and unions are to be urged to work more closely under new legislation.

The Employment Relations Bill, announced in the Queen's Speech, is aimed at improving relations between firms and their employees.

It will build on the EU Information and Consultation Directive to create a "no surprises culture".

This means worker councils would have to be established and firms will have to consult with employees about key decisions that affect them.

That will include employment prospects, contract changes and redundancies.

Unions will get stronger self-regulation, improvement of recognition procedures and a tightening of election procedures.

Individual employment rights will also be boosted.

Union leaders gave a warm response to the announcement - and pledged to fight any resistance by business.

"There is much to welcome in today's Queens Speech. Trade unionists in particular will welcome the employment relations," said Brendan Barber, TUC general secretary.

"We will be lobbying hard to make sure they make a real difference to people at work, and resisting any employer pressure to tone them down."

The Conservatives denounced yet more red tape and regulation for businesses.

"Most well run companies already keep their workforce fully informed about relevant decisions," said shadow industry secretary Stephen O'Brien.

"Imposing a uniform, EU drafted regulation, helps neither those working in the business nor the business owners, but further erodes Britain's competitive position.

"Given that productivity growth has halved under Labour, we are concerned that this bill offers too much emphasis on union involvement in management decision making."

Bosses praised the government for not going further with their proposals.

"The government's rejection of union calls for a major review of the existing act is a victory for common sense," said John Cridland of the CBI.

"It would have been entirely wrong to start unpicking the current legislation which is still new and actually appears to be working quite well. It's also encouraging that the government is committed to taking forward the joint CBI-TUC agreement on informing and consulting staff."