Firms which fail to consult their employees over workplace changes could face fines of up to £75,000 under proposed legislation.

The scheme, hailed as the biggest change in workplace relations in a generation, will give workers the right to be consulted by their employers on all major changes.

It is designed to put a stop to employees hearing about mass redundancies and other shake-ups through leaks to the media.

Trade Secretary Patricia Hewitt yesterday outlined the proposed legislation, which was drawn up in consultation with the Trades Union Congress (TUC) and the Confederation of British Industry (CBI).

She said: "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.

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

The proposals, which are set out in a consultation document, are based on a European Union directive.

The proposals would initially apply to firms with more than 150 staff and would come into effect in 2005.

They would then be phased in for companies with more than 100 workers by 2007 and for firms of more than 50 employees by 2008.

Employers must begin informing and consulting their workers on management decisions affecting their future if ten per cent or more of the workforce ask for the process to be set up.

But Ms Hewitt stressed it was not a "one size fits all" solution and that firms which already had a successful consultation process would be free to continue their existing systems.

TUC general secretary Brendan Barber said only "bad managers" would resent having to communicate with their staff.

"The news is a real milestone on the long march to winning information and consultation rights in Britain's workplaces."