The employment committee of the European Parliament has voted to scrap the individual opt-out in the Working Time Directive (WTD).
They have voted to remove it by 2010, so companies in the UK would no longer be able to ask staff to work more than 48 a week.
CBI deputy director-general John Cridland said the employers' body was extremely disappointed that the committee had "failed to take a balanced approach to the issue of the individual opt-out".
"Perceptions of abuse are misplaced and rather than phasing it out the CBI had urged MEPs on the committee to accept amendments designed to strengthen the protection for those who do not wish to work more than 48 hours," he said.
"We will now be briefing MEPs of all parties ahead of the full parliament vote in mid-May and we hope that they will recognise the importance of this to UK employers and their employees."
The European committee mirrors recommendations made by the UK's trade and industry committee, which said it was not convinced by the arguments for retaining the opt-out from the Working Time Directive, as it has 'enough flexibility to accommodate the needs of business'.