The CBI fears the EU will resurrect proposals that would mean firms could only make redundancies when they are on the verge of bankruptcy.
A consultation on restructuring initiatives is set to be announced today by the European Commission, as it sets out its social policy agenda for the next five years.
The CBI believes the EU may legislate to restrict companies' freedom to restructure, insisting that it would threaten many companies' long-term viability by undermining their ability to adapt to changing conditions.
CBI director general, Sir Digby Jones, said: "If businesses are prevented from taking action in a way that best suits them, jobs are put at risk rather than protected.
"Redundancy can be distressing for the individuals affected, but genuine job security doesn't come from legislation, it comes from a flexible economy, quality skills and creating an environment where there are new jobs coming on stream."