The Chartered Institute of Personnel and Development (CIPD) has welcomed the Government's 'flexible' approach to the Information and Consultation Directive.
The European legislation is designed to encourage more communication and negotiation, with employers and staff coming together to discuss the future of the business.
Under the rules, which are to be phased in by 2005 for large companies, bosses would have to inform and consult with staff over business issues such as redundancies or contractual relations.
Many companies feared the directive would be potentially damaging and force them to discuss business decisions, but the CIPD said it would help motivate and engage the workforce.
Mike Emmott, head of employee relations at the CIPD said: "This is not the bad news story that some employers had feared. The draft regulations present HR directors with an opportunity to push employee communications right up the corporate agenda.
"This is an issue about the bottom line, and about winning hearts and minds. Employers need to establish relationships based on trust if employees are to be engaged in and committed to their work. Information and consultation are key tools in the process of winning trust," he added.
Emmott said the flexibility of the Government's position would allow employees to continue with existing good practice and still satisfy the requirements of the regulations.
This means, for example, that where employers currently inform and consult their employees directly, rather than through representatives, they can continue to do so provided staff are happy with the arrangements.