Companies may have to assess the psychological health of their staff when considering redundancies under EU plans.
The new directive would also force bosses to examine the impact of job cuts on the community.
But the proposals have angered business leaders already struggling to keep up with regulation and red tape from Europe.
Tory MP David Nuttall said: ‘The last thing the British economy needs is more interference from Brussels.
‘This is a time when we want to be doing everything we can to remove the burdens on our businesses so they are free to make some profits, grow and hopefully create jobs.’
Tim Thomas, the head of employment policy at the manufacturing industry body EEF, told the Daily Express: ‘The UK is trying to overhaul employment law, but faces constant tinkering from the EU.
‘Under these proposals, employers will have to negotiate with unions over redundancies in a way they don’t at the moment.’
The plans, drawn up by Spanish socialist MEP Alejandro Cercas, go against a report commissioned by the UK Government that urges ministers to introduce a ‘no-fault dismissal’ rule to make it easier for firms to sack staff.
They have emerged in a European Parliament employment and social affairs committee document, which proposes that ‘companies shall monitor…the psycho-social health of employees affected by restructuring processes.’
It adds: ‘Companies shall create tools for the regular evaluation and reporting on their restructuring practices, in co-operation with employees’ representatives and the external organisations involved in that process.’
The parliament is set to vote on it in November.
The latest proposals come after an EU law was passed extending the right of women on maternity leave to have full pay for 20 weeks.
Businesses say the changes could cost companies £100million a year