The Confederation of British Industry said it did not see the need for further reform, adding that the current framework of laws built up over the past 15 years provided "a sound basis for good employee relations".
Responding to a Green Paper last year which canvassed new curbs on trade union immunity and strike ballots, the CBI's director of human resources, John Cridland, said it was not clear that the Government's proposals would help resolve disputes and could merely increase uncertainty.
"CBI members do not believe that the proposals should be taken forward," he said.
The Green Paper recommended removing a trade union's right to immunity from legal action during an industrial dispute, increasing the period of advance notice a union has to give of industrial action and tighter ballot rules to prevent a small minority of union members making strike action possible.
But following a meeting of its governing council the CBI rejected all these proposals. The one idea that did deserve further consideration and development was the proposal to reballot members after lengthy disputes.
This is the Government's second setback on employee legislation. In December the British Chambers of Commerce published a survey of its members showing overwhelming opposition to new laws to alter the employment rights of workers in small firms. The Government had proposed removing protection from unfair dismissal for employees in companies with workforces below a certain level.