Ministers said reforms of the Transfer of Undertakings and Protection of Employment (Tupe) regulations will make the process of a move easier and fairer.
Employment Relations Minister Jo Swinson said Tupe rules were essential in ensuring business transfers happen "in a fair and efficient way".
However, TUC general secretary Frances O'Grady said: "The changes could see hundreds of thousands of vulnerable workers lose out on vital protections."
Under the changes, new businesses will be able to renegotiate terms and conditions of collective agreements after a year provided the change is no less favourable.
The rules will be also be amended so that, where the place of work changes after transfer, any redundancies will not be automatically unfair.