John Hutton has urged unions to put confrontation and conflict behind them and work with the government to boost economic growth and protect vulnerable workers.
Addressing delegates at the TUC Congress in Brighton the business secretary praised the modernisation of the union movement, hours after leaders warned of a repeat of 1978's 'Winter of Discontent'.
The unions are threatening to take coordinated action over public sector pay. TUC general secretary Brendan Barber warned the government could pay a "heavy price" if it does not address public sector workers' concerns.
In a speech to Congress, Mr Hutton said economic growth required an open and outward looking approach prepared to embrace change.
He continued: "And to deal with change successfully, we need to build partnerships between business, government and unions. To put confrontation and conflict behind us.
"I see this clearly in my own constituency, where workplace relations in the shipyards have changed beyond all recognition in the past ten years - helping to sustain jobs and skills in an industry many people felt had no long term future."
Mr Hutton promised a "constructive partnership" between the Labour government and unions would deliver the changes needed by workers.
As evidence, he highlighted improvements to the minimum wage and increased holiday entitlement.
He said: "I believe we have established a partnership - based on fundamental shared values - between government and trade unions that has delivered advances for working people unparalleled in modern times."
Mr Hutton echoed Gordon Brown in saying the country no longer needed to offer a trade off between economic success and social justice.
This line was attached by Mark Serwotka, general secretary of the PCS, who said rising poverty was in part fuelled by the strict pay deals imposed on low paid public sector workers.
Mr Serwotka led calls for coordinated strike action by unions in protest at public sector pay deals.
He was supported by Steve Cox of the Prison Officers Association, which last month held its first-walk out in its 68-year history.
Mr Cox told the Brighton conference: "None of us wants a repeat of the winter of 1978 but if the government ignores the workers and shuts the door in our face we will have no alternative and we will all be on the streets.