The TUC wants the Government to set up a fund that would pay workers up to 70 per cent of their lost income if their jobs are moved overseas.
In its submission to next year's comprehensive spending review, the TUC said companies would only be asked to contribute a "tiny percentage" of the money they saved from offshoring to the fund.
TUC general secretary Brendan Barber estimated it would cost firms only four or five per cent of the savings.
It would apply to workers who could not find work or be moved to lower paid jobs, be payable for two years and administered at a regional level.
Mr Barber cited the example of MG Rover, which collapsed in 2005 and was subsequently sold to the Chinese firm Nanjing Automobile. Eight months after being laid off, only half the workers were in full-time work and on average were earning £3,523 less a year, he claimed.
Mr Barber said globalisation had made a "real difference to the quality of life of working people in the UK and across the world, but there are victims as well as winners".
He went on: "Too many British workers are losing their jobs when companies move abroad or fail to compete. Cheap DVD players and clothes are scant compensation if you are being downgraded to poor quality, insecure, low-paid work.
"Of course we can't say 'stop the world I want to get off' and turn back the tide of globalisation by erecting barriers to try and protect industries and jobs. But that does not mean we are powerless in shaping its impact.
"The Government must provide support to older and unskilled individuals to help them adapt to the opening up of world markets and ensure that all UK workers benefit."
The TUC submission said UK employees are more vulnerable than their European colleagues because Britain buys more than it sells on the global market; is home to more multi-national companies who can easily relocate operations overseas and typical business strategy is based around keeping down costs, such as wages and investment in skills and training.
"Unlike the US, which imports more than it exports, the EU has a trade balance. But Britain is a net importer, buying in 25 per cent more goods and services than it sells abroad," the TUC said.
"This means that UK companies are more vulnerable to international developments."
The findings come as research from JobCentre Plus says that 27 per cent of British businesses were recruiting new staff last year.
Some 56 per cent of small businesses were recruiting in the last 12 months, up four per cent on the previous year.
Matthew Knowles, of the the Federation of Small Businesses, said that between 2000 and 2004, large businesses shed 1.5 million jobs in the UK but small firms created two million more.