Jeremy Corbyn has launched a campaign to formulate a new business settlement to benefit workers and employers.

Labour's Workplace 2020 initiative is aimed at boosting the rights of employees and encouraging trade union membership.

Mr Corbyn first unveiled the idea when he addressed the May Day rally in London - the first time the head of the party has addressed the rally in 50 years.

He formally launched the campaign at green energy company Ecotricity in Stroud, Gloucestershire, on Thursday.

"In the UK the workplace - this place excepted and others excepted - is one of the most unequal of modern economies," Mr Corbyn said.

"Those at the very top in Britain earn very high wages and low pay is very widespread.

"Six million people in Britain earn less than the UK living wage and in-work poverty is at record high levels.

"The share of wages as national income has fallen and continues to fall as the imbalance of huge levels of salary at the very top of many companies continues to rise and the share of the income of those companies for workers has continued to reduce.

"In Britain we have agency Britain in effect - zero hours contracts, insecurity and wage under cutting.

"It's not sustainable, it's not healthy, it leads to desperate levels of stress and plays into the mental health crisis that so many people suffer in Britain at the present time.

"What people need is security in the workforce, security of their living and that's where Workplace 2020 comes into that discussion.

"Instead of a race to the bottom in jobs, pay and workplace rights, we'll be shaping a different approach based on full employment, a high skilled workforce with decent pay, rights of the self-employed and the employed and a voice that works for a collective bargain."

Mr Corbyn said the scheme would be part of Labour's policy making process, involving "very large" numbers of people to shape the party's understanding of what the country's priorities are.

"Above all, it's unlocking the potential in everybody to think of creative ideas of how we can do things differently and better," the Labour leader, who grew up in nearby Chippenham, added.

"How those at work want rights, want a voice, want democracy but above all, want to be able to contribute so that their skills are fully utilised."

Unite general secretary Len McCluskey hailed Workplace 2020 as proof the party are determined to improve the lives and treatment of working people.

"This is a fantastic move by the Labour party and is exactly the sort of initiative we expect from the real party of working people," he said.

"It sits in sharp contrast to a Conservative government that has always regarded workers and their unions as the 'enemy within', typified by their appalling trade union act.

"Crucially, this shows a Labour party willing to ask us all to consider what sort of country we want to be."

The union will be urging its 1.4 million members and their families to take party in the consultation, it said.