Coronavirus-hit businesses will be exempt from the better off overall test in striking enterprise agreements if they can prove lasting pandemic damage.
The Morrison government’s industrial relations omnibus bill will be introduced to parliament on Wednesday, with enterprise bargaining set for reform.
The Fair Work Commission will be given limited scope to approve agreements that don’t guarantee all workers are better off overall.
Coronavirus impacts and the extent of support for the deal between all parties will be taken into account, with the agreements limited to two years.
The measure will expire two years after the bill becomes law.
The Fair Work Commission will have 21 days to approve agreements or explain exceptional circumstances.
The better off over all test will also be reformed to prevent hypothetical working arrangements from being considered.
Non-bargaining third parties will only be able to intervene in enterprise agreement approvals in exceptional circumstances.
Industrial Relations Minister Christian Porter said the changes would make the enterprise bargaining system more capable of delivering productivity growth and higher wages.
He said the system was almost unrecognisable from when former prime minister Paul Keating introduced it to deliver productivity gains alongside wage growth.
“The system has been slowly choked by increased technicality, complexity and regulation, leaving it almost unrecognisable today,” Mr Porter said.
In other changes to the system, applications to terminate agreements will not be allowed in the three months after expiry.
The government will also review low-paid bargaining provisions to determine whether they are operating as intended.
Mr Porter has spent the past three days announcing other areas targeted in the bill including controversial measures to allow more applications for casual conversion.
Retail, accommodation and food services part-time workers will be able to negotiate more hours without overtime.
Wage theft will be made a federal crime for the first time with penalties of up to four years’ jail for guilty bosses who could also cop $1.1 million in fines.
“While it is likely that some employers will say our reforms should have gone further, it’s equally likely that unions will say we have gone too far,” Mr Porter said.
Long-life deals on major mining and infrastructure projects – known as greenfields agreements – expected to be reformed to ward off threats of industrial action.
Awards are set to be reduced from the 122 that currently exist.
Unions and Labor have already sounded alarm with some of the announced changes, signalling a potential fight for the coalition to pass them through the Senate.
But the legislation will not come to a vote until next year, with a parliamentary inquiry set to scrutinise the draft laws early next year.