warned of ''considerable risks'' if the

Federal Government does not get the

detail of its industrial legislation right

in the current climate of rising

inflation and wages pressures.

While the ACTU has blamed

increased fuel prices and not wages

for higher inflation, the Australian

Industry Group (Ai Group) said the

new laws must not allow a return to

the old days of union ambit claims

and compulsory arbitration.

In a speech to the Queensland

Industrial Relations Society yesterday,

chief executive Heather Ridout

said she was concerned about how

the new laws would define the

Government's commitment to ''good

faith bargaining'' between employers

and unions, and that access to

arbitration to settle disputes was

limited.

The Government is preparing a

substantive Bill for the August

session of Parliament to flesh out the

bulk of the system to replace Work-

Choices at the start of 2010.

In February, the Rudd Government

introduced the first part of its

new laws with its ban on new

Australian Workplace Agreements.

Ms Ridout said hundreds of

enterprise agreements among Ai

Group's 10,000 manufacturing

industry members were coming up

for renegotiation in the second half

of the year, including some major

bargaining rounds.

''Times are interesting. Inflation is

on the rise and wages are drifting

upwards, despite this week's soft

Labour Cost Index figures,'' she said.

''All this points to considerable

risks if we get the shape or details of

the new workplace relations system

wrong.''

Ms Ridout said any push to widen

access to compulsory arbitration

beyond when a dispute was damaging

the economy could leave unions

or employers with little incentive to

reach an agreement.

It could lead to a situation where a

union could make excessive claims,

back it up with industrial action and

then wait for a ''compromise'' to be

imposed.

''This would represent a return to

the old days of arbitration around

ambit claims. Arbitrated outcomes

(particularly those favourable to

unions) would undoubtedly flow-on

across industries,'' Ms Ridout said.

The Ai Group and other employers

were also concerned about the rules

surrounding the content of

enterprise bargains, limits on industrial

action and the need to retain

secret ballots.

Ms Ridout singled out the new

body to replace all industrial

agencies, Fair Work Australia, and

said she was concerned about how

its different functions advising on

law, investigating alleged breaches,

pursing prosecutions and imposing

penalties would be separated.

''Unless very clear divisions are

established between different

functions serious conflicts of interest

will undoubtedly arise,'' she said.

While Workplace Relations Minister,

Julia Gillard, had given

commitments on these issues, Ms

Ridout believed the proof would be

in the detail of the drafting.

Ms Gillard and her department are

preparing the Bill in consultation

with the Workplace Relations Consultative

Committee which has a

range of members including the

ACTU and the Ai Group as members.