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Work law reform hinges on small business

The size of small businesses to be exempt from new workplace laws is still being thrashed out as the government continues negotiations.

A parliamentary report into the government's workplace relations laws recommended increasing the size of small businesses exempt from multi-employer bargaining from 15 to 20 employees.

Independent senator David Pocock, a key crossbench vote in the Senate, is negotiating with the government about what number of employees strikes the right balance.

Small Business Minister Julie Collins says the increase to 20 would boost the number of exempt businesses to more than 2.5 million, up from 2 million.

But she stressed the government was still determining the final outcome.

"We are negotiating and talking about what that might look like," she told ABC TV.

The opposition is attacking the government's legislation and plans to bring in multi-employer bargaining, saying it will increase costs to small businesses.

Shadow treasurer Angus Taylor said Australia didn't need a return to a "toxic" industrial relations system, stating individual arrangements were working best.

"It's allowing employers and employees to sit down and work together to get the best possible outcome for the business and the workers," he told ABC Radio.

But unions have hit back at the claims.

ACTU president Michele O'Neil said employees at any size business had the right to bargain.

"This is big business running a scare campaign about what is going to happen to small business," she told reporters in Canberra on Thursday.

"(Small business workers) are already excluded in what the government has put through for businesses less than 15 (workers) and they have absolutely nothing to fear from us."

The bill faces an uncertain future in parliament, with the government still negotiating with key crossbenchers.

Senator Pocock has said he supports 85 to 90 per cent of the bill but wants time to consider the impact of more complex aspects such as multi-employer bargaining.

Ms O'Neil said the ACTU was also in talks with senator Pocock.

A new union report says multi-employer bargaining would narrow the gender pay gap.

The 12-page ACTU report says women on collective agreements earn $102.60 more per week on average than women not covered by collective agreements.

"Gender equity is a matter that can be bargained for and included in collective agreements," it says.

The research notes progress in narrowing the gender pay gap has flatlined and even regressed in some sectors.

The gender pay gap is 14.1 per cent of full-time ordinary time earnings between women and men, or about $263.90 per week.

Independent MP Zali Steggall said she expected there would be further changes to the workplace laws, including increases to the definition of small businesses.

"My discussions with the government have been a bit frustrating because they keep saying 'it's not the vibe of the thing, we don't intend for it to capture these businesses'," she told Sky News on Thursday.