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Updated at 10:09 am on 15 May 2012
The Employers and Manufacturers Association says employers must have the ability to walk away from collective bargaining if a deal can't be reached.
Changes approved by the Cabinet on Monday will remove the requirement to reach a collective agreement once negotiations are under way, which means either side can walk away if they can't reach agreement.
The new laws also propose to remove the requirement for new workers to be employed on the collective contract for their first 30 days and allows employers to opt out of multi-employer bargaining.
Opposition parties and unions say the changes undermine workers' rights and will drive down wages.
The Council of Trade Unions says the changes to industrial relations laws being considered are the worst attack on workers' rights since the 1990s and will give employees few options, as mediation is voluntary.
But a spokesperson for the Employers and Manufacturers Association says bargaining between unions and employers can take years and the law changes will provide a way out in extreme situations where an agreement can't be reached.
David Lowe told Radio New Zealand's Morning Report programme on Tuesday that employers need to be able to walk away from bargaining and get on with running their business.
"Most disputes that get to a very protracted level of dispute have been bargaining around about nine, 12 months or even longer than that. And that's the sort of period of time that you get to before employers reach the view that they've done it to death, there isn't a deal to be had."
Mr Lowe believes the law changes will not drive wages down.
But the CTU says the changes would have enabled Ports of Auckland to walk away from contract negotiations and proceed with redundancy plans.
Union president Helen Kelly told Morning Report the current laws have protected workers from being made redundant, as the port company intended to contract out its workforce.
"Current laws are protecting those port workers from the most arbitrary action which is, ultimately, mass dismissal and replacement. That's not good faith - that's what would have happened under this law."
Prime Minister John Key says labour laws signed off by the Cabinet are changes which the National Party campaigned on.
Mr Key says the one change the Government has made, which was not campaigned on, is the period of time for which unions or employers can initiate collective bargaining. It will allocate the same amount of time to unions and employers to initiate bargaining.
Legislation containing the changes is likely to come before Parliament this year.
Copyright © 2012, Radio New Zealand
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