The Australian Industry Group says unions are standing in the way of employees who want more flexibility in their work habits.
AIG chief executive Innes Willox said the Fair Work Act had empowered many unions who "recoil" at the prospect of innovative workplace arrangements that allow employees flexibility in their work habits.
He said these unions were out of step with the changing needs in work practices of both employers and employees.
"It's not only businesses that want flexibility. The evidence points to the fact that individual employees also want more choice to help strike the right individual balance between work, study and family life," Mr Willox said.
"Also, the community needs more flexible workplaces to increase workforce participation, which is particularly important in the context of the ageing population.
"Unfortunately, despite these facts, unions and many misguided interest groups are pushing to restrict flexibility."
In a speech to be delivered to the Annual Workforce Conference in Melbourne on Friday, AAP reports that Mr Willox says Australia's workplace relations laws impose unnecessary barriers on productivity.
He cited unions successfully restricting the use of labour hire and contractors and a recent rise in industrial disputes as examples of flaws in the Fair Work Act.
"Despite the obvious challenges facing Australian businesses, unions relentlessly push to restrict flexibility for employers. Invariably, this push is dressed up with rhetoric about protecting employee rights," Mr Willox said.
"Often the arguments are based on myths rather than realities. Unfortunately, the federal government has given weight to many of the myths over the past few years."