The Labour Party says it has obtained papers which show the Labour Department is worried about proposed changes to the Employment Relations Act.
Minister of Labour Kate Wilkinson has signalled she is planning changes to the Act this year.
Labour MP Darien Fenton has revealed advice in leaked Labour Department papers which warns of the consequences of planned changes.
The papers say the removal of the requirement to conclude bargaining could result in employers walking away from the negotiating table without resolving pay disputes.
The department is also worried about a proposal to allow employers to opt out of multi-employer collective agreements as this may breach international labour conventions.
Ms Fenton says that breach could lead to an investigation, which would be very embarrassing for New Zealand.