The opposition has claimed industry groups have deserted small businesses by siding with unions following the government's jobs and skills summit.
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Deputy Liberal leader Sussan Ley says small businesses have been left in state of "confusion" after groups such as the Council of Small Business Organisations Australia sided with the Australian Council of Trade Unions on industrial relations and wage bargaining reforms.
In a letter exchange seen by ACM between COSBOA chief executive Alexi Boyd and Ms Ley, the opposition outlined it would not support IR reforms which would hurt small businesses.
Ms Ley noted the memorandum of understanding signed between COSBOA and the ACTU on bargaining reform would push industrial relations back to the 1970s.
"Unfortunately, the MOU signed with the ACTU caused a great degree of confusion and frustration amongst small businesses, and many parliamentarians heard these concerns first-hand and in great volume," Ms Ley said.
"The changes that the ACTU are seeking to embed are radical, dangerous and would send the Australian economy on a dangerous one-way journey back to the 1970s.
"I am certain that if COSBOA had its time again, it would have approached any discussions with the unions in a different way, given the deep distrust and scepticism small businesses hold when it comes to the ACTU."
Ms Boyd in her initial letter of clarification on COSBOA's intent on wage bargaining reform said the peak body would always back its members and was seeking changes to make a fairer system.
"I believe the work of COSBOA is to do the hard work of ensuring there is equity and fairness in the system, and to advocate for flexibility, and fit-for-purpose models for small business operators," she said.
COSBOA has previously raised concerns there is little to know flexibility in the wage bargaining system, nor do small businesses have the resources have the resources to interpret complex awards and enterprise agreements.
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There is also speculation that internal govern processes within COSBOA were not followed when signing the MOU with the ACTU, which has apparently sparked anger among members and a call for a leadership change within the industry body.
ACTU secretary Sally McManus is scheduled to speak at the National Press Club on Wednesday.
Ms Ley outlined Labor was supporting the agenda of "militant" unions such as the CEFMMEU.
"The intent of collaboration is a good one but the trade union movement, particularly the militant CFMMEU, have a long and storied track-record of hurting small businesses and advocating for policies that directly hurt their interests," she said in her letter to Ms Boyd.
Employment Minister Tony Burke during the Jobs and Skills Summit at the start of September pledged to strengthen multi-employer bargaining codes.
"Consultation with my department for the different stakeholders in turning these principles into law and working through the detail of the principles will begin next week," Mr Burke said on September 1.
"We are ready for business, for unions, and for government to start to work out where are the additional places where we can strengthen tripartism, and constructive social dialogue in workplace relations."
A number of employer groups said these changes posed a risk of allowing more industrial action strikes.
