Australian unions are gearing up for a battle with Opposition leader Tony Abbott after he disclosed on Wednesday plans to revamp the country's flexible workplace agreement system.

Under Mr Abbott's proposal, tourist-oriented establishments are expected to benefit the most since it would allow them to operate longer on weekends, off hours and holidays.

Dave Oliver, secretary of the Australian Council of Trade Unions, said union leaders are prepared to sign off a multimillion-dollar fund to battle the Coalition and business in a bid to expose Mr Abbott's industrial relations agenda before the next election.

"We will not stand by and let him take Australia back to a dog-eat-dog industrial relations system, where low-paid workers have their penalty rates and other rights at work stripped by individual flexibility arrangements that undermine their collective agreements," Mr Oliver was quoted by The Australian in his Newcastle speech on Thursday night.

On the same day, employers backed Mr Abbott's promise to amend the flexibility provision of the Fair Work Act which would permit companies to buy out the penalty rates of employees and bring back the Australian Workplace Agreements under the John Howard government's Work Choices regime, which the Opposition leader has declared dead, cremated and buried.

Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry, said a revamped arrangement would permit workers increase their base pay in exchange for a reduction in penalty rates for off-hour work, on the condition that the agreement would be subject to a no-disadvantage test.

Mr Abbott claimed he would be the best friend of workers if the Coalition wins the 2013 election, but Prime Minister Julia Gillard debunked his promise.

"With friends like that who needs an enemy. We have been here before when Mr Abbott was in government and he and his cohorts were in on a plan to rip penalty rates off Australians who rely on that money. If that is being the workers' best friend then I would hate to see an enemy of working people," The Australian quoted Ms Gillard.

Mr Abbott denied he will rip penalty rates, but insisted he wants to see higher wages and more jobs created.

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