The peak body for unions and representatives of small business have struck a deal on workplace reform ahead of the federal government’s jobs and skills summit.

The Australian Council of Trade Unions and Council of Small Businesses Australia (COSBOA) have agreed to work together to simplify and reduce complexities within the industrial relations system.

This includes a pledge to support options for collective bargaining, proposed by the ACTU last week, which would enable multiple workplaces to work together to strike deals with employees.

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Supporting a simpler form of the “better off overall test” in fair work laws is also part of the agreement.

The current bargaining system was too complicated and inefficient, COSBOA chief Alexi Boyd said.

“We welcome the opportunity to explore new flexible single or multi-employer options that can be customised to our circumstances,” she said in a statement on Monday.

“The one-size-fits-all approach doesn’t work. The jobs summit is an opportunity to look for new and modern solutions.”

Small businesses were missing out under existing arrangements, ACTU secretary Sally McManus said.

“The current enterprise-focused system was built for an economy of 30 years ago. It needs to be upgraded and work for the economy of today,” she said.

“The employees of small businesses, and their owners, should be able to access the same benefits from bargaining that bigger businesses have enjoyed.”

Employment Minister Tony Burke said the agreement between the two groups was the type of cooperation the government wanted to see at the two-day summit at the end of the week.

“None of this is to undo the concept that the main form of bargaining will continue to be enterprise bargaining,” he told ABC radio on Monday.

“But particularly in small businesses, the agreements that haven’t been possible have been in industries like childcare, aged care, smaller retail … they’re the ones that have tended to miss out on bargaining.”

-AAP