The federal government has put an ambitious review of workplace laws on hold as it spends political capital on selling its unpopular budget and amid fears of a ferocious campaign from Labor and the union movement that is expected to revive the spectre of Workchoices.

The terms of reference for the Productivity Commission's review of the Fair Work Act - the centrepiece of the government's industrial relations policy at the election - have been all but finalised.

Industrial relations: Fears of a backlash prompts the government to put on hold a review. Credit:Tanya Lake

But Prime Minister Tony Abbott's office has intervened to delay the launch of the review until the second half of this year so it can focus on steering the budget through the unco-operative Senate.

Earlier this month, Employment Minister Eric Abetz told a Senate hearing the review terms should be released ''shortly'', but admitted: ''I think I may have said that at the last estimates [in February].''