THE Australian Industry Group will launch an assault on Labor's industrial relations system today, blaming the Fair Work Act for the country's feeble productivity growth.

Previously cautious in her remarks about the act and consulted closely by Julia Gillard as industrial relations minister in drafting it, Ai Group chief executive Heather Ridout will tell a workplace conference that after two years, parts of it have been ''found wanting''.

Heather Ridout, CEO of AIG. Credit:Andrew Quilty

''The idea that the Fair Work Act represents the perfect balance between all the competing interests and should not be altered is simply not sustainable,'' she will tell the conference. ''It is common for new, major pieces of legislation to lead to unintended consequences and the Fair Work Act is no exception.

''Any country, which freezes its workplace relations system in time and decides that no further improvements are desirable or necessary, will subject its citizens to low levels of productivity growth, reduced employment, reduced competitiveness, and harsh effects from globalisation.''