More needs to be done to tackle employers outsourcing and subcontracting work to drive down wages, Labor’s shadow industrial relations minister Brendan O’Connor has suggested.

In comments delivered at the National Press Club on Wednesday, O’Connor will make the case for expanding bargaining beyond a worker’s direct employer, arguing that many people are employed in workplaces without a union representative.

The comments stop short of endorsing Australian Council of Trade Union demands for the option of industry-level bargaining but suggest Labor will consider a form of multi-employer bargaining in sectors that lack adequate industrial representation.

O’Connor twice refused to commit to release Labor’s entire industrial relations framework and the detail on multi-employer bargaining before the 2019 election.

Instead, he promised Labor would have “more to say” and noted it had released more policy than the Coalition but it was up to others to judge if it was “sufficiently … chapter and verse”.

O’Connor has been locked in negotiations with the ACTU secretary, Sally McManus, and the Labor leader, Bill Shorten, ahead of next week’s Labor national conference, with platform changes to respond to union demands to fix collective bargaining likely to be significant issues.

O’Connor accused larger employers of “outsourcing their labour to smaller employers – through franchises, subsidiaries and related corporate entities, subcontracting, independent contracting (both real and sham) and labour hire”.

“This practice means that it is less likely that a worker is employed by the economic decision-maker – their wages are effectively set by the head of the chain, not by their direct employer,” he said.

“It makes it harder for workers to collectively bargain, because although they may work at the same site or in the same business, it is not necessarily for the same employer.”

Labor has announced it will legislate so that employees of labour hire firms are paid the same as workers in the businesses they are placed in doing the same work.

O’Connor argued that labour hire, outsourcing and subcontracting “set up a situation where the only point of competitive tension in the industry is the cost of labour”.

“This means that employers who do negotiate better pay and conditions with their workers are vulnerable to being undercut by those who won’t.”

Workers are also vulnerable to “unscrupulous or greedy employers, for whom the temptation to underpay and exploit workers in order to make a profit seems to be irresistible”, he said.

O’Connor also noted that with union density of 15%, many Australian workers “do not have a bargaining representative to help them get a better deal or an advocate at their workplace to stand up for their rights”.

Labor has already made a number of announcements including to abolish the specialist registered organisation and construction union regulators, restore penalty rates and introduce a definition of casual worker.

O’Connor said Labor would consider “enhancing multi-employer bargaining”, which is currently in the Fair Work Act for low-paid industries but has never been utilised. He confirmed this would include consideration of expanding the right to strike.

O’Connor said in the speech that Scott Morrison’s “approach to stagnant wages is to sit back and hope that the market delivers”.

“But the market is not delivering, particularly for low- and middle-income earners.

“In contrast, Labor acknowledges that the problem with wages is real, is complex and requires positive action from government.”

Wage growth has recovered slightly to 2.1% after five years of wage stagnation, including a three-year low of pay increases of 1.9% on average in 2017.

O’Connor suggested Labor was open to setting the Fair Work Commission a long term minimum wage target – “a point which you want to get to in a certain time frame”. But he said Labor would have to be “responsible” and not set up an “inflexible” minimum wage pegged to 60% of the median income.

O’Connor said Labor would have “more to say” about awards, which are working in some industries but delivering “far below market [pay] rates” in some industries.

Australian Industry Group chief executive Innes Willox said it was in the interests of both businesses and their employees to set pay rates in agreements “that suit the needs of each business and its employees”.

“An industry bargaining system would be beneficial only for unions – not for employees, businesses or the broader community,” he said.

“Industry bargaining makes no sense in the Australian context because industry agreements would oust the operation of industry awards.”