Employers have angrily rejected union demands to expand bargaining from the workplace to the industry level, warning it is a recipe for them to “make unreasonable claims and cripple whole industries”.

On Thursday the Australian Council of Trade Unions released a suite of policies to increase wages, including allowing protected industrial action to seek uniform conditions across industries and supply chains rather than bargaining workplace by workplace.

The secretary of the ACTU, Sally McManus, has flagged industry-level bargaining as the movement’s key demand since she took over her role in 2017 and warned at the National Press Club in March that enterprise bargaining was “smothering” wage growth.

The Australian Industry Group chief executive, Innes Willox, said the ACTU had “given up on decades of community consensus that Australia needs to have a strong economy and a workplace relations system that does not impose major barriers on job growth”.

“The ACTU’s latest proposals would destroy jobs and the competitiveness of Australian businesses,” he said.

“If the ACTU got its way, unions would be able to make unreasonable claims and cripple whole industries and supply chains until employers capitulated.”

Willox said Australia would “return to the bad old days of the 1960s and 70s when industrial action was rife”.

Enterprise-level bargaining has been in place since 1993 and even the Labor government’s Fair Work Act does not allow workers to strike for uniform conditions across industries.

Industrial action is at historic lows in Australia and wages have stagnated. Figures released in August show that in the past year wages grew by a record low 1.9%. Australia has recorded 20 consecutive quarters of falling wage growth for private sector workers.

Willox said it was “a joke” that the ACTU “wants us all to trust that militant unions would only very rarely use the new powers”.

Anthony Forsyth, a labour law academic at RMIT university, told Guardian Australia that while employers would be concerned about the potential for “a big upsurge in industrial action” he questioned whether the proposed changes “will make a big practical difference”.

He noted the decreasing membership of unions, suggesting that even with increased legal rights there is a “disinclination to participate” in collective action.

Forsyth said it may be time to “revisit the concept of bargaining being limited to the enterprise” due to changes in the workforce, including increasing use of labour hire and franchising.

While not endorsing industry-level bargaining, Forsyth suggested that where labour hire employees work alongside direct employees for long periods of time it was arguable they should be covered by the same enterprise agreement.

The Australian Chamber of Commerce and Industry said the ACTU policy would result in “the law of the jungle” governing Australian industrial relations.

“The ACTU calls this a blueprint to give Australia a pay rise,” the statement said. “In reality it’s a blueprint for strikes and increased union power at the expense of jobs – unless wage increases are affordable one person’s pay rise will cost another person their job.

“We call on unions to work with business to fix the system, not destroy it.”

Despite the employer fury, Labor has shown some willingness to shift towards industry-level bargaining, particularly for low-paid workers and to achieve gender pay equity.

The workplace relations minister, Craig Laundy, warned that strikes were 40 times higher in the 1970s, and similar levels of disputation could return if the “ACTU/Labor plan becomes a reality”.

“Labor needs to come clean and declare which elements of the ACTU’s destructive blueprint they will inflict on Australia if elected,” he said.

The ACTU suggested a special pay equity panel should be set up on the Fair Work Commission that is “dedicated to achieving equal pay for women”.

It also wants changes to awards, the safety net of minimum conditions for 2.3 million workers. It warned there was a widening gap between award conditions and enterprise agreements, leading to a trend of employers seeking to have collective agreements terminated.

The ACTU’s other demands include reversing penalty rate cuts made by the Fair Work Commission in the retail and hospitality industries and calls to make the minimum wage a “living wage” of 60% of average weekly earnings.