Hundreds of workers at a big Australian company have thrown their support behind a twice-rejected deal that provides below-inflation wage rises and lets the employer pay new staff nearly 20 per cent less.

At Coates Hire, the nation's largest equipment-hire business, a workforce of 900 fitters, electricians, truck drivers and yard staff had strongly rejected two earlier versions of the agreement in previous ballots.

But ahead of the latest vote last week, the company warned it would consider a move to rip up the existing pay deal altogether if workers turned down its "best and final offer". That meant staff risked reverting to the industry award's vastly inferior minimum pay and conditions.

Australian Council of Trade Unions secretary Sally McManus said many major employers had begun adopting this hostile "take it or leave it" bargaining tactic in recent years, which, she claimed, showed the system was stacked against working people.

"The laws are just so broken if an employer can say to anyone on an agreement that either you accept our offer or we cut your pay," she said.

"It was never like this before, but this is the situation we've got in Australia ... every single worker who is on an agreement has to worry about this now."

Ms McManus urged the Turnbull government to urgently wind back employers' bargaining power, by restricting their ability to terminate deals.

"It doesn't pass the pub test of being fair, at any pub, anywhere, right across Australia, "she said, "and, on that basis, they should fix it."

Agreement supported

Coates announced on Tuesday that 65 per cent of voting employees had approved of the new agreement, after just a third had supported it in the previous ballot.

The company's new agreement contains a $1000 sign-on bonus, two 1.5 per cent pay rises in 2018 and 2019, and improved entitlements for domestic violence leave and paid parental leave.

But the offer, which follows a two-year pay freeze, includes the introduction of a two-tiered pay system in which all new employees will receive 18 per cent less pay, one week less in annual leave and reduced penalty rates, according to a union analysis.

"We'd like to thank all our employees who participated in the vote and those who voted in favour of the agreement," Coates Hire human resources general manager Graham Beal said.

"They have secured a fair deal and understood the challenges facing the business and the wider economy."

The equipment-hire business had been exposed to the resources downturn and had suffered considerable losses and accumulated a sizeable debt, a company spokesman said.

And, although it recently posted a $15 million half-yearly profit, it was still not enough for a company of its size to "reinvest or grow the business", he said.

The Australian Industry Group head of workplace relations, Stephen Smith, said it was "not uncommon" for employers to include provisions in agreements that "grandfather" certain benefits for existing staff.

The Coates deal comes as Australian wage growth remains stuck at record lows, with workers' annual pay rising a paltry 1.9 per cent, slower than during the Global Financial Crisis.

No choice for workers

The Australian Manufacturing Workers Union said the ballot result was "not surprising", given workers feared the prospect of having their union conditions torn up and reverting to the rates of the manufacturing industry award instead.

"It's not really a choice when you are threatened with a 41 per cent pay cut," national secretary Glenn Thompson said. "It's not a real negotiation if one side holds all the power."

For Coates' manufacturing workers, a base-rate fitter would go from $34.70 an hour to $20.61 an hour, union officials said.

It is understood the company disputes the claim that a reversion to the award would amount to an overall 41 per cent cut.

The successful ballot brings to an end two years between Coates Hire and its workforce over the terms of a new industrial agreement.

Coates Hire operates around Australia, as well as in Indonesia and the United Kingdom. It is co-owned by investment firm Seven Group Holdings and private equity outfit the Carlyle Group.