Prime Minister Anthony Albanese announced at Labor's national conference it would create a federal Fair Work Court.
The court would operate alongside the Fair Work Commission, headed up by expert judges in the field.
"It will resolve disputes faster and at lower costs for both workers and employers," Mr Albanese told the conference.
"Good for workers, good for businesses, good for the country and we're going to do that."
It will be the first federal industrial relations court since a previous one was abolished by the Howard government in 1997.
Workplace Minister Amanda Rishworth said she envisaged underpayment matters would go to the court for resolution, as well as bargaining matters.
However, details about how the court would interact with the Fair Work Commission or who would serve on the body were yet to be decided.
"There is a lot of work to get right, but I think what we've outlined is not just an idea; it is a concrete proposal that we will take forward," she told reporters in Adelaide.
"We want to see a very specialised expertise sitting in the Fair Work Court, so that they can effectively deal with enforcing the rights of workers."
The minister did not say when she hoped the court would be up and running.
"We don't want to see unintended consequences, and I've committed to engage with both industry, businesses," Ms Rishworth said.
The announcement was met with criticism from the Business Council of Australia, with chief executive Bran Black saying it would extra layers of red tape.
"We support faster, simpler and more affordable workplace resolutions. But this announcement has the potential to yet again add another layer of process without any real practical benefit," he said.
"This complexity is also taking workplaces back to the old days of more combative disputes, rather than encouraging the co-operative workplaces for which we should be striving."
ACTU secretary Sally McManus said the court would make solving workplace disputes easier.
"Justice delayed is justice denied. If your boss owes you money, you should not have to wait one or even two years to get it back," she said.
"Too many employers can drag out court cases and grind workers into the dust while making them wait to get a fair hearing."
6°C