Mr Ramsay introduced a bill that will mean charities no longer need to be licensed in the ACT if they are registered with the Australian Charities and Not-for-Profits Commission. Mr Ramsay said the change removed red tape for charities, avoiding double licensing and reporting.

But Unions ACT secretary Alex White was outraged at the surprise move, saying he had been talking with Mr Ramsay and Greens Minister Shane Rattenbury since October last year about strengthening the licence.

He wanted to make it a condition that charities abide by the Fair Work Act, which would have allowed a licence to collect in the ACT to be withdrawn if a charity breached the Act.

"I'm very, very unhappy," Mr White said. "Gordon Ramsay is giving up on protecting the rights of charity collection workers."

Mr White said the vast bulk of collection workers for licensed charities were employed by marketing companies, which the unions accuse of engaging in "sham contracting", employing young people as contractors instead of employees.

"The levels of exploitation, wage-theft and bullying that charity collections workers experience are severe. This exploitation happens routinely in Canberra," Mr White said.

"Minister Ramsay has given a green light to unscrupulous, dodgy companies to continue to exploit vulnerable workers."

His bill had "gone behind the backs" of charity workers, and he hadn't had the courtesy to let anyone in the charity or union sectors know, Mr White said.

But Mr Ramsay said the bill would reduce administrative red tape, giving charities more time to support vulnerable households, while still leaving robust oversight in place through the national charities commission.

The government was committed to workers' rights and fair and legal pay. But the charity collection legislation "is not and has never been the appropriate vehicle for dealing with the employment arrangements of workers in this sector", he said.

Mr White said in a meeting this week he had been told the government would strengthen protections for charity workers. He called for the license change be be delayed until that had happened.