Draft legislation was introduced into the ACT Legislative Assembly on Thursday that will prevent companies getting government work unless they have a local jobs code certificate.

The bill formalises the Barr government's memorandum of understanding with Unions ACT, in which the territory agreed not to award tenders to companies that did not comply with workplace safety laws, had underpaid workers or did not have cooperative industrial relations practices.

Workplace relations minister Rachel Stephen-Smith said that MoU would be phased out as the jobs code came into effect gradually from next January.

However she acknowledged the code would likely be controversial.

"The ACT government absolutely makes no apologies for using its purchasing power to protect workers rights, to ensure workers in companies that we contract with are treated fairly, that their rights are upheld and that they go home safe to their families at the end of every days," Ms Stephen Smith said.

However ACT Opposition industrial relations spokesman Andrew Wall said the red tape the code would place on businesses was unreasonable and would price small companies out of tendering for government work.

"If we want Canberra to be seen as a destination for business to come and work here effectively, we should be having an existing harmonisation of laws, not going it alone and circumventing federal laws simply to play politics in the industrial relations space because there’s a Labor government in this jurisdiction," Mr Wall said.

Mr Wall also expressed concerns the advisory committee that would oversee the implementation of the code could be stacked with union members.

Three spots on the committee will automatically go to the unions, while the minister will appoint the other three members.

Asked who those other members would be, Ms Stephen-Smith said they would represent "a range of interests that are relevant to the implementation of the code".

Pushed on whether business groups would be represented, she said that was her "expectation".

It is also unclear what standards companies will be required to comply with.

The actual job code will be set later via disallowable instrument, but cannot include requirements that are inconsistent with the Fair Work Act or other Commonwealth laws.

However the government has previously said the code may require companies to allow unions to take part in the induction of new employees.

Mr Wall said the code would be a "Trojan horse to let unions back into work places where they’ve been locked out under federal laws".

"What this is seeing is the pendulum swinging too far in the favour of union power, at the expense of those people who do take the risk, open opportunities and create employment in the first place," Mr Wall said.

However workers and unions say the changes are necessary to stop wage theft and exploitation.

United Voice secretary Lyndal Ryan said the recent example of the Nowra chef who was underpaid $200,000 showed why union protection was necessary.

“That problem might have been able to be fixed in two months, not two years," Ms Ryan said.

"Wage theft, sham contracting, threats of deportation and cash-in-hand payments have become a business model for some companies contracting for government work. These are the companies who want to keep their workers isolated and completely ignorant of their rights to maximise their own profits by cutting wages and conditions."

Cleaner Dorji Rinchen said he wanted all migrant workers to be introduced to their union when they began work in Australia.

"Most of the cleaners are from overseas and ... when they come here they don’t know their rights at work," Mr Rinchen said.

Former cleaner, now United Voice organiser Pema Choden said many people only joined the union after they had been taken advantage of.

"We don't want to meet the union as an accident, we want to be oriented, inducted about the union first and foremost for all the new arrivals in Australia so that they’re informed of their rights and entitlements and so they also know whose door to knock on when they confront issues in the workplace," Ms Choden said.

The bill was referred to an Assembly committee, which will report back at the end of September.