"If, for example, a union is dominant in an industry and bargaining collective agreements with employers in the industry, then the standards identified in those agreements would be extended ... to workplaces within that industry that are not bargaining collective agreements," she said.
Yesterday, Ms Kelly conceded there was no real difference on the issue between Labour and the CTU.
"Obviously Labour consulted with us and I've made some speeches very much in line with this policy, so we're very pleased."
Business NZ boss Phil O'Reilly accepted that the Labour Party was not a puppet for the unions, but he added that unions were clearly a strong influence.
He said the proposed ISAs were technically different from the highly regulated, inflexible national awards system of the 1970s and 1980s, but claimed they would be effectively the same thing.
"If a group of employers see an ISA on the cards, they will themselves collectivise. They will want to make sure they are not disadvantaged.
"[Labour's policy] would impose minimum conditions on groups of employers in disparate markets, based not on the needs of the markets or customers, but a one-size-fits-all [approach to] wages and conditions."
Ms Fenton said ISAs would not apply to all sectors, because a threshold would apply.
"For example, for farm workers, there is no collective bargaining in place. Until a threshold of collective bargaining is met, there'd be no ISA."
Proposed ISAs would not necessarily bind all workers in a sector because unions and employers could negotiate collective contracts with different - possibly lesser - standards than in an ISA.
Small businesses could negotiate collective agreements independent of an ISA.
But Mr O'Reilly asked what union would undercut an ISA.
"In all my experience it's extremely rare for a union bargaining collectively to undermine the minimum rates of pay and conditions in a sector. In reality, whatever the [proposed Workplace] Commission says is the standard will be the minimum."
