Unions worried by NZ First's 'dominance' in Jacinda Ardern's Government

Labour is under fire from the most unlikely of critics - its staunch allies, the unions, are raising concerns about the rising dominance of New Zealand First.

Two of the biggest unions, FIRST Union and the Council of Trade Unions (CTU), fear the Government's employment law reforms could be hijacked by Winston Peters.

The Labour Party and the unions were bedfellows from the beginning, which is why Wednesday's comments from FIRST Union's Robert Reid are so surprisingly scathing.

"We are a bit worried in the union that the dominance on a number of issues that is coming from New Zealand First," he told The AM Show.

CTU is also worried, concerned New Zealand First will hijack planned employment law changes.

"It's a real concern if Labour, who stand for working people, are having trouble with their coalition partner on this," president Richard Wagstaff told Newshub.

The Prime Minister dismissed his comments, saying the unions "shouldn't be concerned by that".

The employment law reforms are at the core of Labour and union values. National hates the reforms, while New Zealand First initially supported them at Cabinet but has since suggested it might not. It has also said the bill is a "work in progress".

Mr Peters denied plans to undermine the legislation, and dismissed the idea as "rubbish".

"Of course all these bills before Parliament are works in progress."

Self-proclaimed champion of the regions, NZ First MP Shane Jones, has been openly critical of the bill and its impact on regional businesses.

"We debate a number of issues - this is one of many," Jacinda Ardern told Newshub.

"We have a good robust process for each, and I think we've been successful in navigating all of them."

That's not really true, because New Zealand First railroaded Labour's plans to repeal the three strikes law and put the brakes on its policy to double the refugee quota.

When asked if he thinks the tail is wagging the dog in this coalition, he said NZ First's recent actions suggest they're "trying to get as much out of it as they can".

In 2017, an election year, the unions donated $260,000 to Labour - and they have power in the party, with affiliated unions getting 20 percent of votes that decide the party leadership.

Being so critical of Labour is highly unusual for the unions.

National thinks New Zealand First might be all talk, threatening to undermine the bill to get some small concessions.

But even if that's the case, that's a lot of power to wield with a simple threat - which speaks volumes about the power dynamic in government.