The Federal Opposition has promised to make it impossible for an employer to make a staff member redundant in order to replace them with a cheaper worker.

Unions say an Industrial Relations Commission ruling has allowed the retailer Priceline to get rid of a worker who was earning $100,000 and replace him with a worker on $75,000.

Prime Minister John Howard says he is investigating and businesses should not use "operational reasons" as an excuse to simply get rid of someone on a higher salary and replace them with a cheaper employee.

Deputy Opposition Leader Julia Gillard says Labor would ban employers from doing what Priceline has done.

"We understand from time to time businesses need to make people genuinely redundant and that will continue to be able to occur," she said.

"But what we won't stand for is an unfairness where a worker today is sacked a worker tomorrow is engaged to do exactly the same work and that worker is earning less and the only reason for sacking someone is to save a few dollars."