Small business groups are calling for the right to sack workers who refuse to get a COVID-19 vaccination when one becomes available in Australia.

The federal government announced on Wednesday it had signed a letter of intent with British drug company AstraZeneca, which is working with Oxford University on a promising coronavirus vaccine trial that could be rolled out early next year.

Under the deal, Australia would make and supply the vaccine and provide it free to all Australians, but authorities say 95 per cent of the population would need to be vaccinated for a national immunisation program to be effective.

The Council of Small Business Organisations Australia has issued a proposal that includes changing the law to protect employers from legal action.

“If one of my staff members says, ‘no, I’m against it’, then I’m going to have to say, I’m sorry you are a threat to my business,” Council CEO Peter Strong told 7NEWS.

“If you don’t sack them, you don’t have a business, especially if you’re in a high contact area where you’ve got a lot of customers.”

“It’s not discrimination, that’s a business decision.”