The federal government insists beefing up fines for trade unions involved in 'sympathy' strikes will benefit both business and consumers.
It has proposed lifting the maximum penalty for secondary boycotts from $750,000 to $10 million as part of broader competition law reform.
Labor supports all of the proposed changes except that measure, which it says is unreasonable and an industrial relations issue - not a matter of competition.
Shadow assistant treasurer Andrew Leigh told parliament the penalty was nearly 800 times higher than the $12,600 maximum for unprotected industrial action and would put Australia out of step with international best practice.
"The attack on unions through the massive increase in penalties for sympathy strikes doesn't make our economy more productive," Dr Leigh said.
The bill passed the lower house on Tuesday night, but Labor is likely to put forward amendments in the Senate.
Treasurer Scott Morrison argues the increase will align it with penalties for other breaches of the competition law.
He is hopeful the crossbench will support the "sensible" reforms.
"What the Labor party is seeking to do is maintain a special deal for secondary boycotts in competition law," Mr Morrison told parliament.
"They're happy to protect unions that want to go down this path at the expense of small businesses, workers, consumers and the wider economy."
Workers were customers and benefit from strong competition laws, he said.
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