Unions Tasmania believes proposed legislation regarding union operations before the Senate will affect Tasmanian members from pursuing increased pay.
The House of Representatives in July passed a bill which could see a union deregistered if it is was deemed to be in breach of industrial laws or had taken obstructive unprotected industrial action.
Union officials could face bans for misconduct.
Unions Tasmania state secretary Jessica Munday in a parliamentary submission said the bill gave politicians and business "unprecedented rights" to shut unions down which in turn would lead to a prevention of workers banding together to improve their wages and conditions.
"The bill threatens the rights of Tasmanian union members to elect leaders who will pursue fair wage rises so their pay keeps rising as living costs increase," she said.
"The bill threatens to discourage union members from involving themselves in the administration of their unions.
"Members should be encouraged to involve themselves in the running of their unions to ensure that they continue to truly reflect the voice of the workers they represent."
The Attorney-General's Department submitted the bill was based on three recommendations from the Royal Commission into trade union governance and corruption.
It said the inquiry found the regulatory framework around union disqualification was insufficient.
The department said the bill did not limit the right to take protected industrial action or the right to organise
The Senate is expected to vote on the proposed legislation in late October.