Controversial union leader John Setka has resigned from the Labor Party and withdrawn his appeal against a Supreme Court decision permitting his expulsion.
Labor leader Anthony Albanese told reporters in Canberra on Wednesday that Mr Setka's decision was "a good outcome" for the ALP that "allows us to draw the line under these issues and to confront a government that attacks workers' rights".
But the development is unlikely to halt the passage of the Coalition government's union-busting Ensuring Integrity Bill, with key crossbench senator Jacqui Lambie remaining unmoved.
Senator Lambie said her position remained unchanged and that she would vote for the bill unless Mr Setka also stepped down as secretary of the Construction Forestry Maritime Mining Energy Union's Victorian construction branch.
Mr Setka said in a statement that he had resigned from the ALP because he could not continue to be a member "while Anthony Albanese is its leader", accusing the Opposition Leader of using his family troubles "for political gain" and failing workers by supporting the government's free trade deals.
"Under his leadership, the Labor Party has lost its spine. Worse still, it is in danger of losing its soul," he said.
Mr Albanese moved to get rid of Mr Setka earlier this year for bringing the party into disrepute, including through allegations of domestic violence and criticism of anti-violence campaigner Rosie Batty for eroding men's rights.
The union leader launched an appeal earlier this month against the Supreme Court's ruling that it did not have jurisdiction to stop the ALP from revoking his party membership.
Mr Setka accused Labor of being "missing in action" in the fight against the Ensuring Integrity Bill, which if passed will make it easier to deregister law-breaking unions and ban officials.
"This bill undermines the fundamental democratic right of union members to elect their leaders, handing power to the government and its big business mates to have union officials removed and unions shut down for even the most minor or technical breaches of workplace laws," he said.
Industrial Relations Minister Christian Porter has seized on the Setka controversy in support of the bill, which will go to a vote after a Senate committee reports later this month.
Mr Albanese said the Labor party would "continue to stand up for the rights of working people and we will not allow ourselves to be distracted from that task by the actions of any individual".
"The fact is that trade unions have an important role to play in our democracy and in civil society. I will stand up for the rights of trade unions, but I'll also lead a Labor Party," he said.
"Mr Setka's removal as a member of the Australian Labor Party removes that opportunity for the government ... to single out any one individual and use that as an excuse [to attack workers]."
The Australia Federal Police last month launched an investigation into comments by Mr Setka, which Senator Lambie and her fellow crossbenchers from Centre Alliance - Rex Patrick and Stirling Griff - interpreted as threats aimed at swaying their votes.
Mr Setka, whose branch has donated millions of dollars to the Labor party in recent years, has told Mr Albanese it will not make any further donations.
The union leader was placed on a one-year good behaviour bond in June after pleading guilty to harassing his wife and breaching a family violence court order.
He later downplayed the conviction as a "few bad text messages" between a husband and his wife.