Protesters who disrupt workplaces in Tasmania will no longer face mandatory jail under legislation changes approved by Tasmania's Upper House.

The Legislative Council voted to scrap the measure, which was a major plank of the Government's anti-protest bill.

The Government had proposed mandatory three-month jail sentences for repeat offenders, which was one of the most contentious parts of the legislation.

The Leader of Government Business, Vanessa Goodwin, backed down and said the Government would trade mandatory sentences for increased maximum penalties.

"We do support this reluctantly if it comes to the crunch," she said.

Maximum jail terms were extended from two to four years, but courts were left with discretion.

The maximum penalty for repeat protesters has doubled from two to four years' jail.

Ms Goodwin indicated the changes may be reviewed.

"If we find ourselves down the track in the situation where the penalties handed down are found to be inadequate, we could come back and revisit these penalty provisions," she said.

Launceston independent Rosemary Armitage was influential in removing the minimum penalties.

"Just because I don't support mandatory sentences doesn't mean I don't support businesses in this state," she said.

The independent-dominated Upper House will now consider the amended legislation before a third reading vote.

The Government has indicated it will support the heavily amended bill when it returns to the Lower House later this month.

Bill's passage 'historic moment of worker rights'

Resources Minister Paul Harriss described the bill's passage as a "historic moment in the history of worker rights".

Mr Harriss said it provided businesses with specific protections from "radical protesters seeking to make their point by destroying livelihoods."

He was disappointed mandatory sentences were removed but the doubling of maximum penalties for repeat offenders from two to four years would send a strong message.

The former MLC said the changes did not detract from the bill's core purpose.

"There is still a very, very powerful and strong message."

But his replacement in the seat of Huon, Robert Armstrong, likened the amended bill to a shark with no teeth.

"I think people need to take responsibilities for their actions."

The Government's push to crackdown on protesters was widely condemned in the community and was criticised by United Nations experts.

Last month it watered down the bill to include just five industries, including forestry and mining.

Political opponents claimed the bill was barely recognisable from when it cleared the Lower House a few months ago.

Unions Tasmania's Steve Walsh still feared the laws could harm workers engaged in legitimate workplace disputes.

"It raises more doubts in our mind about workers who want to take industrial action that may not be protected, but if there's an issue in their workplace they can conceivably be caught up in this legislation," he said.

But the Law Society Matthew Verney welcomed the amendments.

"We have strong reservations about the bill, but our strongest reservation was always about the inclusion of mandatory sentencing, both fines and prison sentences," he said.

"The bill is still flawed but at least it's an improvement on what it was."