The report by former Federal Court judge Murray Wilcox also raises questions about interrogation powers available to the industry watchdog, the Australian Building and Construction Commission (ABCC).
Building industry employees can be jailed for up to six months if they refuse to cooperate with the ABCC, powers that unions say are draconian.
The government has said it will keep the ABCC until the end of January 2010, after which it will become a special division of the new industrial umpire, Fair Work Australia.
In his report, commissioned by the Rudd government earlier this year, Wilcox found that penalties imposed on participants in the building industry for taking industrial action were unfair in that they did not apply to other industries.
Under the Building and Construction Industry Improvement Act introduced in 2005, employees who engaged in "unlawful industrial action" could face fines of up to $6,000, while unions could be fined up to $110,000.
Unlawful industrial action, according to the legislation, refers to any action that is not undertaken within a collective bargaining period, or when an employee does not have reasonable concern for their health or safety.
Unions have complained that the legislation treats industrial action by building workers much more harshly than industrial action by other workers.
They say that includes the circumstances under which industrial action attracts penalties and the size of penalties.
"The building unions argue that (this) is discriminatory," Wilcox wrote in his report.
"They are correct, in the sense that (the legislation) imposes rules on participants in the building industry that do not apply to participants in other industries," Wilcox said.
The ACTU said on Thursday that the report confirmed that the former government's building industry watchdog discriminated against construction workers and infringed on their rights.
"This report confirms what construction workers and their unions have been saying about the unfair and discriminatory Howard government building industry laws and the ABCC," ACTU Secretary Jeff Lawrence said.
"The unprecedented coercive powers of the ABCC have no place in a modern society," he said.
"It is abhorrent that construction workers are treated like criminals by these laws and can face jail simply for observing the right to silence."
However, Wilcox also found that there had indeed been "a culture of lawlessness, by some union officers and employees, and supineness by some employers" in the years before the legislation and the ABCC were introduced.
The Australian Chamber of Commerce and Industry (ACCI) said it was this "culture of lawlessness" that the ABCC was established to tackle.
"During the period of the ABCC's existence, there have been significant improvements in the productivity performance of the building and construction industry and declining rates of industrial action," ACCI spokesman Greg Evans said.
"These gains benefit the Australian community and industry urges the Australian government to retain a tough cop on the beat so that these gains are not lost."
