He said Mr Setka was"only part of the problem"the bill aimed to address,as the Victorian branch secretary was responsible for less than one per cent of the CFMMEU's 2190 contraventions of workplace laws in the last 15 years.
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Mr Setka,whose branch has donated $1 million to the ALP during his five years as secretary,warned Mr Albanese in June he would stop the donations if the Labor leader pushed to expel him-but did not respond when asked if this was still his position.
The union leader 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 throughallegations of domestic violence andcriticism of anti-violence campaigner Rosie Batty for eroding men's rights.
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The union leaderlaunched 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,and was due to front the party's national executive on Friday.
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.
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".
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"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]."
TheAustralia 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.
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.