Union leaders expect the Melbourne rally – marching from Trades Hall in Carlton to Federation Square – to draw among the biggest crowds in the country.

Staging simultaneous protests in all capital cities and several towns, unions hope to build on the backlash against a contentious review of Australia's workplace relations system promised by the federal government. The Productivity Commission is now preparing to weigh reforms to the minimum wage, penalty rates and workplace flexibility.

Government ministers have appealed to the Australian Council of Trade Unions not to run a scare campaign, accusing unions of misleading their membership about plans to alter wages and conditions.

"The government will leave the responsibility of setting modern awards including penalty rates and the minimum wage to the Fair Work Commission," Employment Minister Eric Abetz said. "The ACTU should engage responsibly with these inquiries and not engage in campaigns of distraction."

But ACTU secretary Dave Oliver said workers were deeply distressed by the government's proposed cuts to healthcare and higher education, and would not be fooled by claims that radical reforms such as slashing penalty rates were off the table.

"Not a day goes by when a government backbencher or business [owner] is not speaking about penalty rates," he said. "The government is going after a whole lot of matters that could see a reduction in people's pay and everything is up for grabs."

Employer groups and the building industry watchdog have issued stern warnings that anyone planning to unlawfully take part in strike action on Wednesday faced fines of more than $10,000.

Fair Work Building and Construction director Nigel Hadgkiss said workers who attend needed to obtain their bosses' permission for leave, and warned employers not to pay workers for any time spent on strike. Mr Hadgkiss said his agency would not hesitate to bring people before the court.

"Attending and participating in rallies is an Australian democratic right," he said. "All I urge people in the construction industry to do is comply with the law when doing so."

Construction, Forestry, Mining and Energy Union state secretary John Setka said scores of construction workers would down tools to attend the protest.

"The Abbott government has attempted to justify its ideological agenda by attacking construction workers," Mr Setka said. "So we expect a large number of CFMEU members to come out to let him know that he and his big business mates are in for a fight."

One of the nation's largest unions, the Australian Nursing and Midwifery Federation, has called on its members to turn up in force and "send a strong message" to the federal government.

"We will vigorously fight any attempt to remove penalty rates from hard-working nurses and midwives," Victorian secretary Lisa Fitzpatrick said.

According to the union, half of all shifts worked by hospital nurses are penalty shifts. Ms Fitzpatrick said a grade 2 nurse stood to lose $380 a week if the existing penalty rate system was  scrapped.

The "day of action" marks the launch of the ACTU's new effort to oust the federal Coalition from government. It will revive powerful tactics used in the run-up to last year's Victorian state election of saturating marginal seats with union members including teachers, nurses and paramedics who talk directly to voters about political issues affecting their workplaces.