The workers' compensation scheme amendments were among reforms that also gave Deputy Premier Jarrod Bleijie the power to stop public servants from striking.
Under the WorkCover changes, employees will need to show their job was the "major significant contributing factor" in a psychological injury claim.
Mr Bleijie said it brought Queensland into line with other states, claiming the proposed change would save small business $1.46 billion annually.
Psychological injury claims had increased by almost 268 per cent in the past decade and premiums were set to skyrocket by 26 per cent in the next five years without action, he said.
The Queensland Resources Council said psychological injury claims had become more complex and costly.
"Workers injured at work should receive appropriate support to recover and return to work, but the scheme also needs a clear and evidence-based connection between work and compensable injury," council CEO Janette Hewson said in a statement.
However the United Workers Union, which represents ambulance officers, described the changes as an "underhanded attack".
It removed rights of ambulance officers and other hospital workers to receive WorkCover despite being more likely to suffer from trauma and psychological injuries, it said.
"For the paramedic haunted by a horrific call-out, or the ambulance officer lying awake after a traumatic shift, she's been delivered a fresh battle just to get help," the union's Fiona Scanlon said.
The proposed changes were part of sweeping reforms introduced on Wednesday night following an independent review of the state's industrial relations laws.
The review's report made 104 recommendations, with 75 accepted in full by the state government.
Under the proposed reforms, Mr Bleijie would be able to terminate protected industrial action in certain circumstances.
He cited earlier teacher strikes that occurred during school exam weeks as an example that would be considered for termination.
Under the changes, Mr Bleijie could terminate protected industrial action if he was satisfied it would endanger the population, cause significant state economy damage or was "contrary to the public interest".
The Queensland Council of Unions said it would strip public sector workers' bargaining rights.
"It's the work of a deputy premier drunk with power," it said in a statement.
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