The move comes after thousands of air passengers had their travel plans disrupted by a flash strike on Sunday.
The latest bout of industrial action was launched in protest against Netanyahu’s recent austerity budget.
Under Monday’s proposals, unions would have to give 60 days’ notice before launching a strike instead of the current 15 days.
Public service employees would be obliged to hold a secret ballot before taking industrial action.
“This project aims to prevent the triggering of strikes by the union syndicates who are imposing their own will on the majority of workers,” minister without portfolio Meir Shetreet – Netanyahu’s deputy – told Israeli radio.
Labour opposition leader Shimon Peres however warned against “draconian” legislation and said that the government must bear responsibility for the majority of strikes.
“The problem stems from the fact that Netanyahu treats the Histadrut (umbrella union movement) as an enemy and not as a partner”, said Peres.
Israel has been rocked by industrial action for the last two months and plans for a general strike were only averted by a court order.
Unions have been protesting an austere package unveiled in the recent budget which would see the government take control of state pension funds.