"This country is too used to mass unemployment," Valls told parliament as many members booed and several walked out of the chamber.
He said a "coalition of immobility" had stymied the reforms, which aim at reducing unemployment by freeing up the job market -- notably by making it easier for employers to hire and fire staff.
It was the second time the embattled government used the so-called 49-3 provision for this package of reforms, as it could not count on the votes of legislators on the Socialist Party's left flank.
The labour bill now continues on its bicameral shuttle.
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It returns to the Senate before its definitive adoption by the lower house on July 22 -- when Valls is expected to again resort to the 49-3 manoeuvre for the final step.
In the streets meanwhile, protesters staged their 12th show of opposition to the controversial package, seen as too pro-business and a threat to cherished workers' rights.
However the numbers were down from previous protests.
Demonstrations peaked on March 31 at 390,000 people across the country, according to official figures, while the unions claim the figure was 1.2 million.
Unemployment in France stands at a stubborn 10 percent overall, but for young people the figure is closer to 25 percent.
Union- and student-backed demonstrations against the reforms began nearly four months ago, with some protests descending into violence.
MPs have 24 hours to decide whether to call a vote of no confidence in Valls' government, which the rightwing opposition has already ruled out.
Today the head of the Republicans' parliamentary group, Christian Jacob, said the centre-right party would not call such a vote this time around. Dozens were arrested.