The head of the nation's largest rail union yesterday denounced Conrail's proposal to save at least $200 million a year this year by labor concessions in this year's round of collective bargaining.

"We don't think that's necessary," United Tansportation Union President Fred Harlin said yesterday. "We do not think our work rules have to be . . . abandoned." Hardin also opposed cutting Conrails's 17,000-mile freight system.

Instead, he called for a one- to two-year study of Conrail by a consultant the UTU already has hired to determine where and if cuts in the Conrail system should be made.

Consolidated Rail Corp., the federally subsidized freight railroad formed in 1976 from the Penn Central and other bankrupt eastern lines, is facing an end to its federal subsidies by 1983.

In a report to Congress on Friday, Conrail complained that it must pay 56 cents out of every dollar in revenue for labor costs compared with 48 cents for an industry average, a differential that amounts to more than $300 million a year.

"Conrail is unable to perceive any scenario within which Conrail, or any substitute carrier, can continue a rail system of Conrail's present scale unless labor costs as a percentage of revenues are reduced," the report said.