Legislation to overhaul the controversial insurance program for workers injured on the job in the District of Columbia was pulled off the agenda for D.C. City Council action last night by its sponsor, Willie J. Hardy (D-Ward 7).

About 200 labor union members opposed to the bill, many of them wearing hard hats, crowded into the council chamber while an equal number milled on a street outside the District Building as Hardy made her announcement of a two-week delay.

Hardy was loudly booed from the audience as she entered the council chamber, moving Council Chairman Arrington Dixon to plead for order. Hardy's announcement that she was sidetracking the bill also provoked catcalls.

The union turnout was larger than usual because the council was holding an evening legislative session, which it does only once every two months. Most sessions are held in the daytime when citizens are at work.

Hardy said she was seeking a two-week delay in consideration because comments on the measure had not yet been received from Mayor Marion Barry.

Barry has been reported taking a position somewhere between the bill sponsored by Hardy, which is supported by the Greater Washington Board of Trade, and a rival bill sponsored by Wilhelmina J. Rolark (D-Ward 8), which is closer to the position adopted by organized labor, whose leaders favor continuation of the present law.

Business interests are seeking a reform of the present law on grounds that skyrocketing premiums for workers' compensation, resulting in part from high cash awards, are a burden that is driving many firms out of the city and making others noncompetitive. Union leaders object to cutbacks in worker benefits along with a proposal that would force injured workers to be treated by doctors chosen by their employers, not by themselves.

Because of Hardy's withdrawal of the bill, there was no debate or discussion of the measure.

On another matter, the council last night gave final approval by unanimous voice vote to a bill authorizing the mayor to grant a franchise to a private firm for the election of advertising-supported bus shelters on city street corners.

The shelters would be an addition to those erected by Metro. Shelters with advertising posters would be barred from low density residential neighborhoods and national monuments near the city center. The legeslation requires competitive negotiations with the mayor required to grant it to a firm with at least 50 percent local minority ownership.

The measure now goes to the mayor for his signature or veto, and if approved, to Congress for review before going into effect.

The council also voted preliminary approval to a bill requiring barrier-free access to the handicapped in buildings including hotels and apartments erected or renovated in the District of Columbia. Final action is slated in two weeks.