Baker Armstrong Smith has resigned as director of labor relations at the Department of Housing and Urban Development following allegations that he sharply curbed HUD's enforcement of federal wage laws and improperly dismissed employes because of their union backgrounds.

Smith was to testify under subpoena this morning before the Merit Systems Protection Board's office of special counsel. The office is investigating allegations that Smith fired and transferred a number of subordinates because of what an earlier merit board ruling called his "anti-union animus."

Smith, 35, was unavailable for comment yesterday. A HUD spokesman said that Smith submitted his resignation June 16 and that Secretary Samuel R. Pierce Jr. accepted it last Friday.

The Washington Post reported June 7 that in three-fourths of such cases referred to his office, Smith overruled recommendations by local HUD officials that contractors be fined for violating federal wage laws. Most cases involved charges that contractors had failed to pay overtime or minimum wages or had submitted false payroll records.

In one four-month period in 1981, according to HUD records, Smith waived more than $53,000 in fines proposed by his staff, saying the contractors' errors were unintentional.

Smith formerly was executive director of the Center for National Labor Policy, which describes its purpose as providing "free legal aid to the victims of union power."

He recently has become the subject of several inquiries. A House subcommittee headed by Rep. George Miller (D-Calif.) has obtained many of Smith's records as part of a broad investigation into his enforcement of wage laws.

At Miller's request, HUD's inspector general has reopened a probe into allegations that Smith arranged official trips to Chicago, Pittsburgh and San Francisco after signing up for bar association and legal fraternity meetings in those cities.

Hearing officers at the merit board recently ordered two senior HUD employes reinstated, saying that Smith dismissed them because of their union ties and that Smith's testimony was "evasive." If the board's special counsel finds that Smith violated civil service rules, he can recommend that Smith be suspended, fired or barred from federal service for up to five years.