First use appears c. 1473. The idiomatic second sense came about due to Hamlet’s monologue. See cite from sense 1 below.

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piece of work (plural pieces of work)

1. A product or manufactured article, especially an item of art or craft.
   • c. 1599–1602 (date written), William Shakespeare, “The Tragedie of Hamlet, Prince of Denmarke”, in Mr. William Shakespeares Comedies, Histories, & Tragedies […] (First Folio), London: […] Isaac Iaggard, and Ed[ward] Blount, published 1623, →OCLC, [Act II, scene ii]:

     What a piece of work is a man! how noble in reason!
     how infinite in faculty!

   • 1996, David Ansen "The Killer And The Nun (film review)," Newsweek, 8 Jan.,

     “Dead Man Walking” is a powerful and intelligent piece of work.

2. (idiomatic, often derogatory) A person who has a strong and unusual personality, especially one with seriously unpleasant character flaws.
   • 1911, Gabrielle Emilie Jackson, Peggy Stewart at home‎^[1], page 259:

     Ugh! She's a piece of work.
     "A rotten, bad piece, I'd call it," answered Wheedles under his breath.

   • 1991 April 29, “Music: The Ballads Of Shirley Horn”, in Newsweek:

     She built a reputation as a piece of work; if she didn't like a crowd, sometimes she'd walk off stage in midset and call a cab home.

   • 2007 November 25, Elizabeth Keenan, “Australia's New Order”, in Time:

     Known as Pixie for his fresh looks, and Dr Death for his cold stare of disapproval, Rudd was said to have few friends in Canberra. Former Labor leaders Paul Keating and Mark Latham described him, respectively, as "a menace" and "a terrible piece of work".

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• Oxford English Dictionary, 2nd ed., 1989.