The implosion of the Victorian branch of the CFMEU following revelations of criminal activity has resulted in it being placed into administration by the union’s federal executive.

The state branch of one of Australia’s most influential and largest unions must also face referrals to police and anti-corruption watchdogs, and the threat of deregistration by the federal government.

The investigation

John Setka, the Victorian CFMEU branch’s long-serving and controversial secretary, stood down late last week because of “false accusations” that were made in a 60 Minutes expose on Sunday.

A combined investigation by The Age, 60 Minutes and the Australian Financial Review reported that senior bikie members and criminals were “parachuted into lucrative union roles” within Victoria’s CFMEU branch.

It alleged that CFMEU officials had advised building companies to employ sub-contractors controlled by bikie gangs and to retain underworld figures to handle industry and union disputes.

John Setka quit the CFMEU after questions about his role in the hiring of underworld figures within the union’s Victorian branch. Photo: AAP

What happens now?

The CMFEU’s national executive has placed the Victorian branch into administration, with national secretary Zach Smith saying the organisation “has zero tolerance for criminality and anyone found to have engaged in criminal conduct”.

“There are corporates and right-wing politicians who want our union to go away and they’re not motivated by any actual ethical concerns. They just don’t believe blue-collar workers deserve decent pay or proper safety standards on site,” he said.

“The national office will be uncompromising in cleaning up whatever wrongdoing we find because we know that blue-collar workers depend on our union being strong and effective.”

Criminal referrals

Victorian Premier Jacinta Allen confirmed on Monday that she had written to police and Victoria’s anti-corruption commission to investigate any criminal links inside the CFMEU.

She also said that she has requested that the Victorian Labor Party suspend the construction division and bar all political donations from the union.

“What we have seen here in recent days isn’t unionism,” she said.

“The union itself has acknowledged that it needs to fix its conduct and it shouldn’t have anything to do with the Victorian branch of the Labor Party until it does.”

The Australian Council of Trade Unions (ACTU) has called for the standing down of those subject to criminal allegations while the investigations occur.

“We also call on the CFMEU to take all necessary steps to rid their union of any and all criminal elements,” the ACTU said in a statement.

“A meeting of the ACTU executive will be held on Wednesday to consider these matters.”

What would deregistration mean?

Federal Workplace Relations Minister Tony Burke flagged that he would consider deregistering the union when he appeared on ABC TV’s Insiders on Sunday.

“I’m making sure the advice to me puts everything on the table with a very clear signal to the union about what’s expected. If they don’t act, I will,” Burke said.

“People need to know that the criminal element needs to be gone, needs to be gone very quickly and I am ready to act.”

The move would have historical precedent, with the Builders Labourers Federation (BLF) being deregistered by the Hawke government after a royal commission into union corruption and its federal secretary being jailed for corruption.

When the BLF was deregistered, other unions cannibalised its membership, which would be a distinct possibility for CFMEU’s thousands of Victorian members.

The BLF continued to exist in Queensland only, before merging with the CFMEU in 2013.