Trade union officials are using outlaw bikie gangs as hired muscle for debt collection in Victoria’s building industry, police say.
There is a "climate of fear" and victims or whistleblowers are too afraid to speak out, Victoria Police said in a submission to the Royal Commission into Trade Union Governance and Corruption last year.
Chief Commissioner Graham Ashton says police need stronger laws to tackle the problem and called for the state's building and construction industry to be monitored by a regulator to reduce criminal interference in the sector.
The CFMEU, on Friday, denied the allegations and said it was not the job of police to engage in party politics.
A spokeswoman for the union told AAP that Deputy Police Commissioner Stephen Fontana admitted he was wrong in saying there were links between the union and OMCGs when cross examined at the Royal Commission in 2014.
Victoria's building code was scrapped by the Andrews government last year, after an election promise to put the money toward whooping cough vaccinations instead.
"The issue with the state-based regime, that the former Liberal government set up, was that it duplicated the federal arrangements," Employment Minister Jacinta Allan told reporters on Friday.
The state's opposition says dumping the code allowed unions such as the CFMEU to get away with criminal behaviour.
"The compliance unit and code of conduct were making a real difference here in Victoria, in sending a strong signal that the CFMEU could not get away with this lawlessness on Victorian construction sites," shadow industrial relations spokesman Robert Clark said.
He called on Premier Daniel Andrews to throw his support behind re-establishment of the Australian Building and Construction Commissioner (ABCC).
"He needs to get on to Bill Shorten and his federal Labor colleagues and tell them to stop their opposition to that legislation," Mr Clark said.
The CFMEU's Victorian state secretary John Setka and his deputy Shaun Reardon were last month charged with blackmailing two executives from concrete supplier Boral, in an alleged bid to cause loss to construction giant Grocon.
Last week Commissioner Dyson Heydon said thugs and bullies were involved in unions around Australia and misconduct had taken place in every jurisdiction, except the Northern Territory.