The federal government will move to appoint an independent administrator to take over the embattled Construction, Forestry and Maritime Employees Union.
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Meanwhile the Australian Council of Trade Unions has suspended the construction and general division of the CFMEU.
Damning allegations about the union were made this week and the CFMEU's Victorian branch was placed into administration on Monday.
Workplace Relations Minister Tony Burke said the government would assist the Fair Work Commission in appointing administrators to the construction division of the CFMEU.
It comes after reports of the union's alleged links to organised crime, which were published by Nine newspapers.
Workplace Relations Minister Tony Burke said the CFMEU's reported actions were "abhorrent" and "intolerable".
"I said over the weekend that we would take action to address these issues and we are," he said.
ACTU secretary Sally McManus said members had resolved to suspend the construction and general division of the CFMEU until it could demonstrate it was a "well-functioning, clean union, free of any criminal elements".
East coast branches affected
Prime Minister Anthony Albanese said the union's east coast branches would be part of the independent administration.
"Queensland, NSW and Victoria. And that has an impact on South Australia and Tasmania, which are effectively run out of the Victorian branch," he said.
It is unclear whether the ACT branch would be affected, however Mr Burke said it would be up to Fair Work where the administration actions apply.
"I want to give them the full power to act in the public interest," he said.
The Fair Work Commission was unable to comment on whether the ACT would be included.
In a statement, Fair Work Commission general manager Murray Furlong said he was deeply concerned about the recent reports.
"Members of registered organisations deserve for their organisations to represent their interests in a lawful manner," he said.
Opposition Leader Peter Dutton has called for the CFMEU to be de-registered and for political donations from the union to be frozen.
Mr Burke said he had "no intention" of going down the path of de-registration as it would remove a layer of regulation and oversight.
When asked about de-registration of the CFMEU on Wednesday, Mr Albanese said "nothing will be taken off the table".
Govt could introduce legislation 'to remove barriers'
Mr Burke said the government would not hesitate to introduce legislation when Parliament returns "to remove any barriers to appointing administrators".
The federal government has also requested the Fair Work Ombudsman undertake a review of all enterprise agreements made by the construction division of the union that apply to the Victorian government's "Big Build" projects.
Mr Burke said he has also written to the AFP Commissioner to request an AFP investigation into the recent allegations and to prosecute any criminal breaches.
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The Master Builders Association welcomed the announcement, saying it was a significant move in addressing the serious allegations.
"It is also an important first step towards stamping out the toxic and ingrained culture within building unions of bullying, thuggery, and complete disregard for the law," a spokesperson said.