New rules could see union officials banned

Union officials who break the law could be banned or face penalties of up to $200,000 under tough new reforms being considered.

At a preliminary hearing of the federal royal commission into trade union corruption and governance in Sydney on Thursday, Commissioner Dyson Heydon QC and senior counsel assisting Jeremy Stoljar SC both issued statements about the broad direction of the inquiry for 2015.

In his address, Mr Stoljar said law enforcement of unions needed to be ramped up.

There were "acute problems when it comes to enforcement of law", he told the commission.

"The Interim Report discusses many instances in which union officials have acted in defiance of the law," he said.

"No reasonable person could consider this a satisfactory state of affairs", Mr Stoljar said, adding that the problem was only with "some union officials".

He said one solution would be to increase penalties for union officials from the current maximum of $10,200, to those under the corporations law of a maximum $200,000.

He said "banning orders", which could disqualify someone from holding any office in a union, were another option.

It would be up to a court to determine the conditions and the length of any such ban on a union official, he said.

Mr Stoljar also flagged a potential crackdown on so-call union "slush funds", stricter rules around enterprise agreements that contained provisions benefiting unions, and placing greater "good faith" obligations on union officials.

A discussion paper on possible recommendations will be released in the next few weeks.

Public hearings for 2015 will commence on Monday.