The Morrison government will consider deregistering the CFMMEU after Victorian secretary John Setka confirmed he will not quit, even if he is convicted of criminal charges of harassing a woman.

Unions are bracing for an all-out assault on the labour movement in the wake of this week’s Setka drama.

Tasmanian Senator Jacqui Lambie has previously called for deregistration, meaning the Coalition could need just two more votes in the Senate to deregister the controversial construction union.

Another option would be to revive the “fit and proper” person test, which would prohibit Mr Setka, if he is convicted, from holding the union role.

Flanked by his wife Emma Walters on Wednesday, a defiant Mr Sekta said he would not resign from his $200,000-a-year job leading the Construction Forestry Mining Maritime and Energy Union in Victoria and Tasmania.

“There’s no reason for me to resign,” Mr Setka told a media conference in Melbourne.

“I represent CFMMEU members, right? They employ me. They’re my bosses. If people want to expel me out of the Labor Party over false accusations then, so be it.”

Mr Setka’s ALP membership was suspended on Tuesday and federal party leader Anthony Albanese has said he will move to expel the union boss after reports he disparaged the work of anti-violence campaigner Rosie Batty.

He also faces charges of having used a carriage service to harass a woman. Mr Setka has indicated he will plead guilty to those charges, after a plea deal with Victoria Police.

ACTU secretary Sally McManus faces a major leadership test after the embattled Mr Setka signalled his determination to retain his job.

A statement from ACTU secretary Sally McManus on Wednesday afternoon.

The powerful CFMMEU was one of the biggest donors to the ACTU’s Change The Rules election campaign, led by Ms McManus. It is estimated to have cost up to $25 million.

“I’ve never seen a greater gift presented to the Libs to go after deregistration and to hit the broader movement as collateral,” a union source said.

Prime Minister Scott Morrison first raised the prospect of deregistering the CFMMEU in September 2018, after Mr Setka used his children on Father’s Day to send an offensive message to the Australian Building and Construction Commission. The idea was quickly shot down by the cross bench.

“The CFMEU has behaved under John Setka like a bunch of thugs, and to involve children in that, I think, is one of the ugliest things I’ve seen,” Mr Morrison said last year.

Several years ago, Senator Lambie called for the union to be deregistered.

“If the Abbott government was serious about tackling crime and corruption in the building and construction industry and lowering costs, they would have moved very quickly to deregister the CFMEU – and perhaps other unions,” she said.

The government is expected to use the Setka issue to revive laws that union leaders must meet a “fit and proper” person test.

In NSW, police have charged assistant CFMMEU secretary Michael Greenfield with buying cocaine from two union organisers. The three NSW officials remain, like Mr Setka, employed by the union as the legal cases play out.

A defiant Mr Setka said he could see no reason to quit as CFMMEU secretary. Photo: AAP

Mr Albanese will bring a motion to expel Mr Setka from the Labor Party at its next executive meeting. He has stressed that move does not relate to the criminal charges, which allows the party to act before Mr Setka’s next court appearance in late June.

“What I said about Rosie Batty … Well, I just made reference to what legal people had sort of said in regards to laws and that was it,” Mr Setka said on Wednesday

“There was no denigration of Rosie Batty whatsoever. And whoever says that should be ashamed of themselves.”

However, the question of Mr Sekta’s ongoing employment as the Victorian CFMMEU secretary is another matter.

If he refuses to quit, the only option is to charge him with bringing the union into disrepute.

The ACTU and Ms McManus would then come under pressure to back the CFMMEU to remove Mr Sekta.

Mr Setka conceded he faced criticism from his union, where he is understood to have fallen out with deputy Shaun Reardon, and the broader Labor movement.

“Our union is made up of a whole heap of different divisions; I’m the secretary of the construction division, which is the biggest … I’ll be honest, there’s some people in the trade union movement that we call ALP hacks. Members pay our wages. ALP don’t pay our wages,” Mr Setka said.

He refused to comment on the criminal charges he faces of using a carriage service to harass a woman by sending vile text messages.

“It’s before the court. I would love to comment on it. I can’t,” he said.

Union leaders said some members were disappointed by the “radio silence” on Mr Setka from Ms McManus, ACTU president Michele O’Neill and CFMMEU national secretary Michael O’Connor and president Tony Maher, as they wrestled with how to deal with the complex situation.

“Younger women, I think, feel very let down by everyone’s radio silence on it,” a union source said.

The union’s ACTU affiliation is matter for the federal branch. But the CFMMEU’s Labor Party affiliation is a matter for state branches, so one option Mr Setka could pursue is cutting ties with the ALP and funding.

The idea of the CFMMEU charging Mr Sekta with “bringing the union into disrepute” is risky legally.

“The Federal Court has been extremely reluctant to allow someone who is elected to get sacked. There would be question of whether a sanction of expulsion would be proportionate,” a union source said.

“There might be another penalty like suspension without pay.”

Mr O’Connor and the other national officers are not directly elected.

“John Setka might try to blow the show up,” the source said.

“Which is why Michael O’Connor and Tony Maher would be moving slowly and carefully.”