Mr Tehan has called on the Prime Minister to adopt the recommendation from the Royal Commission into Trade Union Governance and Corruption and has issued a call to action for bipartisan support from his Labour colleagues.
He says individual union officials who break the law should be held to account for their actions and unions should be prohibited from paying the fines of their officials, akin to how the Corporations Act works for companies.
"You would start to see unions treated in the same way as companies are, so it actually is a good measure in that regard in that it brings unions further to account as to how public companies are dealt with," Mr Tehan told the ABC on Monday.
Mr Tehan highlighted the recent September 2015 case lost by the Construction, Forestry, Mining and Energy Union (CFMEU) where Federal Court ordered Ralph Edwards, the boss of the construction division, to pay $7,500 for a contravention of the Fair Work Act.
He says the fine would do little to deter illegal behaviour and argued it should be a criminal offence for unions to pay the penalty of officials under the Fair Work (Registered Organisations) Act.
“This amounts to little more than a slap on the wrist given his division of the CFMEU can pay the fine and they had an operating surplus of $2.9 million in 2014 and declared assets to the sum of $14.3 million,” Mr Tehan said.
He points says all sides of politics should support the recommendations of the Heydon Royal Commission Final Report.
Liberal MP Dan Tehan says union reps are wearing fines as a “badge of honour” and wants unions to be banned from paying fines on behalf of their officials.