More than 20 union officials could face criminal charges from assault to extortion after the release of a damning inquiry report.
But the royal commission into union corruption, headed by Justice Dyson Heydon, has cleared former prime minister Julia Gillard over the Australian Workers Union affair.
However, two former AWU figures - Ralph Blewitt and Ms Gillard's former partner Bruce Wilson - have been referred to prosecutors in Victoria and Western Australia over their role in setting up a slush fund for which she gave legal advice.
"Julia Gillard did not commit any crime and was not aware of any criminality on the part of these union officials," the interim report of the inquiry says.
The three-volume report recommended criminal charges against at least 22 unionists and three unions.
"The excuse that there is just one rotten apple here or there is regrettably not the case," Employment Minister Eric Abetz said.
The first two volumes were published on Friday but the third volume has been kept confidential because it deals with threats to witnesses.
It is uncertain whether further prosecution recommendations are included in that report.
Senator Abetz plans to bring legislation to the first sitting of parliament next year that would toughen penalties for corruption and restore the construction watchdog.
Justice Heydon has asked Commonwealth prosecutors to consider charges against the Construction, Forestry, Mining and Energy Union and officials from that union, as well as seven officials from the Health Services Union.
NSW, Queensland and South Australian prosecutors have also been asked to prosecute CFMEU figures for offences including assault, threats and extortion.
The Transport Workers Union and Queensland branch of the Shop, Distributive, Allied and Employees Union face action by the Fair Work Commission and the Information Commissioner, respectively.
The Australian Competition and Consumer Commission will examine whether the CFMEU conspired to damage a crane business.
Senator Abetz called on Opposition Leader Bill Shorten and Labor to support tougher sanctions for union misconduct.
"I would have thought that anybody that is committed to the trade union movement would want to see a clean trade union movement," he said.
The report says the criticism that "there was a lapse in professional judgment on Julia Gillard's part" was justified.
The report also found some companies had done deals with unions to maintain industrial peace.
However, no charges have been recommended against employers.
ACTU boss Ged Kearney said the government owed an apology to Ms Gillard, as well as taxpayers, who forked out $50 million for a "political exercise".
"The smoking gun wasn't there," she said.
Ms Kearney said police should be given extra resources to tackle corruption.
Justice Heydon did not make recommendations in favour of changing workplace laws.
The reports came as the government released the terms of reference for a Productivity Commission inquiry into workplace laws.
The coalition has said that any proposed changes to the Fair Work Act will be taken to an election.
