Victoria Police say construction unions are using outlaw bikie gangs as “hired muscle”.

Victoria Police has joined the LNP’s push to reinstate the ABCC, a construction industry watchdog, arguing it needs new powers to fight the use of bikies as “debt collectors” by unions.

“There is a climate of fear amongst people who are either the victims of trade unions' unlawful activity, or who uncover unlawful activities within their unions, making them unwilling to speak to any authorities for fear of retribution,” the police said in a recently-revealed 2015 submission to the Royal Commission into Trade Union Governance and Corruption.

Victoria Police says motorcycle gang members are hired by union officials for debt collection, which can feature the intimidation of victims.

It said the ‘debt collection’ was “debt collecting in the broadest sense and is really more akin to blackmail, since it involves demanding money with menaces”.

But the Construction, Forestry, Mining and Energy Union (CFMEU) says the submission contradicts Victoria Police Assistant Commissioner Stephen Fontana's verbal evidence given under cross-examination in 2014.

Assistant Commissioner Fontana told the royal commission that police were running a number of investigations into allegations of violence, intimidation and debt collection by outlaw bikie gang members for the union, but they were unable to make any arrests because alleged victims had withdrawn their statements.

The union says it has “pledged cooperation with the police in any investigation of criminal activity”, but it continues to reject calls for the return of the Australian Building and Construction Commission (ABCC).

“The question of the return of the ABCC is a political issue and it is important that the police are seen to be above partisan politics and controversies that are the domain of political parties,” the CFMEU said in a statement.

“The ABCC is an industrial regulator that curbs rights of workers and unions to organise on sites. It has no role in dealing with criminal matters.”