Victoria's powerful construction union has been accused of forcing a developer to employ both the brother-in-law and best friend of the union boss in exchange for industrial peace.

Secret recordings have also captured union heavyweights abusing and threatening managers of the Pentridge Prison development, in Melbourne's north.

In October 2009, a workplace accident at Pentridge Village claimed the life of Thomas Kelly, 46, who was crushed under a concrete pump.

A spokesman from the Victorian WorkCover Authority told the ABC that charges against the building company, West Homes, were dropped because there was insufficient evidence to make a successful prosecution.

Developer Peter Chiavaroli, 70, said the accident left him devastated and described it as feeling like a "death in the family".

He said after the incident, the Construction Forestry Mining and Energy Union (CFMEU) stepped in to take control of the previously non-unionised site.

"When they came in after the accident, they took a very hard line, they said we killed people," he said.

"I have been called a murderer more than once."

Mr Chiavaroli decided to hire a safety expert but said the CFMEU's Victorian branch state secretary, John Setka, demanded his close friend Anton Sucic get the job.

"I told [the union] that I had already made arrangements with the Master Builders Association and my office has interviewed someone and he's going to start next Wednesday," Mr Chiavaroli said.

"[John] Setka said I'm very sorry that's not an option, Anton is going to take the job, he's the right man for this job."

Mr Sucic was given the job, with the union saying he had 30 years' experience in the building industry and occupational health and safety, and was hired on merit.

When Mr Sucic later left, Mr Chiavaroli said the union installed its second choice to fill the position, Mr Setka's brother-in-law, Ivan Dadic.

But the union later denied Mr Dadic ever worked there.

CCTV captures union members threatening site shut down

On CCTV obtained by the ABC and Fairfax, Mr Dadic can be seen at the Pentridge Village construction office discussing how the CFMEU would deal with non-union workers.

"He wants the same money we are all getting here, but he doesn't want to put in, he's being shamed, named and shamed," Mr Dadic said.

Sorry, this video has expired Ivan Dadic discussing how the CFMEU would deal with non-union workers

"And then if that didn't work, obviously more of the site would be shut down."

Under Australian Freedom of Association law, it is illegal to force a worker to join a union or to threaten a company if a worker does not join.

Mr Chiavaroli said that when Mr Setka heard that a painter on the Pentridge site was planning to report the union to the industry watchdog, the Australian Building and Construction Commissioner (ABCC), he left an angry phone message.

"It's John Setka, can you please give me a ring about this ****ing dog, Turkish ****ing painting piece of sh** on your job," he said on the phone call.

Mr Chiavaroli said a Victorian Labor Party official urged him to hire underworld figure and industrial fixer Mick Gatto to sort out industrial disputes.

Mr Chiavaroli refused.

Developer sent pictures of his children in graves

Mr Chiavaroli said threats and intimidation went further than the worksite.

He was sent photoshopped pictures of his children in graves, from an unknown person.

In a statement, the CFMEU said the Pentridge site was plagued with safety issues.

National secretary Dave Noonan said Mr Chiavaroli's claims were investigated by the ABCC, which took no action.

He said Mr Setka makes no apology for his passionate fight for safety on a site where a worker was killed.

The claims are expected to be raised at the royal commission into trade union corruption in Melbourne next week.