Victoria's Small Business Minister Adem Somyurek has been forced to resign from Cabinet by the Premier following bullying allegations made by a staff member.

Mr Somyurek was suspended in May as a result of a complaint from his chief of staff, Dimity Paul, about threatening and intimidating behaviour.

He maintained his innocence and has blamed the ordeal on a factional spat within his party.

But after receiving a report into the allegations prepared by former Office of Police Integrity boss and retired Justice Michael Strong, Premier Daniel Andrews said he had lost confidence in Mr Somyurek.

"[Justice] Strong makes adverse findings against Adem Somyurek in relation to a number of very unfortunate and inappropriate incidents, one of which relates to physical contact with a female member of staff," he said.

The report found Mr Somyurek tried to stop Ms Paul leaving his office in February, took her chin in his hand, gently shook it and told her to calm down and put a filter on it.

The Premier said the report also detailed findings related to abusive behaviour.

"One relates to the dismissal of a staff member because he stood up for a colleague," Mr Andrews said.

"For all of these reasons, which are very clearly laid out in [Justice] Strong's report, I came to the conclusion that I could not have confidence in the minister and that his position was untenable.

"I therefore just a short while ago sought from him his resignation and he has given that to me."

We had no idea payback would be so extreme: Somyurek

In a press conference this afternoon, Mr Somyurek maintained the allegations were fabricated as payback for leaving the Shop, Distributive and Allied Employee's Union faction earlier this year.

"We knew there would be payback, we had no idea this payback would be so extreme," he said.

Mr Somyurek praised the Premier's performance in Parliament, but said he needed to be liberated from colleagues who did not have Labor's interests at heart.

"I refer to James Merlino the Deputy Premier and Johnny McLindon, the Premier's chief of staff," he said.

Ms Paul said the ordeal had been devastating for her family and friends. ( ABC News )

Ms Paul said any allegations that she was being motivated by some sort of "political play" were baseless.

"It has been devastating to my family and friends that the complaints I have made have been downplayed," she said.

"Any allegation of this kind is untrue."

The Premier offered an apology to Ms Paul and said a replacement for Mr Somyurek would be chosen at a cabinet meeting on Friday.

"We as a government breached our duty of care to her ... we will sit down and work through what her future holds," he said.

"This is an unfortunate incident. There has been inappropriate conduct.

"I want to make it very clear to you that the process I have put in place has been by the book.

"This has been done properly as every Victorian would properly expect when such serious claims are made."

Complainants' evidence 'more reliable' than minister's

Mr Andrews, who called the allegations "deeply concerning", said evidence provided to the inquiry by the complainants was "far more reliable than the evidence provided by the minister".

He said losing a Cabinet position was a tough penalty but he did not think Mr Somyurek should lose his seat.

"It is a very heavy price for the way he has acted. That's the appropriate sanction," he said.

Mr Somyurek has been a member of the Upper House since 2002, and has served as a minister since Labor took power last year.

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