Vic Labor MP Cesar Melhem headed to court

Georgie Moore and Kaitlyn Offer

Victorian Premier Daniel Andrews is happy for fellow Labor MP Cesar Melhem to stay in parliament as he fights court action against alleged Fair Work Act contraventions from his union days.

The Registered Organisations Commission has started civil proceedings in the Federal Court against the Australian Workers' Union and its former Victorian branch secretary over an alleged scheme to artificially inflate union membership between 2008 and 2013.

But Mr Melhem told AAP the ROC had "no credibility" and he was looking forward to his day in court.

"I refute all the allegations and I will be planning to defend them," Mr Melhem said on Tuesday night.

The MP added a criminal inquiry against him, stemming from the union royal commission, had recently been dropped.

Mr Andrews said he was happy for Mr Melhem to stay in parliament as he fights the action, but wouldn't comment further on a court proceeding.

The Commission alleges hundreds of people were registered as AWU members between 2008 and 2013 despite the fact they hadn't signed up, and more than 2000 unfinancial members weren't removed from the register.

Mr Melhem stood down as upper house whip in 2015 over claims aired at the union royal commission that, while he was AWU boss, the union received money in exchange for workplace deals which sold out employees.

At the time, Mr Melhem defended a 2010 agreement with contractor Cleanevent that paid the AWU $25,000 a year and saved the company $1.5 million in wages.

In a statement, the AWU dismissed the ROC as a Liberal Party attack dog but said it would engage in the legal process "in good faith".

Opposition Leader Matthew Guy said it was up to Mr Andrews to explain why so many of his MPs are under investigation.

"Not just Cesar Melhem, but a range of his MPs such as his rorting ministers who still sit in his cabinet - Khalil Eideh, who is still in his government," Mr Guy told reporters.

Mr Guy was referring to an Ombudsman report released earlier this year into the abuse of parliamentary entitlements by Labor to help fund its 2014 election campaign, which has since been repaid, and allegations Mr Eideh's electorate office misused printing allowances to fund a branch-stacking operation, still under investigation.