Mr Latham raised Mr Drayton, a CFMEU organiser - and the circumstances surrounding the sale of a union-signed enterprise agreement for $307,000 - in a question without notice on Wednesday and then had "the working conditions, wages and entitlements" of Hunter Valley coalminers - focusing on the same 2017 agreement - debated as a matter of public importance on Thursday.

On Wednesday, Mr Latham asked Liberal Damien Tudehope, the Minister for Finance and Small Business, whether he was aware of the agreement.

Mr Tudehope said: "If it is to be accepted, it was Jeff Drayton who was instrumental in striking a union deal with a labour hire company that removed a prohibition on a casual workforce for coalmines, allowed casuals to be terminated with a minimum of one hour's notice and gave no entitlement to annual leave, carer's leave or compassionate leave.

"If this was not bad enough, within four months of Mr Drayton striking the enterprise deal with a labour hire firm, the firm and the rights of workers were sold for 30 pieces of silver, with a question mark over whether the CFMEU or Mr Drayton benefited from this sale.

"Now this man wants to run for Parliament to change laws which he is instrumental in delivering: to stop miners from being exploited. The hypocrisy of preselecting this candidate is rife."

On Thursday, Mr Latham was accused by Labor upper house leader Adam Searle and another Labor MLC, Rose Jackson, of defaming Mr Drayton under parliamentary privilege.

READ MORE: Jeff Drayton forced to defend his credentials

The CFMEU said it suited One Nation to blame the union rather than mining companies for the problems with contract mining because "they're a pro-business party".

Mr Latham said he was raising a matter of public importance because "the Labor Party has its candidate in the Upper Hunter saying that he is against the casualisation of the workforce when he is the author of it".

"The truth of Jeff Drayton is the disease of the modern Labor Party and the union movement." Mr Latham said.

"From the Australian Workers' Union through to the CFMEU, union officials get way too close to the bosses."

"He (Mr Drayton) signed his name on an agreement with his mate Jonno McTaggart in February 2017 for a company that had one asset and one asset only - a piece of paper with two signatures on it," Mr Latham said.

"That piece of paper sold out the workers to the extent of $307,000. It is very unusual in public life to be able to quantify to the dollar amount the extent of the sellout of the workers.

"It was on-sold to another labour hire company, OneKey, for $307,000.

"Why would a labour hire company buy an enterprise agreement for $307,000 unless it was worth that much minimum in what they could do in the exploitation of the workers?"

Mr Latham seized on a media report that said Mr Drayton "did not directly address the question of financial benefit", saying that if Mr Drayton had "not taken a sling" he could have said "I did not get any of it, no".

He said it "looks like this disgraceful practice of Labor getting in bed with the bosses and feasting off the spoils has spread to the mining division of the CFMEU" - a proposition Ms Jackson described as "outrageous".

Mr Searle said it was Mr Latham and Pauline Hanson's One Nation that lacked "honesty and integrity" after it voted with the federal government on the recent "casuals" legislation.

Mr Searle traced the contested enterprise agreement back to 2015, when a labour hire company, SubZero. was employing casual workers on individual agreements at the Bengalla mine.

"Those workers were being employed as casuals illegally because the Black Coal award did not allow casual employment in its classification," Mr Searle said.

" Arguably, that made the wages and conditions of those casual workers illegal and unable to be recovered.

"So Mr Drayton wrote to SubZero to demand that those workers be paid their leave entitlements.

"He also began negotiations with SubZero for an enterprise agreement to regularise the situation to cover those workers, but SubZero went into liquidation before those negotiations were completed.

Valley Labour Services was intended to supply labour at the Bengalla mine in place of SubZero.

"To try to save the jobs of the former SubZero employees at the Bengalla mine and ensure that they got decent conditions and pay, Mr Drayton began enterprise agreement negotiations with Valley Labour Services."

He said the agreement was sold by Valley Labour Services, to another labour hire firm, OneKey, which then "misused' it to "undercut" conditions.

Mr Searle said "Mr Drayton did not see any of that money" and "I challenge members opposite to provide any proof to the contrary".

Labor's John Graham rejected any "union skullduggery" and said there were "50 agreements like this".

"This is old news," Mr Graham said.

"The real clue about what is going on was when union members said there are 50 agreements like this. This is not an attack on Jeff Drayton, the Labor candidate for the Upper Hunter; it is an attack on the union.

"I do not accept that the mining and energy division of the union is engaged in any skulduggery.

"They work in one of the toughest industries in the world.

"Coalmining companies are tough operators that operate around the world and they are quick to litigate.

"I agree with the fact that there are shonks in the industry and it needs tougher regulation.

"The current state and federal laws do not make it a fair fight.

"The union does not always win the fights. I do not believe for a moment-and I would call it out if I thought that this was the case-that any personal benefit goes back to union officials."

The CFMEU disputed a description of the Valley Labour Services (VLS) agreement as "substandard", saying it "included many above-award conditions that other contractor agreements don't have - better superannuation, accident pay and shift penalties for example - and had better pay and conditions than SubZero workers affected by the liquidation were receiving"."

The union was motivated to keep these local workers in their jobs, as they wanted," the union said.

"However VLS was undercut by WorkPac, which was using an unlawful non-coal EA - the union also took action over that - and VLS never got a contract at Bengalla.

"From the union's perspective that was the end of it. No-one in the union including Jeff Drayton had any knowledge of the sale of VLS to One Key until a completely different workforce started being employed under it."

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