A dispute over invitations to a charity dinner for mental health prompted United Firefighters Union secretary Peter Marshall to "sack" the income protection provider for nearly 4,000 firefighters.
The decision of Mr Marshall has confused and angered some firefighters and has prompted the insurer, ATC Insurance, to sue the UFU in the Federal Court for misleading and deceptive conduct as well as loss and damages.
The union has told members it has negotiated an "enhanced" income protection package with a mystery provider, which is yet to be announced.
And it has warned firefighters will only get a taxpayer-funded reimbursement from the union's chosen fund.
It is the latest flashpoint in a bitter dispute between rival unions triggered by the UFU's decision to campaign against the Andrews government.
Earlier this year, the Victorian government expanded presumptive cancer compensation for firefighters to include mechanics employed by Fire Rescue Victoria (FRV).
Mr Marshall opposed the government's expansion of the scheme and the UFU campaigned against Labor's re-election – it prompted the Electrical Trades Union (ETU) and Australian Workers Manufacturers Union (AMWU) to call Mr Marshall anti-worker and anti-union.
That friction between the union has since affected firefighters' income protection.
In recent years, FRV firefighters were provided income protection through a group called Protect, which administers the scheme on behalf of ATC Insurance.
Protect has strong union links and includes members of the ETU on its board. Protect administers income protection and redundancy payments for several unions.
Taxpayers pay for the UFU members' income protection scheme through Fire Rescue Victoria at the cost of more than $50 a week per firefighter – there are more than 3,900 workers in the scheme.
UFU draws battlelines over charity dinner
Earlier this year, the group held the inaugural Protect Dinner in Support of Mental Health in Docklands. Tickets were $100 a head with all proceeds going to charity.
Unions were invited, including the ETU, AMWU and the UFU. In August, one of Protect's organisers called Mr Marshall as courtesy to let him know that the other unions were attending.
"Given that the ETU and AMWU were likely to be invited to the dinner, (staff member) Mr Johnston was not sure whether Mr Marshall would want to attend the Charity Function,'' ATC statement of claim said.
Following that, court documents say Mr Marshall met Protect's chief executive Michael Connolly where he claimed Protect had made a decision to exclude the UFU from the event, asserting in an email that there had been "partisan, political interference by the ETU State Secretary Troy Grey [sic]".
At subsequent in-person meetings, Mr Marshall told Protect that it had been sacked.
According to court documents, Mr Marshall told Mr Connolly that if Protect "made things difficult" he would "ruin" Protect and tell others Protect was "an operative for Dan Andrews".
Mr Marshall also met with ATC Insurance chief executive Chris Anderson and said Protect could no longer provide insurance due to "political interference by unions", the documents say.
Union promises members a new insurance provider
In October the UFU issued a bulletin to members stated it had been in "positive negotiations" with a new provider for "enhanced income protection" and that the union would not renew its contract with Protect.
"Protect and ATC Insurance were unable to provide such enhancements for UFU members,'' the bulletin said.
But ATC, in its statement of claim, said it was never given any opportunity to provide enhancements.
In a bulletin this week, the UFU warned members if they re-signed with Protect and ATC rather than the union's new provider they would not be entitled to a reimbursement.
"If you sign with Protect/ATC Insurance, your entitlement to reimbursement under the Enterprise Agreement will be imperilled as the right to reimbursement depends on the existence of an insurance policy agreed as between the UFU and FRV," the bulletin said.
"The Protect offer of a policy is not agreed therefore you will not be entitled to the reimbursement allowance."
FRV refused to respond to the ABC's questions about what income protection scheme it would reimburse firefighters for, saying it was a matter for the union.
Negotiations for the new provider remain a mystery for members, with Mr Marshall not even revealing details to senior members of the UFU.
"Peter won't even tell us who the insurer is,'' one senior figure said.
A new income protection scheme for UFU members is imminent and could be announced as early as today.
Mr Marshall said as the matter was before the court he could not comment.
"However, in the context of members' entitlements and benefits, the UFU has an extraordinary record of continuous improvement and income protection is no different,'' Mr Marshall said.
