Australia's corporate watchdog needs to "sink its teeth into" the demise of Queensland Nickel and look at prosecuting Clive Palmer, a union leader says.
Administrators FTI Consulting released a report on Tuesday that found Mr Palmer appeared to act as a shadow director of QN alongside the appointed director, his nephew Clive Mensink.
QN, which may have traded while insolvent, should be liquidated, the administrator recommended.
It also found Mr Mensink and Mr Palmer appeared to have been reckless in exercising their duties as directors.
Australian Workers Union Queensland branch secretary Ben Swan said he would be interested to see whether the Australian Securities and Investments Commission would "actually sink their teeth into this issue" and prosecute Mr Palmer and Mr Mensink.
"If their a***holes aren't twitching at the moment mate, they will be shortly," Mr Swan told AAP, following the report's findings into Mr Palmer and Mr Mensink.
"It looks like they've been lined up for the high jump."
Mr Swan said he welcomed FTI's recommendation to liquidate, which will need to be approved at a creditors' meeting next week, because it meant sacked QN workers would at least receive some of the entitlements owed to them.
If QN is liquidated, the federal government will pay workers some of their entitlements.
"It will at least see workers get some of their entitlements paid out, which will help them meet their ordinary day-to-day and week-to-week living expenses," Mr Swan said.
"(But) it's fair to say it will be a fraction, under the federal scheme, of what they would otherwise be entitled to."
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