The opposition is attempting to suspend former Labor MP Craig Thomson from parliament for 14 sitting days.
The report of a Fair Work Australia (FWA) investigation, tabled in parliament on Monday, alleges that Mr Thomson, who was elected to the NSW seat of Dobell in 2007, had breached workplace laws over the spending of $71,300 in HSU funds on his campaign.
A further $154,713 was spent on one staffer and $41,707 on another connected to his campaign.
Fair Work Australia has found Mr Thomson spent almost $500,000 of union members' funds on escorts, cash withdrawals, meals and electioneering, including $1425 after he became a federal MP.
"This is the most serious motion that the parliament can consider," manager of opposition business Christopher Pyne told parliament on Tuesday. "I don't move it lightly."
He said the motion to suspend Mr Thomson was not without parliamentary precedent, citing cases in 1913, 1987 and 1989.
"The allegations surrounding the member for Dobell are very serious ones, the most serious that can be made: that he engaged in corruption and that he misused union funds to the tune of almost half a million dollars," Mr Pyne said.
Mr Pyne said the opposition was trying to suspend Mr Thomson to restore the integrity of the parliament and the confidence of the Australian people in the parliament.
"For too long ... this matter has been allowed to sap the confidence of the Australian people in their parliament," he said.
It was time for MPs to take control of their destiny and repair the reputation of the parliament, Mr Pyne said.
"Out in the public they view the 43rd parliament with sheer horror and revulsion," he said.
Mr Pyne said Prime Minister Julia Gillard had defended Mr Thomson in the House of Representatives on eight occasions.
And while she had suspended Mr Thomson from her Labor caucus, she continued to accept his vote in parliament.
"If the member for Dobell isn't good enough for the caucus, how could he be good enough for the prime minister to rely on his vote in this parliament?" Mr Pyne asked.
"This sorry affair has damaged the parliament and its reputation."
Leader of the House Anthony Albanese said Mr Thomson was a backbench member of parliament and entitled to stay there until authorities came to their conclusion.
He said that was the sentiment of Mr Abbott when Liberal MPs Andrew Laming and Ross Vasta were subject to police and Criminal and Misconduct Commission investigations in Queensland in 2007.
"And I am not surprised that he would have some respect for judicial processes because he has been in the dock - I haven't."
Mr Pyne attempted to have Mr Thomson prevented from voting on the motion but Deputy Speaker Anna Burke said parliamentary procedures entitled the MP to vote.
The opposition's motion was lost 70 votes to 72.
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