The building union has left the door open for a legal stoush if Lend Lease alters an agreement to comply with the Victorian government construction code.
It is understood the government has informed Lend Lease the pay and conditions deal it has struck with the Construction Forestry Mining and Energy Union (CFMEU), which has four years to run, is in breach of the code.
Lend Lease is the preferred builder for one of the two short-listed consortiums bidding for the $630 million Bendigo Hospital contract, due to be announced in the new year.
Unless the agreement is changed to comply, Lend Lease could be banned from lucrative public construction work, which has the potential to affect its construction businesses Baulderstone and Abigroup.
The government will allow subsidiaries until June 30 next year to comply, otherwise they will face the same black listing as parent companies.
CFMEU national secretary Dave Noonan said the union expected Lend Lease to honour the deal, which complies with the Fair Work Act.
He said there were measures parties could take if a legal agreement was broken to ensure compliance.
"If there is a decision (from the Victorian government) we will have a look at that with a view to ensuring that the rights of our members are properly protected," Mr Noonan told reporters.
"Why would any government in its right mind want to lessen competition?"
He said Premier Ted Baillieu was under pressure from right wing elements within the Liberal Party that want to bring back Work Choices.
"This is, if you like, a burnt offering to the Work Choices Taliban," Mr Noonan said.
The Lend Lease group is one of two major players in the Victorian civil construction industry, along with the Leighton group of companies.
Comment was being sought from Lend Lease.
A government spokesman said he was unable to comment due to live tender issues.
Lend Lease Construction and Infrastructure chief executive Mark Menhinnitt said the company would continue to work with the state government to ensure it complied with the code.
He said he was confident a solution to issues raised by the government would be found.
"The government has advised Lend Lease that transitional arrangements will be implemented," he said in a statement on Tuesday.
"This will provide Lend Lease the opportunity to go through a process to ensure all of our entities are compliant."
Mr Menhinnitt said the company supported the code's objective to achieve cost effective delivery of infrastructure for Victoria that also benefited the construction industry and Lend Lease's clients.