The President of the 2,000-strong Solomon Islands Public Employees Union, Douglas Ete, has suspended the union's general secretary, Clement Waiwori, and its vice-president, George Varai, accusing them of misusing thousands of dollars of union funds.
Two union executive members have resigned in protest at Mr Ete's suspension of Mr Waiwori.
Mr Waiwori has now claimed that he has details of a financial scam involving officers from the departments of fisheries, forests, environment and mines.
It has been alleged that 20 officers from those departments have helped themselves to fisheries and mines and forestry fees which should have been paid into the consolidated fund.
Mr Waiwori says Mr Ete is also implicated in the scam.
Meanwhile, union rank and file are worried about the developments, which they fear may affect their eight percent cost of living adjustment.
The government and the union agreed earlier this year that union members should be paid the adjustment in either September or October.