Health Services Union national secretary Kathy Jackson’s federal court battle with the union over her slush fund has taken as sensational turn after she claimed the union had “committed a fraud on the court".

The HSU is pursuing Ms Jackson for almost $250,000 paid into a slush fund as well as legal fees Ms Jackson told the Royal Commission into trade unions on Thursday that the money was transferred legally to conduct union political business although conceded that the conduct might not meet the standards of the public.