Dyson Heydon's biggest challenge is dealing with the scope of task at hand

Despite fears of a political witch-hunt, former High Court judge Dyson Heydon opened the royal commission on trade unions in Sydney by declaring it was not hostile to unions or setting out to abolish or curb their activities.

Rather, Mr Heydon said, the commission's terms of reference aimed to discover how well and how lawfully unions were performing their role.

''They assume the desirability of unions having legitimate functions within the law,'' he said.

Mr Heydon said the terms of reference for the inquiry launched by the Abbott government have been described as broad. ''In some ways they are. But in other ways they are restricted,'' he said.

''The terms of reference rest on certain assumptions which are not hostile to trade unions. The terms of reference do not assume that it is desirable to abolish trade unions. They do not assume that it is desirable to curb their role to the point of insignificance.''

Senior counsel assisting, Jeremy Stoljar, said no honest workers or union officials had anything to fear from the commission. But reports of union officials setting up slush funds to pay for electioneering needed to be tested. ''Slush funds only operate if there are slush fund contributors,'' he said.

Only the Construction, Forestry, Mining and Energy Union had officials at the opening address. Michael O'Connor, the national secretary, Tony Maher, the national president and Dave Noonan, the national secretary of the construction and general division - the division expected to be targeted in the inquiry - attended among the many lawyers, who were presumably representing individuals and unions expected to be called.

Kathy Jackson, the Health Services Union national secretary who blew the whistle on corruption in her union, also attended.

Outside the commission, she disagreed with other union officials that the commission was a witch-hunt, saying that honest unionists had nothing to fear.

''I don't know what the hysteria is about in the union movement but, as far as the HSU [is concerned], the members have contacted me with concerns and they have been referred to the royal commission,'' she said.

When the royal commission was announced in February, Employment Minister Eric Abetz said it would be ''a sword that will cut both ways''.

But legal experts have said it is unlikely the terms of reference for the inquiry would uncover criminal activity by companies and subcontractors in the building industry because they only considered conduct by or connected with unions and related entities.

Andrew Stewart, a professor of law at the University of Adelaide, said the terms of reference made it clear corrupt conduct by anyone other than a union or union official was only to be treated as relevant to the commission if that conduct was related in some way to a union or union official.

''It is possible of course that evidence of alleged corruption unconnected to a union might incidentally emerge in the course of detailing union-related dealings,'' Professor Stewart said. ''But I don't see the commission going out of its way to look for such evidence, or investigate such matters.''