The man who replaced fraudster Michael Williamson as boss of the Health Services Union agreed to falsify invoices because “that’s how the union works”.

Former Health Services Union (HSU) head Peter Mylan has admitted he falsified invoices to cover illegal payments to his disgraced predecessor Michael Williamson.

Mr Mylan, who took over as HSU general secretary as Mr Williamson faced a fraud investigation in 2012, told the unions royal commission on Thursday he agreed to create backdated invoices verifying payments by the union made to a company, Canme, set up by Williamson and his wife.

Williamson was sentenced in March to five years jail for fraud.

At a meeting in Sydney’s Bar 333 in January 2012, Williamson asked Mr Mylan to falsify the invoices and lie to an internal investigation that he was aware of the payments, totalling nearly $340,000.

“You have to do this one, mate,” Mr Williamson said, according to Mr Mylan.

Mr Mylan told the inquiry he did what Williamson asked despite knowing it was wrong.

“Mr Williamson was a fairly powerful person and asked people to do lots of things,” Mr Mylan said.

While Mr Mylan was acting general secretary, he believed Williamson still held the role despite being stood down.

He added that Williamson also headed his political faction.

“That’s how the union works,” Mr Mylan said.

Text message records tendered to the commission showed Williamson messaged then-NSW Labor Party general secretary Sam Dastyari while at the meeting with Mr Mylan.

“Mate I am actually in the 333 bar George St with Mylo do you want to join us or is this just you and me (sic),” the message read.

Mr Dastyari, now a senator, replied: “On my way.”

Mr Mylan told the commission he had not met Mr Dastyari or discussed with him what Williamson had asked him to do.

Senator Dastyari, when asked for comment by AAP, said he had never been involved in any meeting or conversation of the kind discussed at the commission.