Helen Constas has become the first casualty of the 2014 state election after it was revealed she faced court accused of bullying her personal assistant while she was chief executive of the Peninsula Community Legal Centre.

She planned to pinch the seat of rogue Frankston MP Geoff Shaw, whose political career has been marred by controversy.

It is understood Ms Constas wrote a statement in response to the allegations with the Labor party in January, in anticipation of the information being leaked.

"There is no doubt the Labor party were aware of this issue," a source said.

Ms Constas said on Thursday she was saddened by the allegations aired by News Limited and she was constrained in what she could say because the issue was subject to a confidentiality agreement.

She said she was proud of her work at the legal centre, which had helped the most vulnerable and disadvantaged.

"The matters reported today were fully reported and considered within the Peninsular Community Legal Centre, and are the subject of a confidential settlement designed to protect all those involved."

Quinn McCormack, who represented Mr Shaw on fraud charges, worked at Peninsular Community Legal Centre during the period where the alleged workplace bullying took place.

Right to Life Australia senior executive officer Katrina Haller worked for the Legal Centre for more than nine years, and said she left after Ms Constas asked permanent staff to sign three-month contracts.

"She was trying to causualise the workforce and I thought that was wrong, and that was the reason I left."

Liberal candidate for Frankston Sean Armistead said he was sick of seeing the seaside seat being cast in a negative light and did not tolerate bullying.

"Bullying in the school yard or workplace is always unacceptable because of the damage and harm it causes. People are looking for a representative who shares their own values and principles which doesn't include bullying."

Frankston was won by Mr Shaw by a 2.1 per cent margin at the last election but now notionally favours the Liberals by a slim 0.4 per cent margin.