South Australia's teachers' union will hold an urgent meeting on Thursday, after a Mount Gambier business accused the organisation's state secretary of shoplifting.
Leah York was in Mount Gambier for a briefing session for the Australian Education Union's enterprise bargaining negotiations.
But security video has emerged of Ms York in a local shop, stuffing a handbag into a shopping bag.
Ms York told News Corp there had been a misunderstanding, after she paid for a different item and then had to quickly leave the shop to go to the toilet.
"I thought I had prepaid for the bag," she told The Advertiser.
After media reports on the case, the shop, Lima & Co., then posted on social media that it had reviewed more video footage and seen the same person in the shop earlier, appearing to steal an orange top.
"After receiving more information about your theft, we took a closer look at the footage and discovered you failed to mention before you left the store the first time, that you had already stolen an orange knit," the shop posted.
"This footage speaks volumes. You have impacted our staff greatly."
Ms York was also on the board of the state government investment agency Funds SA.
On Wednesday, the agency released a statement saying she has resigned from her position.
In a statement, AEU vice president Jan Murphy said the union was taking the matter very seriously.
"We understand that members are very concerned and we do not condone the apparent actions in the video," she said.
"We are seeking advice and will be working with executive, our democratically-elected member representatives, to determine next steps and guide the union."
Ms Murphy said the union would not allow the matter to distract from its core business.
"Particularly as we engage in enterprise bargaining with every intention of improving working and learning conditions," she said.
"An urgent meeting of our executive has been called for Thursday evening."
Premier Peter Malinauskas said he had been busy dealing with the nuclear submarine announcement and could not comment on the matter with authority.
"I don't know the particulars of the circumstances but, needless to say, clearly something peculiar has happened here and that's up to Ms York to explain and account for whatever those actions were," he said.
Police say the matter has been reported to them and they are investigating.
The ABC has contacted Ms York for comment.
