About 150 health and safety inspectors are being forced to re-apply for their jobs under a proposal called Lifting Our Game.
The Public Service Association revealed details of the plan, which involves the Business Innovation and Employment Ministry disestablishing the posts. The restructuring comes in the wake of the Pike River mining disaster.
The proposal went out last week, leaving inspectors "angry and confused", PSA national secretary Brenda Pilott said.
The plan includes three new categories of inspector - assessment, investigation and response.
"Many of these inspectors are very experienced and have given years of dedicated service. They feel like that now doesn't count for anything," she said.
Last month the Pike River Royal Commission recommended a new crown agency solely focused on health and safety be established.
It was damning of failures by the coal mining company and the Labour Department, leading to the deaths of 29 men in November 2010.
Ms Pilott stressed the commission did not criticise the inspectors but was "highly critical" of resourcing and management. "The inspectors feel like they are being penalised by having to reapply for their jobs."
Labour MP Darien Fenton questioned the timing, given recommendations by the commission that a new agency be created. "There is a risk of losing already skilled people."
The ministry did not respond to a request for comment yesterday.
Acting Labour Minister Chris Finlayson said the changes were operational.
"These changes were in train as a result of internal reviews."
- Fairfax Media