The Papua New Guinea Energy Workers Association is questioning the legality of a decision to hire an Australian as chief executive of the government owned PNG Power Corporation.
A PNG national, Lawrence Solomon, has held the post in an interim capacity for nearly four years, and he has the support of the union.
The union's general secretary Philip Kaira says workers are threatening strikes and power cuts if the Australian takes up the post.
He says the workers are angry at the actions of chairman, John Jeffrey, another Australian, in taking on an expatriate.
"Which is contrary to the constitutional obligation of the government to make sure that the interest of PNG nationals are protected and therefore we are contesting the decision which is both improper and unconstitutional cos the person himself who made the decision and who chairs the power board, does not have a valid work permit."
Philip Kaira from the PNG Energy Workers Association