The Meat Workers Union says AFFCO has dropped a pay offer from its negotiations which would have brought union wages into line with workers under individual contracts.
Up to 1000 union members are locked out from eight of AFFCO's North Island meat processing plants and another 500 are on strike in support.
Union spokesperson Graham Cooke says it has asked the Employment Authority to facilitate mediation after the latest round of talks were postponed.
Mr Cooke says they have not been told directly that a 2.5% pay increase has been withdrawn from the negotiations.
"It's through correspondence that we've heard that the company has decided the 2.5% pay increase that was on offer in the collective employment is withdrawn, and that there will be no catchup for them towards the individual employment agreements which are already 3% ahead."
The union's general secretary, Dave Eastlake, says the company has decided not to attend mediation on Thursday because it is too busy working on the union's legal challenge to the lockout.
AFFCO chief executive Rowan Ogg says it has postponed mediation until 2 May, not cancelled it.
He says the company needs to concentrate on preparing for the court hearing scheduled to start on 23 April.
"The union has filed for urgency which gives us a very short timeframe in which to prepare our evidence, and that's where our efforts have to be directed at the moment."
Mr Ogg says the company cannot do both the court case and the mediation because it has to prepare a large amount of evidence and it requires witnesses from the company to be at court.
Union members at the company's eight plants will meet again on Friday.