The Public Service Association (PSA) says a minor dispute over wages has snowballed with an Otago employer taking a sledgehammer to a nut approach.
Twenty-seven Anglican Family Care staff members in Dunedin, Alexandra and Balclutha have been suspended without pay just a matter of days before Christmas.
Workers held a silent rally yesterday in protest at the suspension, which the PSA called an "extremely aggressive step" by the employer.
The PSA said Anglican Family Care workers had been involved in low-level industrial action over bargaining for a living wage before being suspended.
PSA national secretary Richard Wagstaff said the suspension was particularly bad timing so close to Christmas.
"This is supposed to be a time of good will. It is supposed to be a time when an organisation with their values and the things that the Anglican Church espouses doesn't seem to be coming through - with what we are seeing here and I think people have been taken by surprise too," Mr Wagstaff said.
Mr Wagstaff said staff planned to drop their minor action, including working to rule, and go to work today - despite the suspension.
He said staff did not want vulnerable clients to be left in the lurch.
"This was a sledgehammer to a nut reaction that we saw. Minor, minor action taken and an all out suspension reaction by the employer, which was completely disproportionate and had a dramatic impact on service delivery."
In a statement, director of the Anglican Family Care Centre, Nicola Taylor, told Radio New Zealand it had been a complex situation that had changed by the hour at times.
She said there was a willingness from both parties for staff to return to work today and that was the most important thing.
"The PSA has decided to be selective with details and put this into the public arena. Our preference is to sit round the table face-to-face and I have no more to add to the issue, as what goes on round the table is the most important," she said.
However, the PSA said it had made an urgent application to the Employment Relations Authority for facilitated bargaining.
It said it would not move from its position that Anglican Family Care staff deserved a cost-of-living pay adjustment.
Anglican Family Care's services include the provision of welfare, budgeting and counselling.
Its website said most of its funding comes from Government contracts, particularly from the Ministry of Social Development.