From constructing pallets to packaging, work with Fisher and Paykel was worth 18% of Cargill Enterprises' annual turnover. The vocational services provider provided employment opportunities for 122 people with disabilities, general manager Derek King said.
When news broke that the manufacturer was heading offshore, "people were worried what would happen to their jobs", he said.
A 30% decline in the numbers of pallets ordered by the whiteware manufacturer gave the service an "inkling" it could not depend on the 15-year contract forever.
"But we didn't think it would be this soon."
Mr King said a meeting was called with workers and concerned caregivers last month to reassure them no jobs would be lost when Fisher and Paykel winds down its business next year.
Cargill Enterprises was already dealing with 200% increase in wages this year, and news of Fisher and Paykel's departure came as a major blow, he said.
Mr King was confident that, with several new contracts secured, the non-profit service could return to a break-even position in several years.
A repeal of the Disabled Persons Employment Promotion Act 1960, which came into force on December 1, 2007, entitled people working in vocational services to the same employment rights as people in other forms of employment, including minimum wages, paid public holidays, annual leave and sick leave.
Before the repeal of the Act, Cargill Enterprises had recorded a profit for 2007, with most workers paid an allowance equivalent to 60c an hour.
The average rate had now increased to $2.35.
From July, the Ministry of Social Development commissioned Deloitte to complete reviews of Cargill Enterprises and Sherwood Centre, of Dunedin, and Southland Enterprises, of Invercargill.
These reports, which have been obtained by the Otago Daily Times under the Official Information Act, reveal the financial performance of each vocational service.
The reports investigate the financial viability of each vocational service provider.
"Changing the legislation helps to ensure that disabled people will be treated as individuals, and paid on the basis of what they can do rather than being judged by the place where they work," Ministry of Social Development chief executive Peter Hughes said.
Disability Issues Minister Ruth Dyson said in recent years there had been a shift, with disabled people moving from "segregated work environments" to "community participation and employment services".
Three years ago, an estimated 5000 people were working in vocational services, but that number had been reduced to under 1000, Southland Enterprises general manager Ian Beker said.
"There is certainly a move to community participation rather than working. It appears the ministry does not like our model. They see us as a relic from Charles Dickens' day.
"But despite all these changes, we are here to stay. Our people want to work and we provide them the opportunity."
Mr Beker said the repeal of the Act had cost the vocational service, which employs 103 people, more than $100,000 to implement, and it was Southland Enterprises, and not the ministry, which had to cover those costs.
"If I was a hard-nosed employer and I needed to cut costs, I would employ fewer people, but that is the wrong thing to do, because we are a commercial enterprise with a social purpose."
