Currently up to 156 school lunch suppliers made up of businesses and local trusts feed their school communities under the Ka Ora, Ka Ako healthy lunches programme.
The Ministry of Education says 75 of those provider contracts will end on December 24 after a decision to partner with the School Lunch Collective - run by international company Compass Group.
One supplier, Trust House, will have to let go all 47 people employed to run the programme because it was blindsided by the decision and thought its contracts had been extended to 2026.
Associate Education Minister David Seymour says that was never the case.
"First of all, we haven't cut any contracts, we have chosen not to continue some that we already had," Seymour said.
Trust House chief executive John Prendergast told RNZ's Midday Report today that upset would "be too mild a word".
"Our concern is not who the contract's been awarded to, our concern is around complete breach of a commitment given several times by the minister himself and by the ministry that the school lunch provision for year one to six kids would carry on by existing suppliers for the next two years."
A tender was put out in August for a school lunch contract excluding primary school lunches, but when the tender was awarded it in fact did cover primary schools, Prendergast said.
There was no consultation and Trust House found out via the media of the Compass Group contract, he said.
"Across all of the supplier group, the total revenue is in excess of $200 million."
New leases were signed by suppliers, new vehicles were bought and employment contracts extended, he said.
"We thought we could rely on the ministry to do what they said they were going to do... We shouldn't be the victims of a dreadful process..."
A complaint has been lodged with the Prime Minister's office and the Ombudsman, he said.
The Ministry of Education says as part of its registration of interest process it gave advance notice that business could be impacted in the transition to the new model.
"All current suppliers have now been notified of the outcome from the Registration of Interest process. We understand that for those suppliers who are not part of the new model this is a difficult time for them.
"The School Lunch Collective have an obligation to protect, care and support affected employees as outlined the Part 6A of the Employment Relation Act 2000 (ERA).
"Under the vulnerable employee transfer provisions, the School Lunch Collective will offer all eligible 'vulnerable' employees, who elect to transfer, from the various current providers employment.
"Compass Group Limited will be in contact with you directly in compliance with all obligations of the Act, relating to the protection and support of these workers."
