The New Zealand Dairy Workers Union is considering legal action against Fonterra after eight staff members at the Waimate milk processing plant were given marching orders on Monday.
It follows Fonterra's acquisition of the former New Zealand Dairies operation last week.
New Zealand Dairies was placed in receivership in May owing a substantial amount to its supplier farmers.
New Zealand Dairy Workers Union southern organiser Murray Kerse said the union was looking at a case for discrimination.
It is understood some of the workers were former employees of Fonterra and overall that up to 20 workers have been laid off.
"Several had worked for Fonterra before; they were told to leave and had lieu of notice on Monday," Kerse said.
Three processing and auxiliary staff including security and ground keeping were given notice.
"Some of the operators have been laid off and Fonterra has employed others in their place," Kerse said.
"We had 30 members; for the 22 members who are there it's a good story but for the ones who have been laid off it's not."
Kerse said the fact the plant was in receivership made things complicated in terms of legal action.
"We'll see if we've got a case for discrimination; we are exploring our options."
Fonterra South Island operational manager Robert Spurway would not discuss the matter.
"We are pleased to welcome our new suppliers and employees to Fonterra but we can't discuss any details of an individual employment agreement." That would breach privacy.