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A vote to reimpose Easter Sunday retail restrictions in Dunedin has been welcomed by a union and criticised as "completely hypocritical" by a national retail association.

A Dunedin City Council hearings committee on Wednesday voted 3-1 to reinstate Easter Sunday retail restrictions, after hearing some workers felt pressured to work on what has traditionally been a day off.

The retail rules had been relaxed by the council last year, to cater for the crowds of fans who flocked to Dunedin for this Easter's three Ed Sheeran concerts.

First Union organiser Shirley Walthew, of Dunedin, said she was "extremely ecstatic" at the committee's decision, which was "brilliant, as far as we're concerned".

"A lot of our members, and also non-members we cover, said they were unhappy about being in that position of having to make a choice when there's subtle pressure put on them all the time."

She was aware of "quite a few reports" of staff feeling pressured or "guilt tripped" into working, either directly or indirectly.

Retail NZ public affairs general manager Greg Harford, in a statement yesterday, said the decision was "completely hypocritical", and the council should put "its money where its mouth is and close all its services on Easter Sunday".

"If the Dunedin City Council wants the city to close down on Easter Sunday, then it should be consistent and close down all council-owned operations as well."

The decision, which still required endorsement at next month's full council meeting, was "deeply disappointing", Mr Harford said.

Easter Sunday was not a public holiday but, under the relaxed policy, workers had a legal right to decline work on the day, he said.

Reimposing restrictions would prevent the city capitalising on future events, and give some retailers with historic "outdated exemptions", such as garden centres, an unfair advantage, he said.

Otago Chamber of Commerce chief executive Dougal McGowan was also "very disappointed" by the outcome.

The committee had been presented with "strong evidence" the relaxed rules were beneficial to businesses and many employees, he said.

Those benefits were lost because of "two people that felt that they were pressured to work", he said.

"There's a lot of people who have done things really, really well, and that would be the majority.

"What we're doing is we're punishing everybody else, or taking away the choice of everybody else, because maybe one business might not have done it correctly."

He would discuss the outcome with members and hoped to address councillors at the start of next month's council meeting. "It's definitely not over."

Dunedin Mayor Dave Cull could not be reached for comment yesterday.