The Canterbury District Health Board (DHB) is privatising a service for mental health patients.
The DHB last week told work assessment and rehabilitation staff and patients the service would close early next year and a private provider found to deliver a similar service, the National Union of Public Employment convenor Paul Shennan said.
"The problem with this is that this group are at the high and complex end and it is not even known whether a private provider exists that will have the ability, expertise or will be funded sufficiently to deliver such a service," he said.
"It does seem premature to announce this closure when a competent provider may not even exist."
The 20 staff carried out jobs including assessing patients, planning treatment and helping their transition to discharge.
They ran activities such as art, gardening and woodwork and for some of the patients were a big part of their social contact, Mr Shennan said.
DHB planning and funding general manager Carolyn Gullery said work assessment and rehabilitation for mental health patients would continue to be funded, and there would be no reduction in service.
"The purpose of the changes is to focus specialist mental health services (SMHS) on providing acute care in hospital and specialist support to community-based services," she said.
"Staff working in the service are either being retained within SMHS in similar roles to support assessment and rehabilitation or are being offered opportunities for re-deployment elsewhere in the DHB."