The Pulp and Paper Workers Union says it has been informed of a facilitated bargaining later this week after a Kawerau mill began legal action against its own workers.
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The Swedish owners of Essity, which makes Purex toilet paper, is threatening 67 staff with more than half a million dollars in damages.
And 145 union members have been locked out of the mill for three weeks after they rejected a 3 percent pay rise.
The union said the company's legal action related to technicalities over a strike notice issued in July, before the lockout.
Pulp and Paper Workers Union secretary Tane Phillips said he expected the union to be served, but the move was devastating for workers.
"These are the guys who had worked right through Covid, and made sure that company has made a very good profit over the last year."
He told Morning Report the workers were "devastated and really upset".
"Some were very angry that the company did that ... and the way they served them is they did it by e-mail at first and then they were dropping parcels off at their place, with just their address on it."
However, Phillips said there was some good news yesterday - facilitated bargaining is scheduled for Thursday and Friday.
"I haven't seen that in writing yet, but I was informed that would be happening.
"That's what we've been asking for, it's come around quicker than we imagined."
He was not sure where the talks would lead. The Employment Relations Authority will facilitate negotiations.
Council of Trade Unions president Richard Wagstaff told Morning Report it was rare for a company to "go after" its own staff in this way.
"I don't know what they what they think they're doing in terms of creating a good employment relationship."
Wagstaff said it would create a wall between the employer and employee, and damage the company's reputation.
"Clearly the company is trying to intimidate this union and their workers so they don't need to negotiate, they want these workers sort of forced back to work and to accept a cut in pay.
"I doubt that it's going to be successful. This is a technical legal issue. They're trying to find a loophole here where there's been a technical error with a strike notice.
"It's clearly intimidatory, they're hoping that this kind of threat to these workers will make them fearful of the next move."
He said the community would pull together.
"New Zealanders won't appreciate a heavy-handed multinational going out for a small community and its workers."
Workers asking for a pay rise to keep up with inflation was reasonable, Wagstaff said.
In a statement, Essity's Kawerau general manager Peter Hockley said they wanted to find a way to move forward with the facilitation later this week.
"We're keen to find a solution, but it can't be at any cost."
Hockley said the company's offer - 14.7 percent over three years - was close to what the union was asking for but claimed the union's refusal to budge blocked progress.
"There's no way that increase on base rates is sustainable including when inflation starts falling as everyone predicts," he said.
"It also ignores the enormous increase in production costs - energy costs have doubled, shipping costs are up five-fold as well as pulp and other materials at record highs. We can't just keep adding costs - something has to give."
The workers were "well paid", with pay rates at the plant exceeding inflation by a total of 10 percent since 2007, he said.
The strike action had caused the suspendion of a $15 million investment to upgrade paper machines and reduce the mill's carbon emissions, he said.
The company is also challenging the legality of some union strikes in a separate case.
Workplace Relations Minister Michael Wood said he usually stayed out of disputes, but he was urging both parties to exercise restraint.
"I've seen some behaviour that's been reflected publicly which seems at the extreme end of things and I'd urge all of those parties ... to think about how they can get a resolution instead of winding things up further."
Wood said it was quite uncommon for a company to seek legal action against its own workers.
