High street fashion chain Cotton On has become the first company to attempt to invoke the Government's 'tea break' law, First Union claims.

The Australian retail chain, which has more than 80 stores across New Zealand, has entered a last minute claim in collective agreement negotiations to strip tea and meal breaks from their workers' contracts, First Union general secretary Robert Reid said.

Strike action now looks likely.

It follows the introduction in October last year of a law that took away the legal right to a tea break. The Employment Relations Amendment Bill also weakened collective bargaining.

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"The Prime Minister reassured New Zealanders that 'post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not'. We now know the Prime Minister's assurance was misleading," Mr Reid said today.

The retail workers union was currently negotiating a collective agreement for staff at Cotton On's distribution centre in Auckland.

"Negotiations began in July last year and both parties agreed to paid tea and meal breaks. But after the government's law changes came into force Cotton On has submitted a late claim to remove tea and meal breaks," Mr Reid said.

"Cotton On is trying to take advantage of a law that was always meant to strip workers of their rights.

"Breaks are crucial on industrial sites because they keep people safe. Worker fatigue is a risk on an industrial site like the Cotton On distribution centre. Removing breaks increases the risk to workers.

"After the government's law changes removing tea and meal breaks is legal, but that does not make it ethical or sensible."

The Cotton On distribution centre workers "not only want their breaks, they need them", Mr Reid said.

"Yet this has not stopped Cotton On trying to exploit the new law to its own advantage. This is what the government always intended, an economy where our competitive advantage is poor working conditions."

Mr Reid vowed that the retail chain's workers and the union would resist the proposed change, saying "industrial action seems likely on this and a number of other matters that have been unilaterally changed by Cotton On in a draft collective agreement following the last set of negotiations".

The introduction of the Employment Relations Amendment Bill removed guaranteed meal breaks in return for requiring employers to pay extra where they are not provided. The breaks were written into law in 2008 but National has argued it is inflexible for some, such as those in sole-charge positions where regimented breaks are impractical.

The Government said the law would allow for more flexibility in the labour market.

However, it was strongly opposed by Labour, the Greens, New Zealand First and the Maori Party, as well as the unions. At the time it passed, Council of Trade Unions Secretary Helen Kelly said it meant New Zealand now had some of the worst worker protections in the OECD.

Meanwhile, 240 workers at Orora Kiwi Packaging in Auckland, Hastings and Christchurch have voted to take a two week over-time ban after collective bargaining broke down.

The ban could threaten the supply of boxes for the kiwifruit, wine and meat industries, the Engineering, Printing and Manufacturing Union (EPMU) said.

"Our members are bargaining for a fair wage increase. Instead, their Australian-owned employer is offering a paltry 1.8 per cent and trying to claw back important work rights," Joe Gallagher, EPMU organiser for the packaging industry, said.

"After six days at the bargaining table, the workers have had enough, and will refuse any overtime for a fortnight. Their work isn't being valued by their employer, so there's no incentive for them to work longer hours."

The overtime ban would begin on March 30 and could be extended if Orora "refuses to budge from its miserly position", Mr Gallagher said.

He also linked the breakdown in negotiations with the 'tea break' law, saying "this is what happens when the Government takes away workers' rights".

"At the first opportunity, employers will claw back whatever they can, whether that's tea breaks, overtime rates, or redundancy protection."