First Union, which represented staff in L'Oreal's Auckland distribution centre and some retail members at other employers who deal with L'Oreal, has slammed the move.
First Union acting secretary for retail, finance and commerce Ben Peterson said L'Oreal's proposed changes would impact NZ head office roles and not union members, but he was concerned about possible indirect effects on members.
L'Oreal NZ had not yet responded to questions about the anticipated number of redundancies.
"L'Oreal has always wanted to present itself as a socially conscious employer to the union, but making cheap shortcuts in operations seems contrary to these stated goals," Peterson told the Herald.
"Companies who base their NZ operations out of Australia or other countries often then lose the local expertise and understanding of New Zealand's unique business and regulatory environment," he added.
That made it more likely companies would lose an understanding of their obligations to employees under New Zealand law, he said.
And that could cause unnecessary problems, and make it more difficult to resolve issues.
"An example of this is compliance with the NZ Holidays Act. Many employers have failed to comply with the Holidays Act in recent years, and this is much more likely to be the case if a company is running their payroll through Australian systems, as the regulatory framework relating to employment is fundamentally different."
L'Oreal said it had spoken directly to First Union to let it know none of its members would be impacted.
Last week, L'Oreal NZ confirmed it was consulting staff over moving the remaining management of its New Zealand operations to Australia.
Company spokeswoman Tanya Abbott said: "We are bringing our New Zealand and Australian teams in closer alignment across all areas of our business. We already work together very closely in some areas and have done for many years.
"We are consulting with our New Zealand teams about a proposed structural change. Like all businesses, we review our structures."
Abbott said Rodrigo Pizarro would continue as chief executive of L'Oreal Australia and New Zealand. He has been in the role eight years.
There would be no changes to L'Oreal's supply and fulfilment in New Zealand and it would retain its Ellerslie offices and distribution centre in Auckland, she said.
The NZ arm of L'Oreal employs 230 staff.
At the end of 2019, L'Oreal laid off local sales staff, citing increased competition and "disruption" in the pharmacy market. Two Auckland staff and one each in Tauranga and Wellington were made redundant.
The distribution of its brands to pharmacies across New Zealand was moved to a third-party sales provider.
L'Oreal NZ accounts for the last financial year show the company made $14.5m profit in the year ended December 31.
The company took $1,503,890.40 in government wage subsidies during the height of the Covid-19 pandemic, for 224 staff.
A note in L'Oreal accounts said Covid had a significant impact on operations but since lockdown restrictions were lifted, there'd been no long-lasting detrimental impact to the business.
New Zealand L'Oreal employees were awarded free company shares worth $155,000 in September 2020. But those shares won't be allocated until November 2025 - subject to their presence in L'Oreal at that date.
The Herald has sought additional comment about the share programme.
