Ministry of Disabled People employees were promised a permanent role, but were told to start packing three weeks before their fixed term contract finished, says a former employee.
The Ministry - also known as Whaikaha - told RNZ it had no plans for redundancies as part of the government's cost saving requirements.
But the employee said they started in a fixed-term role last year and they were promised a permanent contract as soon as the paperwork was filled out.
"This position was initially planned to be a permanent position, so I really wasn't expecting not to be extended or not to be made permanent.
"So I think what our ministry is doing is they're just sort of quietly not extending all the fixed-termers and that way they can say: 'Oh, we're not disestablishing roles'. But they actually are because they're not replacing us."
They said it was a shock to be told there would be no extension, just three weeks out from the end of the fixed-term contract.
"I was getting a little bit worried, because I wasn't hearing anything about being made permanent or being extended. And so yeah, about maybe three and a half weeks before the end of the fixed-term, they said: 'Oh, we're actually not extending you'."
The worker said the job market was dire and they had been forced to lower their salary expectation.
"I have a mortgage to pay, so I'm obviously quite stressed about finances. I have found that there's not that many jobs out there. I've applied for so, so many, and I've gotten a lot of rejections."
Public Service Association assistant secretary Fleur Fitzsimmons said the cuts to fixed term staff showed there were more job losses in the public sector than was being reported.
She said workers that were told they would be made permanent may well be able to argue that the promise stood.
"In New Zealand, an employer must have genuine reasons based on reasonable grounds to make someone fixed term.
"If workers have been told that they'll be made permanent, they can rely on that and elect to be treated permanent."
Fitzsimmons said any public servants who had been promised permanent roles or have had changes made to their fixed term contract should contact the PSA.
"In many cases it may be that these fixed terms are not genuine and that these people do have grounds for personal grievance, and I'd strongly encourage them to get in touch with the union so we can provide representation and support."
The Ministry of Disabled People said it employed 37 fixed-term, 211 permanent, and 6 secondee staff as of 20 April.
Deputy chief executive of corporate services Hayley Evans said the number of fixed term employees will gradually get smaller over time.
"Fixed term or temporary appointments are made for reasons that are specific to the work they are hired to do. Given the phase of establishment that Whaikaha is in, we expect to gradually reduce our reliance on temporary staffing arrangements."
Evans said there were still no plans for redundancies at Whaikaha because it was already a small ministry.
She said in response to the government's savings targets the ministry had not recruited for some unfilled roles.