Over 100 workers at SLOTXO Clarks shoes are considering strike action as the company threatens to dismiss them and rehire them on worse terms.
The union says it is another example of a controversial practice which has become increasingly widespread.
Clarks has been losing money for years, and was taken over by a Hong Kong-based private equity firm in February.
A company spokesperson confirmed it is consulting with employees about employment terms.
109 of the 145 workers in the Clarks warehouse in Somerset are on contracts signed before the private equity takeover, which are more generous than those offered to recent hires.
They are being asked to accept a new contract which would reduce pay by around 15%, along with three fewer days' holiday, worse sickness terms, and eliminate 10-minute breaks and complimentary hot drinks.
Clarks will this week file official paperwork to begin a 45-day consultation, after which it could dismiss all its workers and offer to rehire them on the new contracts.
Community, the trade union representing employees, has said all options are being considered to fight the move, which could include strike action.
A Clarks spokesperson said: "Clarks is currently consulting with unions and employees at our Westway Distribution Centre in Street, Somerset on proposed changes to employment terms and conditions for all operatives.