A union representing Whitcoulls staff is outraged that they are "signing their rights away" under contracts the new owners are enforcing.
Last week, the company was sold by administrators to the James Pascoe Group, which also owns jewellery chain Pascoes and Farmers department stores, for an undisclosed sum.
National Distribution Union general secretary Robert Reid said he was horrified that the contracts, given to Whitcoulls and Borders staff on Friday to review over the weekend, did not contain redundancy compensation.
"It's a travesty, because the Whitcoulls workers are the ones who have been going to work every day and dealing with the crap from customers about not being able to cash in their vouchers. But then their rights have been traded away as part of the settlement price."
He said a conservative estimate of the 900 Whitcoulls workers' lieu payments and redundancy entitlements was about $5000 each.
A shareholder in the James Pascoe Group, Denham Shale, said the union had not understood the redundancy clause correctly.
"What they [the contracts] are acknowledging is the agreement with the new job is that redundancy doesn't apply and that would be paid to them by the administrators of the REDGroup, it wouldn't be paid by us."
He said that if the staff wanted to keep their jobs, they would sign the new agreements.
The union said that under the agreements, the new owner could hire a worker for one week and make him or her redundant the following week with no redundancy payment.
Mr Shale responded, "Yeah, we could do that. But we're not like that."
He said Whitcoulls staff should not be worried about mass redundancies.
"They could always go and ask people in Pascoes stores or Farmers stores, they're all going to be working on similar contracts with the same redundancy agreement."
Mr Reid said this was "rubbish" because he had helped to negotiate the Farmers contracts, which he said provided for redundancy compensation.
