Over 100 workers at 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.
"As we are in a period of consultation, we are unable to comment any further at this time."
The BBC understands that Clarks is still hoping to find a negotiated solution which does not involve firing and rehiring any workers. The workers on the new contracts could see their pay rise under new employment terms.
Clarks was losing money before the pandemic, and has been hit hard in lockdown. It is expected to report a significant loss when it files its next set of annual accounts.
"The workers most adversely impacted by these changes are those who have been employees for decades, sticking with the company through thick and thin, stepping up in the last year during the challenging pandemic period," said John Paul McHugh, Assistant General Secretary from Community.
"Fire-and-rehire is no way to thank your employees or your customers. We ask Clarks to call off the diminishing of terms and conditions."
Founded in Somerset in 1825 by two brothers, Cyrus and James, Clarks shoe shops became a fixture on the British high street. It currently has 460 UK stores and over 700 more around the world. Workers in shops are not affected by the proposed changes.
Earlier this year Hong Kong-based private equity group LionRock Capital bought a majority stake for £100m, as the Clark family lost control of the business for the first time in nearly two centuries.
What is fire-and-rehire?
When an employer wants to change workers' employment contracts, often to reduce costs, they can sometimes dismiss all the affected workers and offer to re-engage them on new contracts - known as "fire-and-rehire".
The controversy about this practice has become more intense following the pandemic.
A study into fire-and-rehire by the conciliation service ACAS found evidence of the practice at small- and medium-sized employers too.
Labour, the Lib Dems and the SNP, as well as trades unions, have called for it to be banned.
The government has no plans to ban it but has said it should be used only as a last resort, not a negotiating tactic.