Ambulance workers are heading to court to challenge St John after the charity announced it could not afford a planned pay boost.
First Union has lodged an application with the Employment Relations Authority, claiming the service has breached an agreement to pay weekend and overnight shift rates.
St John, which is about 70 percent government-funded, announced last month it needed to claw back $30 million over the next financial year after Covid-19 and the lockdown limited its fundraising abilities.
That means penal rates, which were agreed to after last year's industrial action and were due to come into effect from the 1 July, have not been able to be paid.
The charity said the rates were subject to affordability - and an independent market review, which has since been completed and advised a different approach.
"Since the penal rates were originally proposed in 2019, an independent review into the market conditions has advised an alternative approach. Further, it is well understood that the financial situation facing St John has significantly worsened since then. For these reasons we had advised our unions that we believe it would be unreasonable for them to withhold their consent to a different arrangement."
St John has been paying staff a 5 percent unsociable hours shift allowance since the end of last year - an interim measure until the penal rates of time-and-a-quarter were due to come into effect.
First Union spokesperson Sarah Stone said some paramedics doubted whether St John ever intended to honour the full payment.
One paramedic told RNZ's Checkpoint: "Money to help us out for all of these unsociable hours would've gone a long way and people were quite passionate during the industrial action about it - and to be told three weeks out that we're not going to get it has just been demoralising."
He has been working as a paramedic for the past 17 years - and said the affordability issue came up time and time again from St John.
"If you're a charity that can't afford to run it as it needs to be run, then maybe it is time you don't run it. And maybe it is time the government steps in and says 'we need to bring this in line with FENZ and police and run it as a proper emergency service, not as a charity'."
Intensive care paramedic and NZ Ambulance Association spokesperson Mark Quin said St John was the right outfit to be running the ambulance service, but they needed more government funding.
"When I hear calls of wanting to have a nationalised ambulance service, or another provider, it doesn't actually mean that the services will be any better or the conditions will be any better for the ambulance officers."
In a statement, the Ministry of Health said St John had applied for and been granted funding to assist with additional costs related to the Covid-19 response.
"This year's Budget, alongside ACC funding, saw an additional $36.5 million over four years allocated to road ambulance providers for additional staffing. Last year the Crown invested $25.1m over two years in road ambulance providers to relieve reported financial pressure."
It said officials were in discussions with St John regarding its financial position.
St John said it was implementing $30m worth of cost-saving measures and the government was acutely aware of its financial position.
