More than 100 CSO employees gathered at Wickham Park before marching, chanting, to protest outside the diocese and CSO's Newcastle West headquarters.

Independent Education Union (IEU) chapter representative and CSO employee Steven Newman said the diocese had "refused" to negotiate over the coverage clause in the new enterprise agreement.

Related: Catholic Schools Office staff to take industrial action for second time in fortnight

"I'm disappointed as a man of faith who was baptised into the Catholic church and now works for the CSO that they're not practising what they're preaching," he said.

"It's become the Catholic corporation and we're worried."

The diocese implemented a restructure last year called Many parts, One body, One mission.

Mr Newman said this reclassified around 30 IEU members working in areas including human resources, finance and information technology as being employed by the diocese under 'shared services' rather than the CSO, even though much of their work was for the CSO.

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They were taken off the enterprise agreement and given individual contracts with the "bare bones" modern award.

Another five people working in the secretariat were moved into shared services on November 25.

The IEU wants a coverage clause to ensure all members are still covered by the agreement even if they are moved into shared services.

Mr Newman said the diocese told the union it was moving staff to shared services to 'optimise existing processes and embed a whole of diocese focus'.

He said in reality, most were working more hours for worse pay and conditions.

"They've seen their annual leave loading gone, a reduction in personal leave, long service leave entitlements reduced and their paid parental leave removed."

He said the diocese's appointment of a chief executive, Sean Scanlon, was "sickening".

"It says they value it as a corporation, not as people."

CSO acting director of schools Gerard Mowbray said in a statement he met with representatives and "reaffirmed the diocese's genuine commitment to working with our colleagues to resolve the EA".

"We value our colleagues and that is why we seek to work collaboratively with them, to achieve a timely resolution to the proposed three year agreement that carries a 2.5 per cent pay increase per annum.

"We have been disappointed that the IEU stalled negotiations, and very much hope that they immediately resume."

Newcastle MP Tim Crakanthorp said he was "sure treating [staff] in this appalling manner is against all Catholic teachings".

NSW Teachers Federation members will stop work on Thursday.

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