An industrial dispute has seen workers picketing outside of Sandvik’s Tomago site.

Approximately 200 employees walked off the company’s Hunter sites in protest at its plan to implement a cut in redundancy provisions.

Australian Manufacturing Workers Union spokesperson Corey Wright has said that whilst employees will return to work on Friday, there are plans to escalate the industrial action from next week.

"We’ve got a 24-hour stoppage planned for today and overtime bans planned for the weekend," Wright said.

There also plans for a 24 hour work stoppage on Monday.