Jersey scrap metal firm Picot and Rouille is closing on Christmas Eve after losing the States contract.
The closure means ten staff will lose their jobs. They claim to have been assured by Transport and Technical Services (TTS) that many of them would be hired by the new contractor - a claim strongly denied by TTS minister Kevin Lewis.
He said: "The tender process was perfectly fair. Picot and Rouille had every opportunity to submit their case, but their application wasn't strong enough."
Jersey company Hunt Brothers have teamed with UK scrap giant European Metal Recycling to run the operation.
They beat off competition from 21 other businesses to run Jersey's scrap metal yard.