TRADE union Unison and Hampshire County Council are still locked in talks over moves to stop overtime pay for the council's lowest-paid staff.
The council says jobs could be lost if up to 5,500 workers refuse to accept measures which would see time-and-a-half pay blocked on weekdays and for Saturday working.
Early reports on discussions between employees' representatives and the local authority suggested talks had broken down, which could have meant all 5,500 staff affected being laid off, only to be re-employed on new contracts.
But Unison's Hampshire representative Gina Turner said: 'Negotiations on this matter have not broken down. We disagree with the council, because this move would unfairly penalise the council's lowest-earning workers, who have to work unsociable hours because they have no choice. But that's why we are negotiating with the council.'
Under the council's proposals, which it believes can save up to 3.2m per year, staff would no longer receive time-and-a-half pay rates for weekdays or Saturdays, though they would for Sunday working.
But at present, the entitlement to the pay is in each staff member's contract.
The authority has sent letters to the staff, who include care workers, library assistants, community response assistants, residential carers, nurses and school caretakers, asking them to volunteer for the scheme.
Ms Turner said: 'We hope our members will wait to see how the negotiations end. We believe there are better ways to save money, and this is a divisive and unfair approach.'
The council confirmed talks were continuing, but added that one possibility if they end without agreement would be to issue new contracts to its employees, which would come into effect on June 1.
Anyone who failed to agree the contract would lose their job, though those who came to work on or after June 1 would be assumed to have agreed the new contract.
Council leader Cllr Ken Thornber said: 'We want to cut costs in a way that reduces the need for compulsory redundancies and minimises the impact on frontline services. In view of this, we've offered the opportunity to voluntarily accept the changes. As a last resort, we would ask staff to accept a new contract.'