Labour negotiations with the City of Toronto’s outside workers are continuing past a midnight deadline.

The city's 5,400 outdoor workers, which include garbage collectors, park staff and snowplow operators and are represented by CUPE Local 416, were legally permitted to strike as of 12:01 a.m. Friday.

The city is also trying to reach a deal with 23,100 indoor workers, represented by CUPE Local 79, before a deadline of 12:01 a.m. Saturday. Those workers include those employed at childcare centres and Toronto Community Housing.

Both unions have been without a contract since the end of 2015.

Earlier Thursday, Toronto Mayor John Tory said he was hoping to avoid job action, or threats of job action, by reaching a deal.

"For some reason or another, labour talks, collective bargaining always seems to go down to the deadline," Tory said.

"I'm still optimistic and I'm still very hopeful."

CUPE Local 79 President Tim Maguire told reporters on Thursday that his union has made efforts to meet the city "halfway," by reducing its demands at least three times.

He said he believes a deal can be reached, but if it isn't, negotiations will continue beyond the Saturday deadline.