Torontonians could wake up from their New Year's celebrations to labour uncertainty, as the contracts of thousands of union workers are poised to expire.

City contracts with a number of unions, totaling some 28,000 workers, end on Dec. 31. The contracts represent 22,000 inside workers with CUPE Local 79 and 6,000 outside workers represented by Local 416.

Union heads have warned that there could be a lockout if city hall and the employees don't reach a new contract agreement.

Mayor Rob Ford told CTV News earlier this week that the city is aiming for a fair settlement.

"I want a fair deal for the union and the taxpayers," he said. "We've been at the table, we're bargaining in good faith and hopefully we can strike a deal."

Tensions were ratcheted up earlier this month as both sides accused the other of bargaining in bad faith. This set the stage for a nasty labour dispute.

Union head Mark Ferguson, president of the Toronto Civic Employees Union, Local 416 of the Canadian Union of Public Employees, accused the city of pushing for labour disruption after it called for the appointment of a conciliation officer with the Ministry of Labour.

"The city has been making contingency plans for quite some time – it is of no surprise to me that they are planning for a labour disruption rather than negotiating at the table," he said earlier this month.

"What we want is that the city come back to the table, and negotiates in good faith. Negotiate an agreement that respects employees and protects vital public services."

The city has not met with representatives from Local 416 since Dec. 14. It is also in legal limbo with Local 79.