Birmingham City Council has rejected union claims that it is threatening to sack its entire 41,000-strong workforce.
The local authority said it had no plans to dismiss a single employee as part of attempts to restructure the pay and conditions of its staff.
Union officials claimed the council, which is controlled by a Tory-Lib Dem coalition, had gone for the "nuclear option" by issuing formal notices to its workforce which could result in redundancy if they refuse to accept new terms.
But Alan Rudge, Birmingham’s cabinet member for equalities and human resources, said the notices were a technicality required by law when a local authority sought to change its workers’ contracts.
Coun Rudge said: "We have no intention of making any redundancies at the moment - every single person will be offered re-engagement."
He stressed that the authority was currently negotiating with unions in an attempt to reform bonus payments and conform with equal pay legislation.
"We want to sort out sensible, practical solutions which are fair to everybody," he said. "We don’t want to sack anybody.