COUNCIL workers have received a letter instructing them to sign a new contract or be sacked.

Greenwich Council has sent the letter to all employees who were served a section 188 notice in October last year.

A section 188 notice serves as notice that an employer intends to make a number of employees redundant.

It was issued as part of the council’s consultation on a four-year freeze on annual automatic pay increases.

The council says the freeze, which affects 2,201 current workers will save £2.4m - enough for 77 front line jobs.

Paul Callanan from the Greenwich Save Our Services group said: “What the council is trying to do is just plain wrong. We understand that there is an economic crisis, but it is wrong to punish hard working people for it.

He added: "We are urging people not to sign the letter and I understand that Unite are looking into whether or not it is a legal move on behalf of the council.

“Action should be taken, we should fight this.”

The letter states that having failed to reach a collective agreement with the trade union, there is no alternative other than to implement the freeze through the termination of contracts of employment, and offers of re-engagement on new terms.

It says: “If you do not wish to enter into the new contract, your employment with the council will terminate on the 31 March 2011. As there is a continuing role for you you will have no entitlement to any redundancy or notice pay.”

A council spokesman said: "We are hopeful staff will understand the council is regretfully having to take this measure to protect services and as many jobs as possible."