Former Connaught workers have staged a demo outside Hull City Council after contract complications led to a freeze in wage payments.
The council then reversed the decision in December and decided to split the contract between Kier and Kingston Works Ltd.
Workers were being paid by Lovell until Wednesday when payments were stopped. Unions including GMB and Unison fear staff have been abandoned while the contract transfer is completed and have threatened legal action.
The council said it was the firm’s responsibility to resolve the issue.
In a statement Kier said: “Kier and KWL are in detailed dialogue with Hull City Council and will be liaising with trade unions in order to bring about a speedy and expedient resolution for everyone concerned.”
A Hull City Council spokesperson, said: “The council has not blocked any proposals for the transfer of staff between Lovell and Kier or KWL, and has advised the parties that they must take their own independent advice about TUPE. The council believes Kier and KWL are taking such advice.
“The council has been informed that Lovell have unilaterally decided to stop paying staff from midnight on 12 January, and that they are now employed by Kier and KWL, however, the council has received no official notification about this, and is urgently seeking further information to clarify the situation.
“It is in everybody’s best interests to resolve this as quickly as possible and we have asked KWL and Kier to supply us with their revised plans.”