A strike or lockout of Toronto's largest union remains on hold as the two sides continue to negotiate past a midnight deadline.
A work stoppage involving the city's 23,000 inside workers would affect Toronto arenas, pools, community centres and fitness centres.
CUPE Local 79 represents daycare workers, clerks, child-care workers, nurses, janitors and community centre employees. The union's contract with the city expired on Dec. 31, 2011.
The city is negotiating with the union, whose members voted in favour of a strike mandate on Wednesday.
The union was in a legal strike position as of 12:01 a.m. Saturday, but the union said it would not strike if the deadline arrived without a new deal and negotiations were continuing.
Both sides say they are making progress.
Toronto Deputy Mayor Doug Holyday confirmed to reporters early Saturday that the talks were still going and said he was hopeful an agreement could be reached.
"I don't think we're going to lock them out; as long as meaningful discussions are taking place we're going to be at the table," Holyday said.
Negotiators for the city and for the union took a break until noon Saturday, then resumed talks.
Union spokesperson Cim Nunn said there are significant hurdles to be overcome, but that the union is hopeful.
In the event of a work stoppage, city sewer, water and emergency services, as well as the TTC, would continue to operate.
The city's library workers are already on strike. Job security appears to be the sticking point in both disputes.
Nunn said the city wants to give the inside workers the same job security that it recently gave outside workers — job security after 15 years.
The union feels that's unfair because such a deal protects about 70 per cent of the outside workers, but would only provide job security to about half the inside workers.