McMaster University's lowest-paid workers have been told they will lose their jobs if they don't accept the school's latest wage offer.

In a blunt letter to cleaning and maintenance staff Thursday, the university said it has lost patience with their union's efforts to negotiate a new contract and will turn their jobs over to private companies.

McMaster and the Building Union of Canada have been negotiating for more than seven months over a new contract for 271 cleaners and trades workers who keep the school's campus clean and functioning.

"Over the course of our negotiations, the union has stated its priorities and the university has made proposals that attempt to meet those priorities within McMaster's financial realities," wrote Geoff Tierney, McMaster's director of labour relations.

"When we began our negotiations last fall, the university discussed with the union its contingency plan. The plan is multi-faceted and includes the potential to contract out the cleaning services at the university, which would lead to the permanent loss of jobs," he added.

"This is not our preferred course of action. We have been clear all along that such a step would only occur if we couldn't arrive at a fair and equitable deal through the bargaining process."

At the heart of the dispute is an effort to get the university's lowest-paid workers up to the $14.95 an hour living wage identified for Hamilton. McMaster says its offers would accomplish that goal over five years while the union wants to get there sooner.

McMaster's threat follows the union's application for conciliation, a process in which a provincial conciliator tries to nudge the sides toward a settlement. If that effort fails, the sides are in a legal strike-lockout position 17 days after the conciliators report is issued.

Gord Arbeau, McMaster's director of public and community relations, accused the union of stalling a settlement by changing its proposals in the middle of bargaining.

"Normally in bargaining the gap between the sides narrow, but what concerns us is that the union is asking for more now than when we started," he said. "What deeply concerns us is this pattern where the gap between us is widening rather than narrowing."

Union president Craig Bromell accused the university of trying to scare a group of women, immigrants and single mothers.

"This group is 95 per cent women so this is clearly a ploy to scare these women to get them to agree to this contract," he said.

"These are women who are working hard for the university and are still living below the poverty line. We really believe that this is going to harm the image of McMaster University."

The union has asked for raises of 12.5 per cent over two years while McMaster's last offer was 5.69 per cent over five years. The BUC workers include cleaners who are paid $13.75 an hour plus $2 hourly in lieu of benefits, custodians who get $17.25 an hour and skilled trades workers such as electricians who get up to $32.26 an hour.

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The ongoing dispute with the cleaners has cast a negative light on McMaster's effort to position itself as a leading anti-poverty research institution.

That spotlight became even harsher in April when the union released documents showing that while its lowest paid workers were offered only pennies an hour over five years, a random sample of McMaster's top directors got raises of up to 28 per cent over three years and the number of staff making more than $100,000 a year rose to 1,034 in 2013.