Executives at LWS are working to pacify their Northwich employees, who claim that LWS denied them holiday rights promised to them by Vale Royal Borough Council last year.
The new row follows a rap from the council itself, which said that LWS's service "deteriorated unacceptably" earlier this year.
Dustcart driver Geoff Parkes, who represents the refuse workers for the National Union of Public Employees, said: "Last year, while we were working for Vale Royal, we didn't take all of our holidays on the understanding that we would be given compensation holidays by LWS.
"That hasn't happened. LWS has denied that it was obliged to do that."
LWS spokesman Tony Brown said that delicate negotiations with the union members were under way.
"This is between ourselves and the union that will go to conciliation, and things are at a very sensitive stage," he said.
"Obviously we recognise that union members have a complaint, and that they would like things to be going a little faster as regards the negotiations."
Meanwhile, Vale Royal Borough Council says it is now satisfied that the the daily collections in the Northwich area have returned to normal.
"There was a substantial problem with the service around April, May and June, despite LWS's good start in January," said Vale Royal's Richard Hallows.
"There were 'hotspots' where the problems were especially acute, but the matter was quite widespread."
The 'hotspots' included Barnton and Weaverham, where May Bank Holiday rubbish was left for nearly two weeks before being collected.
"But we are now satisfied that things are back to standard," said Mr Hallows.
Mr Brown added: "The problems arose because we had to make changes to the collection routine but we are happy to report that the service has resumed it usual high standard."
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