Both parties are currently negotiating an 'amicable' separation, with formal termination likely in the next few weeks.
Unison officials welcomed the firm's imminent departure - not least because the remainder of the four-year contract will transfer to Merton Direct Services, the council's in- house team.
MRS won Merton's street cleaning contract, worth around £1.5 million a year, in October 1993. But contract monitoring by council officers revealed unsatisfactory performance in 1994.
Merton is able to automatically transfer the rump of the contract to its DSO because the in-house team submitted the second-lowest tender.
Unison branch secretary Nigel Skayman said the union hoped most of the 61 staff employed by MRS in the borough would transfer with the contract to MDS. Initially, they will retain existing MRS terms and conditions, but Unison wants them on national terms and conditions within a year.
A spokesman for MRS said the termination would be a 'dual, amicable separation' but insisted the firm did not believe it had underperformed. He admitted MRS's service 'has not always been what it should have been' but complained that Merton's contract monitoring had been 'less than helpful'.
'Merton would ring up and say 'somewhere in Merton there is some dog mess - clear it up', (but) they wouldn't identify where it was,' he claimed.