The dispute followed an announcement that contractor Vertex is to move parking services work to Dingwall, Scotland (LGC, 26 January).
Westminster appointed Vertex to the 10-year contract in 2002 to provide 67 council services. Some 300 staff transferred.
GMB regional organiser Bert Schouwenburg claims documents disclosed to him showed Westminster manipulated the public sector comparator - a Treasury test to show whether outsourcing represents good value - to make the deal appear favourable.
But a council spokesman dismissed the claims as 'a wilful misinterpretation of information provided', and said the comparator showed a£30m saving.
'All of the former Westminster staff who transferred over to Vertex are being offered continued employment by Vertex in Westminster,' he said. 'No one is being forced to move to Dingwall.'