COUNCIL staff are threatening legal action after a decision not to merge revenues and benefits services was overturned.
Members of Ryedale District Council voted against the merger with Hambleton District Council on April 24.
But Ryedale councillors used a loophole in the authority's rules to vote again on the issue and rejected the original decision.
The council's Conservative Party, along with some Liberal Democrat and Independent councillors, pushed the motion through by 16 votes to 11.
Speaking in favour of the decision, Conservative leader Councillor Keith Knaggs said: "If any kind of two-tier system in North Yorkshire survives, it will involve more working together, not less.
"It is hypocritical to say 'yes, we'll do that', having just voted down a flagship partnership a year after work on it started."
The move, which will mean the loss of eight jobs, has been greeted with fury by workers.
Speaking after the meeting, Paul Hunt, branch secretary of Unison in Ryedale, said he was "extremely disappointed".
"Ever since that decision was made on April 24, there has been a concerted plot to reverse it," he said.
"We're taking legal advice and we'll be seeking a judicial review. I'm very upset for my colleagues - this is a grave day for Ryedale and I think it's the first of many.
"If the council can shed ten per cent of its workforce, why not more?"
Councillor John Clark said he would fully support any legal action taken by the union, and added: "The biggest concern is the treatment of the staff - they were treated like numbers. The real cost to Ryedale will be a bad employee relationship."
The partnership with Hambleton is a pilot scheme and aims to cut costs by combining the collection of council tax and business rates, as well as the payment of benefits, for both authorities.
The Department of Work and Pensions' Centre of Excellence has promised a £685,000 grant for the project. Each council would also contribute £141,000 to make up the total cost of £967,000.
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