Philadelphia's labor negotiations stalled this week after a state court Wednesday postponed until next week hearing union complaints against the city's contract stance.

The hearing, which will center on whether the mayor is legally allowed to unilaterally implement what he called his "last, best offer," has become the focal point of the ongoing labor dispute.

The Common Pleas Court rescheduled the hearing for Oct. 8 at the unions' request. The unions said witnesses had been involved in negotiations with the city all night and were unprepared.

The delay came amid signs from City Council President John street that a resolution to the city's ongoing labor crisis might be near. But a spokeswoman for Mr. Street said yesterday he is now less optimistic.

The setback, according to the city council president, came when James Sutton, president of the blue collar union, criticized Mr. Street for negotiating in public and said he should get out of the bargaining.

What had been described as intense negotiating sessions have come to a halt, with no further discussions scheduled as of late yesterday, city sources said.

Philadelphia's unions, district councils 33 and 47 of the American Federation of State, County and Municipal Employees, have asked the court for a preliminary injunction against Mayor Edward G. Rendell's plan to implement his final contract offer even though the unions have rejected it.

A spokeswoman for Mayor Rendell said yesterday the city is continuing to take steps to implement the contract, which includes an overhaul of employee health benefits and major cuts in paid time off. The mayor has said the decision to impose his contract terms is justified because the bargaining sessions had come to an impasse.

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