TORONTO - A battle between Ontario teachers and the Liberal government over a proposed cost-cutting bill appears to be leaving the boardroom and heading for the courtroom.

"We are currently reviewing the legality and constitutionality of the proposed legislation and are preparing for a legal challenge if it should become law," Ken Coran, president of the Ontario Secondary School Teachers' Federation (OSSTF) said on Friday. "Our focus is on getting deals at the local level."

Coran accused Education Minister Laurel Broten of not respecting the collective bargaining process.

"The government is showing contempt for the bargaining processes that are enshrined in law and that have always worked," he said of Broten's bill introduced Thursday.

She proposed a new "Putting Students First Act" urging the education sector to reach an agreement before Aug. 31, when the current contract will trigger an automatic 5.5% teacher pay hike, which she said would cost $473 million.

Premier Dalton McGuinty said on Friday that he will not declare legislation to impose a new contract on teachers and hinted legislature will be recalled the week of Aug. 26 to impose a two-year contract if teachers haven't signed new contracts with school boards.

Two big unions representing teachers say their members intend to return to the classroom in the fall and the government is creating a crisis where none exists.

"The Ontario government's decision to propose unnecessary legislation against the education workers and school boards of this province is puzzling," Coran said. "Real negotiations take time, and imposing impossible deadlines can lead to unwanted and unnecessary conflict and crisis."

Sam Hammond, president of the Elementary Teachers' Federation of Ontario, said the 76,000 teachers he represents are disappointed with ministry officials.

"To blatantly ignore constitutional rights and the labour relation rights in this province, it's extremely disappointing and problematic," he said.

If the deadline passes allowing teacher contracts to roll over on Sept. 1 and trigger pay raises, the proposed legislation allows the government to claw back the money.