The union representing some of the 1,300 workers due to be sacked by the further education funding body is claiming millions of pounds in compensation.
The Public and Commercial Sector union says the Learning and Skills Council was legally obliged to hold "meaningful consultation" with staff over the mass redundancies - but failed to do so.
If its legal claim is successful, the sacked staff will be entitled to 90 days' pay in compensation, landing the LSC with a bill for several million pounds.
But the council strongly denies it has breached employment law, saying it began consultation weeks before it was legally required to.
Sally Stewart, human resources director at the LSC, said it began informal talks with the union five weeks before the statutory consultation period.
Over the past 90 days, she said the LSC has been meeting weekly with national officials, as well as holding regular regional meetings.
The council has shared information and sought an agreement on the selection process for redundancies and redeployment of staff, she said. "This is an extremely disappointing move by the PCS," she said. "We have consulted with them on all aspects of our re-organisation and agreed early in the process that union representatives could focus on negotiations relating to the reorganisation, instead of their day-to-day jobs at the LSC.
"We intend to vigorously defend the claim made by PCS."
The cuts are part of reforms intended to scale down operations at the 47 local LSC offices and give more power to the nine regions. More than one in four of the council's staff will be made redundant: most of the cuts are expected in administrative and technical jobs.
Red tape and duplication of planning will be avoided by giving strategic work to regional offices, leaving local offices to identify local training needs and co-ordinate the work of colleges and training companies.
Planning "would be more effective if done nine times rather than 47," the council has suggested.
College leaders have cautiously welcomed the plans, arguing that there is scope to make savings as long as money is ploughed back into front-line services.
But the union says that, after 800 job losses in 2003 and 2004, reducing staffing further will damage the council's effectiveness.
The PCS has already threatened to strike over the latest cuts, before submitting its legal challenge.
The law requires employers to try to avoid redundancies, or reduce their number, by consulting with staff, "Consultation should be genuine and undertaken with a view to reaching agreement with the employees'
representatives," the Department of Trade and Industry says. "Employers and employee representatives should work together to try to find common solutions."
If employers do not consult, staff can submit a claim to an employment tribunal for 90 days' pay in compensation.