It is the latest in a series of confrontations between the University and College Union (UCU) and the college management, after rows concerning the sacking of English language teachers last year and over the treatment of its large number of prison education staff.
The dispute also reflects growing discontent across the country.
There have been strikes in London and ballots for industrial action at four colleges in the West Midlands - South Birmingham College, Birmingham Metropolitan College, City College Birmingham and City of Wolverhampton College - where up to 160 jobs are under threat.
The union says the two-tier workforce in Manchester is impractical and would lead to extra hours and a loss of holiday for those on the inferior contracts.
Christiane Ohsan, UCU national official, said: "The disarray that will be created by this unworkable two-tier system will leave the college creaking at the seams with potential discrimination and dismissal claims, and consequently unable to defend itself in the face of likely government funding cuts."
The college's proposals are in line with trends in central government spending, however, as funding for 16- to 19-year-olds is ringfenced while other areas face cuts.
Pay is also emerging as a major source of potential conflict. Colleges argue that funding cuts this year make it impossible to propose a substantial increase, with employers offering just 0.2 per cent. With most colleges shedding jobs, few are likely to be able to afford higher pay.
But unions point to inflation riding high at 5.3 per cent, meaning the offer is a substantial real-terms cut. The rapid increase of college principals' pay in recent years, at more than double the rate of other staff, has also fuelled their anger.