D.C. Mayor Barry formally notified the City Council yesterday that he intends to give city workers a pay increase of about 5 percent in the fiscal year that begins today, but the union's representing the employes continued to insist on negotiations and succeeded in keeping the issue alive.

The unions want at least the same 9.1 percent that their counterparts in the federal government are getting, but the immediate issue is their demand that the rate be set only after collective bargaining -- to which the city's new labor relations law entitles them.

In a rare display of unanimity, all the unions -- including some that have traditionally been rivals -- petitioned the city's Public Employee Relations Board (PERB) yesterday to certify them, collectively, as one bargaining unit for the purposes of this year's salary negotiations. That was an attempt to circumvent provisions in the law that say there can be no salary negotiations until the PERB has certified groups of workers in similar jobs -- regardless of what unions they belong to -- as bargaining agents for the employes.

Barry told a press conference that it was a "good labor ploy" to submit the petition for bargaining status at "the 11th hour and 59th minute," but he said it was too late to enter into collective bargaining for the coming year because the unions "had all spring and summer" to petition for bargaining certification and failed to do so.

Since no collective bargaining is legally possible, he said, the decision was solely up to him, and he had no choice but to make the "agonizing" decision to hold the increase at 5 percent. To give the unions the 9.1 percent pay boost they want, he said, would require him either to raise $32 million through tax increase or lay off another 3,360 workers.

The union petition, handwritten on yellow legal paper, was submitted yesterday morning to former secretary of labor W. Willard Wirtz, who is chairman of the PERB. The petition did not ask PERB to do anything about the wage issue, which it has no authority over, but only to waive the complex procedures of the law and certify the unions as one bargaining agent, which would force the mayor to negotiate instead of deciding unilaterally on the pay increase.

At a meeting between union leaders and PERB, Abe Zwerdling, counsel for the American Federation of State County and Municipal Employees, which represents half the city's 32,000 workers, told Wirtz, "The unions are asking PERB to help us make collective bargaining mechanism is not in place, then the old system of parity with federal workers is in place. If the new system of collective bargaining is in place, then there has to be bargaining."

The District government's position, reiterated at the meeting by chief labor negotiator Donald Weinberg, is that the legal procedures for entering bargaining over pay for the first time under home rule have not yet been completed, so the unions should take the 5 percent for this year -- which is all that Congress has appropriated anyway -- and concentrate on starting negotiations in 1982.

Wirtz, however, said position did not form a useful basis for discussion. He called all the participants to a new series of meetings next week to consider changes in the personnel law and the union's request for collective certification. He did not say he favored granting it, but he promised the unions they would have "our best effort" at resolving the difficulties. Union leaders, emphasizing their new-found solidarity, said they would take part.

City Council member John Ray (D-At Large) offered a compromise yesterday. He proposed to give a pay increase of 7 percent to those workers whose salaries are less than $30,000 a year, with those above that dividing up whatever funds remain. William Simons of the teachers union and William Hoyle of the firefighters rejected it as an impractical idea that would erode incentive and disrupt pay differentials that have been established over many years.

Barry also said he had considered that idea and rejected it because it "would set one group of workers against another."