The firm looks after around 37,000 homes in the south and west of the city and had already been given a three-month period to raise its game back in April.
The firm has now received a final ultimatum of the end of the year to improve its performance on the £35m contract.
In August, Morrison attempted to change the pay banding of its 220 strong workforce on the framework, but was forced to climb down after staff threatened strike action.
Morrison Facility Services, owned by Anglian Water, has experience problems on other contracts this year seeing two contracts terminated in London, one with Paragon Housing Group in Richmond and the other with Southwark Council.
Thurrock Council also warned the firm last week that it would not be seeking to extend its five-year term contract just over two years into the deal because of performance issues.
Morrison was not available for comment.