Negotiations in the Luas dispute over pay, appear to have deteriorated this evening with news that the company has threatened to put staff on protective notice, with lay-offs and pay reductions now a possibility, if the strikes continue.

Siptu say Luas operator Transdev, have indicated that they may take civil cases against the workers on grounds that they are in breach of their contracts.

The union says if Transdev commit to their plans, then it is likely that they will ballot Luas workers on an all out strike at the light rail system.

Sources say that at the meeting, workers indicated they wanted increases of up to 18 per cent over a three-year period, including a long service increment of about 7 per cent. This moves move beyond the increases proposed at the Workplace Relations Commission.

It is believed that the original Workplace Relations Commission offer, is no longer on the table.

Siptu's Transport representative John Murphy says there was no real progress at today's meeting:

"I can't recall ever being involved where people have been threatened to have their pay reduced and to be laid off. We have complied with the terms of the legislation to have a lawful dispute with the employer but they seem to be upping the anti. We'll know in the next 24 hours whether they're serious about this.