Easons, the Republic's largest book and magazine retail and wholesale chain could face industrial action in the run-up to Christmas because it has not paid staff the special 2 per cent pay rise meant to compensate workers for inflation.
The Labour Court has decided Easons did not have to pay the increase because this "could undermine the position of the company to such an extent as to further the risk to competitiveness and employment".
SIPTU, which represents most of the 1,200 employees, expects members to reject the Labour Court finding.
Branch secretary Ms Chris Rowland said yesterday the company made over £6 million last year and described threats to competitiveness as a "smokescreen". She said: "Staff are entitled to the 2 per cent and we will use all means available to get it."
However the Easons human resources manager, Mr Tony Duggan, said the company had paid employees 17 per cent over and above the terms of the Programme for Prosperity and Fairness.
The union was now "asking for the 2 per cent twice".
The company will pay the second phase of the PPF, worth 5.5 per cent, on December 1st, he said.
This would bring hourly rates up to £8.35 an hour at the top of the scale, one of the highest in the State.
The dispute could cause difficulties for SIPTU because the 2 per cent review of the PPF was agreed on the basis that both unions and employers accepted Labour Court rulings on ability to pay it.
Mr Duggan said that if there was a threat of industrial action the company would refer the dispute to the National Implementation Body, set up to police the PPF.
The dispute could therefore become a test case for other firms where the 2 per cent is in dispute.
So far SIPTU has won cases referred to the court.