Revenue Commissioners' staff in Waterford are to ballot on industrial action over the rejection of a claim for "disturbance money".
About 150 workers are seeking compensation for moving from their present building at the Glen, which is to be refurbished over the next 15 months. One of three unions representing staff, the CPSU is threatening a sit-in if the claim is not met.
Contracts for the £17 million project, which is to start this month, were signed on Friday by the Minister of State for Public Works, Mr Martin Cullen.
He said the refurbishment would change the character of the building from "a dull concrete tower block to a softer, curved, glazed structure, which will enhance the Waterford skyline".
A facelift was promised by the OPW two years ago and it was later decided to carry out a total refurbishment of the exterior and interior.
Revenue staff are to be accommodated at two other city-centre buildings, both within a mile of the Glen. A claim for disturbance money was rejected by management on the grounds that it was not Government policy to pay compensation of this type.
However Mr Derek Mullen, national officer with the CPSU, which represents about 60 of the staff involved, claimed the Government set a precedent last year when compensation was paid to Dβil staff who had to move while renovations took place.
A Revenue spokeswoman said a formal claim for disturbance money had not been made.