Chief Executive of the Labour Relations Commission Kieran Mulvey has said pay increases at Anglo Irish Bank create an appalling vista and difficulty in the context of the negotiations he is involved with.
Speaking at the Public Affairs Ireland Conference in Dublin he said nobody accepts or understands the rationale.
He said pay increases are few and far between at the moment, and in the past year he has only been involved with three areas where increases were awarded.
Earlier, Chairman-Designate of Anglo Irish Bank Alan Dukes denied that pay increases have been granted to some staff at the bank.
Speaking on RTÉ's Morning Ireland, Mr Dukes said some staff members had been paid for taking extra responsibility in the context of down-sizing the bank.
He said this was done to reduce the level of risk to the bank and the level of risk to taxpayers.
A total of 78 people will see their pay increase; 50 are in mid-management, 18 are at entry grades and the remaining ten are in senior management.
Mr Dukes also said a small number of people have been given recognition for the fact that they have earned extra qualifications in the past year.
Opposition parties have expressed astonishment at the news, with Labour Finance Spokesperson Joan Burton describing the move as 'unjustifiable'.
Fine Gael Finance Spokesperson Richard Bruton said: 'This pay rise for core staff is linked directly to the deeply flawed policy on Anglo Irish Bank being pursued by the Fianna Fáil/Green
Government.'
In the Dáil, Fine Gael leader Enda Kenny said the increases are not justified and go to very heart of unfairness.
He said there is a section in the banking legislation that gives the Government authority to deal with this matter.
Labour leader Eamon Gilmore urged Finance Minister Brian Lenihan to direct the bank not to implement the increases until the amounts are known.
In response, Taoiseach Brian Cowen said these wage increases are a management matter and do not come up for sanction at Government level.
A Department of Finance spokesperson said Minister Lenihan only had influence over the general pay scales applied to senior management and directors at Anglo Irish Bank.
A report on last night's Prime Time said it was understood that in some cases the increases could be significant.
Next week, Anglo Irish Bank is expected to announce the biggest loss in Irish corporate history, which could be between €12bn and €14bn.
In a statement, the bank said that prior to its nationalisation, a substantial proportion of staff remuneration was bonus-related, but that was no longer the case - meaning average take-home pay across the bank had been substantially reduced.
