Around 300 staff at EBS building society have mounted a one-day strike over the withholding of a traditional Christmas payment known as the "13th month" worth on average €3,000.
The Department of Finance has vetoed the payment of what it views as a bonus, arguing that such payments are prohibited under the ban on bank bonuses.
However, the staff who belong to the UNITE trade union are furious because the 13th month is being paid to managers.
The EBS points out that in 1992, the managers' 13th month payment was consolidated into their basic salary.
They could then choose to be paid over 12 months or 13 months and that any manager receiving the payment this month is receiving basic salary, not a bonus.
They also point out that additional performance related bonuses, which managers became entitled to from 1992, had not been paid since 2008.
However, the 13th month for general staff was a bonus.
EBS has offered staff an interest-free loan in lieu of the Christmas payment, although they would be liable for benefit-in-kind tax on the loan.
The situation has been complicated by the fact that EBS has merged with AIB, and bonuses are prohibited under the AIB "placing agreement".
Unite says that the staff whose payments have been withheld earn an average of €30,000.
Around 70 staff picketed outside EBS Head office in Dublin's Burlington Road, with further pickets in Tallaght and Co Limerick.
UNITE Regional Officer Colm Quinlan warned that the union would escalate the industrial action if members did not receive the Christmas payment.
He pointed out that the 13th month for general staff could not be a bonus, as it was paid in 2009 and 2010 when the company accounts stated that no bonuses were paid to staff.
The Department of Finance acknowledged the employees had a legitimate grievance regarding the communication of the non-payment by EBS management.
However, a spokesperson pointed out that it had been made clear to EBS management on a number of occasions that such payments were a non-runner.
The Department rejected claims by Unite that it is re-examining the issue.
