The Unite trade union has warned that AIB and EBS may face industrial action after talks aimed at resolving a row over a Christmas bonus scheme at the former EBS broke down this afternoon.

Unite represents around 300 workers at EBS, which is now owned by AIB following the restructuring of the Irish banking system.

Unite Official Colm Quinlan said he would be holding a general meeting of members on Wednesday.

He warned that if members decided to back industrial action, pickets would be placed not only on EBS but on AIB.

EBS staff were entitled to a Christmas bonus known as the "13th month".

However, in 2011 the payment was not sanctioned leading to industrial action at EBS.

The company argued that bonuses were prohibited under a Department of Finance "placing agreement" .

The Labour Court recommended that the bonus should be abolished in future, but that the disputed 2011 bonus should be paid.

The company paid half the bonus early last year, but has refused to pay the remainder equivalent to two-weeks salary.

The situation is further complicated by the need for harmonisation of terms and conditions between EBS and AIB following their merger.

There are also difficulties over union recognition - as previously the IBOA was the sole negotiating union at AIB.

Talks at the LRC aimed at brokering a solution collapsed this afternoon after two hours of negotiation.