Unions at Iarnród Éireann have accused Minister for Transport, Tourism and Sport Leo Varadkar of using spin and misinformation to suggest that employees had seen major wage increases in recent years.

National Bus and Rail Union General Secretary Dermot O'Leary described as disingenuous the minister's comments on RTÉ's Prime Time last night, giving the impression that rail workers were being paid more now than they were five years ago.

He said they were designed to undermine employees tasked with providing a public service.

Mr O'Leary said the minister's negativity regarding the future of the railway had not served to instil confidence in members at a time when they were being asked to contribute even more.

Meanwhile, SIPTU official Paul Cullen claimed that the increases in average employee costs were in the most part due to the hiring of more managers.

He said that during 2010, 115 manager positions had been advertised, compared to only 24 other traffic positions.

He noted that Department of Transport costs had also increased due to the creation of bodies including the National Transport Authority, the Railway Safety Commission and the Railway Accident Investigation Unit.

Yesterday, unions at Iarnród Éireann rejected cost-reduction proposals.

It is expected the dispute will be referred to the Labour Court.