Public sector trade unions have said they will meet in January to prepare industrial action ballots if the Government fails to conclude a new public service pay deal in the meantime.
The existing agreement, Building Momentum, is due to expire at the end of the year.
Talks on a new public sector pay deal were adjourned last night without agreement with no date set for the resumption of negotiations.
Unions said they remain available to re-enter talks over the coming days but that they do not expect the negotiations to restart before the current deal expires.
Taoiseach Leo Varadkar said the Government is keen to get agreement with public servants on a new pay deal, but he added that inflation is now falling.
He said the rate of price increases is "coming under control" with inflation predicted to be around 2% to 3% next year.
He said the Government acknowledged that recent pay increases have not kept pace with inflation and that should be taken into account.
But he added that the Coalition would argue that there were many years when public servants' pay increased above the rate of inflation.
The Public Services Committee (PSC) of the Irish Congress of Trade Unions (ICTU) met today to discuss next steps and will meet again on 11 January to sign-off on the wording of ballots for industrial action, if a new pay deal is not agreed by then.
"It's now unlikely talks will resume before Christmas, although we did express our willingness to meet over the next few days in order to conclude a deal," said Fórsa General Secretary Kevin Callinan, who also chairs the PSC.
"However, it remained clear last night that the Government can't or won't conclude a deal in that time, and has indicated it would prefer to resume negotiations in the new year," he said.
"There's been no discussion so far in relation to pay. Nevertheless, we feel that if there had been a genuine push this week, it may have been possible to continue to close out the remaining issues and move onto the pay element of negotiations," Mr Callinan said.
Unions have expressed concern and disappointment at the slow pace of the talks.
INMO General Secretary Phil Ni Sheaghdha said unions would now need to step up their campaign to secure cost-of-living pay rises.
"If members can't vote on a pay deal in January, they will instead need to vote for a course of appropriate action," Ms Ni Sheaghdha said.
SIPTU Deputy General Secretary John King said unions had a strong mandate from their members to secure a pay deal.
"The Government is allowing a deal to lapse without a successor in place, so we will find ourselves in unusual industrial relations circumstances come the 1st of January," Mr King said.
INTO General Secretary John Boyle said the new year will start with a high level of uncertainty both for unions and Government.
"In that instance we need to prepare the ground for a dispute, as the absence of a pay agreement creates uncertainty," Mr Boyle said.
'Regrettable' unions threaten industrial action
The Minister for Public Expenditure has said it is "really regrettable" that unions have threatened industrial action if a new pay deal is not agreed before the end of this year.
Paschal Donohoe said he had given unions a commitment to deal with issues around FEMPI legislation to try and bring momentum and goodwill into the process but he said new issues emerged in recent weeks that have had an impact on the duration and length of the process.
"I do think it's a real pity that we've got to this point today," he said.
"I certainly want to reflect on that but it won't diminish my commitment to bringing forward a proposal on public pay with the aim of reaching a multi-year agreement."
Asked if the Government would put forward a pay proposal before the end of 2023, Mr Donohoe said he wanted "to reflect on what's happened today" and he said that he believes all sides involved in the process need to do the same.
He said they had been involved in a process over many weeks and that he had made a major concession in relation to public pay.
The minister said despite making that concession "we've ended up where we have today".
"I think it's really important that both sides consider how we move this forward. To me what is more important that can bring forward and reach agreement on a proposal that is fair and one that is affordable and its now really important that we get that right."
Earlier this month, as part of the pay talks, the Government agreed to repeal emergency industrial relations legislation introduced during the financial crisis.
Unions had asked for the removal of the legislation claiming it had made it too difficult for individual sectors and grades to have issues addressed outside of the scope of existing pay deals.
The Department of Public Expenditure and Reform has said that its aim is to reach a mutually acceptable outcome that is fair, reasonable and affordable for public servants and taxpayers.
If a new agreement is reached, it will mean a pay increase for 385,000 public servants including nurses, doctors, Gardaí and teachers.
Additional reporting Samantha Libreri
