Luas operator Transdev has placed all staff on protective notice with immediate effect and has warned of pay deductions to offset the cost of their industrial action.

In a letter to staff the company said future employment will be on a day-to-day basis and it will impose an "appropriate financial deduction" for unacceptable part-performance of duties.

Staff refusing to perform full duties will be deemed to have removed themselves from the payroll.

Staff who continue the industrial action after 24 April will face pay deductions to offset the cost of the dispute, it said.

The workers have also been given until 17 April - this Sunday - to accept a revised pay offer which is lower than the Workplace Relations Commission proposals overwhelmingly rejected by staff some weeks ago.

Any future offer will be even lower.

At a meeting yesterday, the company told SIPTU representatives they would be writing to employees outlining the consequences of continuing the dispute, including the risk of breach of contract proceedings against employees due to part-performance of their employment contracts.

Transdev Managing Director Gerry Madden said the company will do everything reasonable to ensure it remains as the operator of Luas.

He said the company has a responsibility to its customers but SIPTU is making demands that are unreasonable and that cannot be met.

He added that Transdev does not want a full stoppage of the service and further strikes cannot be tolerated, but it cannot magic money it does not have.

Mr Madden said SIPTU has an opportunity to bring the dispute to an end.

SIPTU divisional organiser Owen Reidy said the union will support Luas members against what he said was aggressive actions by Transdev.

He said the union is now considering a ballot for an all-out strike and Transdev's move makes a negotiated settlement in the pay dispute even more remote.

He accused Transdev of pursuing aggressive measures while operating a multi-million euro publicly funded State contract.

Earlier, Mr Reidy said there were many possibilities to try to resolve the dispute, but said there were others who needed to "step up to the plate".

"I think there are many possibilities but what I think needs to happen is that beyond Transdev and SIPTU, who are the two main actors in this dispute, the other stakeholders who have a responsibility for public transport and the operation of the contract need to step up to the plate," Mr Reidy said.