The Irish Bank Officials Association (IBOA) is to recommend rejection of the proposed partnership deal to its 13,000 members.
The decision, the first of its kind by the IBOA, was taken at a monthly meeting of the union's Executive Committee today. The issue will be put to members in a ballot.
IBOA General Secretary, Mr Larry Broderick said after the meeting that "having examined the agreement in some detail it is clear that this agreement does not address the key issues raised by IBOA as part of these talks."
"The 7 per cent increase over 18 months falls far short of the reasonable expectations of our members who work in an industry which last year made over €3 billion profit.
"In real terms it means a 3.5 per cent increase over 12 months, which will be less than inflation and will result in the erosion of bank officials' real pay position."
Last night the teachers' union the INTO said it would be recommending the proposed agreement and the Benchmarking agreement to its 24,000 members.
At a meeting late last night the central executive committee decided to accept the combined pay deals which will offer teachers phased pay rises of nearly 22 per cent from now until mid-2005 including a lump sum of up to €2,500 if the package is accepted.
INTO president, Mr Gerry Malone said: "There are some acceptable aspects to this proposed deal. Equally there are unpalatable parts to it."
However, he said the pay rise on offer must be secured and transferred to teachers' pay packets without further delay.
Other teachers unions have been slower to welcome the deal. The Association of Secondary School Teachers of Ireland has stressed that the issues of supervision and substitution are separate to Benchmarking awards.
The union has not decided whether to ballot its members on the pay increases recommended for teachers under the deal.
The other secondary school teachers' union, the TUI, has decided to put the issue to a ballot but without a recommendation.