It follows a decision to place all Luas staff on immediate protective notice.
Owen Reidy of the Services, Industrial, Professional and Technical Union (Siptu) told RTÃ‰ that Luas operator Transdev would cripple the service by its actions.
Transdev has also warned of pay deductions to offset the cost of staff who continue industrial action.
In a letter to staff, Transdev 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.
Mr Reidy said it was not "reasonable, sensible or logical" to issue an inferior set of proposals to staff following their rejection of a better deal.
He said it was a "provocative act" and that the dispute had entered a "new area".
Mr Reidy said a decision would be made on balloting for all-out strike action over the next couple of days.
Earlier this month, drivers on the Luas tram system served notice of further strike action later in April and May over a pay dispute.
Siptu said strikes would take place on 28 April, 4 May, 13 May, 20 May, 26 and 27 May.
A further two-day strike had already been scheduled for 23 and 24 April.
The drivers have been on strike for eight days so far this year.
The escalation of the strike came after a deal brokered by the Workplace Relations Commission in March was rejected by workers.
Transdev has said it does not want a full stoppage of the service and further strikes cannot be tolerated, but it cannot create money it does not have.
It has said Siptu is making demands that are unreasonable and that cannot be met.
A trade union has said a shutdown of the Luas tram system in Dublin appears "inevitable".