Staff working for the Transport for Wales train service are being balloted for strike action over pay.
The TSSA union said it was “extremely disappointing” that the Welsh government-owned train service had offered a below inflation pay rise.
It warned of “significant disruption” to the railway network if members, which include station staff and depot managers, vote to walk out.
Transport for Wales said it will be meeting representatives from the TSSA and is “confident of working together to find a resolution”.
The union said it had rejected a “below inflation” offer of 3.5% for the first year and pay linked to the retail prices index-rate of inflation for year two.
Inflation currently stands at 2.2% under the consumer prices index, but BBC Wales was told it was higher when negotiations began.
TSSA general secretary Maryam Eslamdoust, said: “We are balloting our members for industrial action as a last resort but feel we have no option but to take this course.”
She added: “TfW should be in no doubt that our members are deeply unhappy with the situation – one which the company could alleviate and stop significant disruption to the railways, by making an improved offer which meets our aspirations.”
A spokesperson for TfW said: “We will shortly be meeting with representatives from the TSSA and are confident of working together to find a resolution.”