More than 1,700 lecturers in further education (FE) colleges have been told they will not receive a £3,000 one-off payment they had expected this month.
The University and College Union (UCU) said the damage to industrial relations was "immeasurable".
The employers in the six FE colleges said the Department for Economy (DfE) would not approve the payment without agreement on a wider pay deal.
DfE said it encouraged the colleges to continue to engage with unions.
There are six further education colleges in Northern Ireland with more than 50,000 students studying hundreds of courses.
The UCU and NASUWT are the unions who represent FE lecturing staff.
The starting salary for a full-time FE lecturer in Northern Ireland is about £24,000 a year, although some staff work part-time or are paid on an hourly basis.
But there has been stalemate over a pay deal for lecturers in Northern Ireland for over two years.
