A second one-day strike at the British Embassy in Dublin that was set for tomorrow has been postponed by 24 hours as talks continue this afternoon.
Last Thursday, Irish staff at the embassy held a one-day strike in protest at the forced redundancy of three colleagues.
Informal contact was made over the weekend between the Unite trade union, embassy officials and former Labour Court chairman Finbarr Flood.
Those contacts developed into talks which got under way this morning and are continuing this afternoon in Dublin.
"There is some prospect of progress," said United regional officer Colm Quinlan, speaking during a break in the talks. "In order to give that prospect some room to develop, we have decided, at the request of Finbarr Flood, to postpone our action by 24 hours.
"We will reconvene a general meeting of staff tomorrow afternoon to either put a proposal or confirm the action for Thursday."
The dispute has emerged following a decision by Britain to increase its presence in growing markets such as China at the expense of embassies where British business needs less help.
Three staff - the longest of whom has about eight years' service - have been offered packages worth up to €80,000 to leave, but the union has raised strong objections about the way in which the people chosen for redundancy were selected.
The 53 Irish staff employed by the embassy are all hired as self-employed contractors.