Staff at the British Embassy in Dublin have called off a second day of industrial action planned for tomorrow.
Up to 40 members of the Unite union staged a one-day protest on February 7th.
However the union tonight announced a breakthrough in talks with Embassy representatives.
The row broke out after three Irish workers were told they faced being made compulsorily redundant.
A Unite spokesman said tonight: "Revised severance terms for the three managers at the heart of the dispute have been tabled and Unite will recommend their acceptance at a general meeting of staff on Friday.
"Discussions are ongoing over a number of other issues including a pledge on how future relations between the embassy and staff will be conducted, and a resolution of outstanding claims."
"We are pleased that we have come to what we believe is a fair resolution.
"The individuals concerned have now been treated with dignity and fairness, and that is what was always paramount.
"With that issue resolved we are confident that the future is a lot brighter for workers at the embassy and at the ambassador's residence."
The Embassy's trade and industry staff as well as passport section workers, administration and household staff joined the first one-day strike earlier this month.
The union insisted compulsory redundancies fell outside agreed procedures drawn up to deal with disputes since 2003.
PA
