The threatened loss of nearly 300 jobs to Dundalk as a result of the closure of the Guinness packaging plant and downsizing of its brewery has been temporarily averted.

The Joint Union Forum (JUF) yesterday confirmed that its chairman Mr Brendan Hodgers of the ATGWU would meet the head of employee relations, Mr Kevin Walsh, on Friday, to agree a schedule for negotiations on any job losses.

Last month the company announced it had to make the cutbacks because of high labour costs and increased competition in the drinks industry.

"There is definitely huge change coming but it will be negotiated change now and not imposed," said one union source yesterday.

The breakthrough came with the agreement by Guinness to take part in agreed industrial relations procedures and followed two separate interventions by the Labour Relations Commission.

It is thought that the company was extremely uncomfortable with the adverse coverage it attracted in the media including the decision by the JUF to ballot employees in all nine Guinness plants around the Republic for all-out strike action if the threat to Dundalk was not lifted.

Union sources believe that a number of jobs will be lost as a result of the negotiations but they will be through natural wastage, lowering the age profile of the remaining workforce and "it is 50/50 whether we can secure agreement that the packaging stays here". Cheaper labour in Belfast was a major factor in the decision to close the Dundalk plant but workers there have decided they want more money.

"Their approach has succeeded in uniting every site in the country and highlighting to the lads in Belfast how badly paid they are. They are now preparing to submit a claim for a substantial wage increase," said a shop steward in Dundalk.