The general secretary of the Financial Services Union (FSU) John O'Connell has accused Ulster Bank of treating its staff "very shabbily".
Staff had been kept in the dark and they now needed clarity and certainty, he told RTÉ Radio's Morning Ireland.
Mr O'Connell called on Ulster Bank CEO Jane Howard to give staff certainty that when loans and work transferred to new owners, that the jobs would "go with them."
“This is a very bad morning for Ulster Bank staff,” he added. There were 2,800 jobs in the Republic and 600 further jobs in Northern Ireland at stake, he said.
Protecting those jobs must be a priority for the parent company Nat West, for the companies interested in taking on the loan books and for the Minister for Finance, he urged.
There must be “a clear strategic plan” he said.
The FSU was studying the proposals and was expecting to receive the memorandum of understanding later today, which would be examined in great detail.
There was “a little bit of time to get this right” he added. The maximum number of jobs should be transferred with the loan books, he said, that should be central to any transfer of the business sections.
Permanent TSB and AIB are set to say on Friday that they are in talks to buy parts of UK-owned Ulster Bank's €20.5 billion loan book in the State.
Talks between the two banks and Ulster Bank's parent NatWest, advised by Goldman Sachs, were continuing on Thursday evening as the board of the UK group weighed proposals around the planned Irish exit.
“It is vital that staff and customers are given clarity on Friday on the future operations of Ulster Bank in the Republic of Ireland. If the speculation proves to be correct, the focus of the FSU will be to ensure the maximum protection for staff jobs and the retention of the branch structure,” said Mr O’Connell.
“Staff must have the option of transferring with the work, and their terms and conditions must be maintained and honoured by any potential purchaser.”
On Thursday morning Ulster Bank’s chief executive in the Republic, Jane Howard, told the lender’s 2,800 staff that “no decision” had been taken at that stage on the future of the company.
It follows The Irish Times reporting that the board of NatWest was poised to decide on a proposal to wind down the Irish unit after more than 160 years in the market – ahead of an official announcement on Friday morning as the group reports full-year results.
“As predicted, there is increased media speculation in the run-up to the publication of results 2020. This is not how we choose to communicate with you or our customers,” Ms Howard said in a note to staff.
“I know the level of uncertainty is escalating, and naturally you are frustrated at the lack of clarity. You have heard me say before that speculation is outside our control and again, I reiterate that as soon as I can, I will update you.”
It is understood that AIB, led by chief executive Colin Hunt, is looking in particular at Ulster Bank's corporate and medium-sized business book, potentially amounting to €4 billion of loans.
Permanent TSB (PTSB), where Eamonn Crowley is CEO, is circling Ulster Bank's smaller business loans and a portion of its mortgage book.
A deal with AIB, which shares most of the business banking market with Bank of Ireland, would face close scrutiny from competition authorities. PTSB may need additional capital, depending on the size of the transaction.
A spokesman for 71 per cent State-owned AIB and a spokesman for PTSB, in which taxpayers hold a 75 per cent interest, declined to comment.
A spokeswoman for NatWest also declined to comment.
Tánaiste Leo Varadkar told the Dáil on Thursday that the Government was exploring the establishment of a so-called third banking force, with Minister for Finance Paschal Donohoe "assessing all options" to protect customers and minimise job losses and to avoid compulsory redundancies wherever possible.
Mr Varadkar told Sinn Féin finance spokesman Pearse Doherty that "a third force that would be able to compete with Bank of Ireland and with AIB, that is something I support, something the Government supports, and if it's possible to develop a solution on those lines".
This suggests that a material loan transaction with PTSB may be on the cards.