British diplomats will be on duty today to keep the British embassy in Dublin open to the public during a one-day strike by Irish staff, who are protesting at the forced redundancy of three colleagues.
The increasingly bitter dispute has emerged following a decision by Britain's foreign and commonwealth office to increase its presence in growing markets such as China at the expense of embassies where British business needs less help.
Last night, Colm Quinlan of trade union Amicus urged members of the public not to pass today's picket at the Merrion Road embassy: "But nobody will be prevented from going in, or harassed if they do," he said.
Three staff - the longest of whom has about eight years' service - have been offered packages worth up to €80,000 to leave, though the union has raised strong objections about the way in which the people chosen for redundancy were selected.
The 50 Irish staff employed by the embassy are all hired as self-employed contractors and do not pay PAYE, though the British embassy sharply denied that it had ever been told to start dealing with any of them as PAYE workers.
In a parliamentary reply yesterday, the Minister for Finance, Brian Cowen, told Labour TD Ruairí Quinn that the Department of Foreign Affairs had "encouraged" all diplomatic missions in Ireland in June 2005 "to operate the PAYE system on payments made to local staff".
"I am further informed by the Revenue Commissioners that they will provide information and assistance to any embassy wishing to register for, and operate, the PAYE system on payments to locally engaged staff. In addition, they will deal with any queries embassy staff may have as regards PAYE matters," he said.
However, Amicus last night alleged that the Revenue Commissioners had made it clear at a meeting last September with the embassy that local staff must pay PAYE, rather than self-employed taxes, and that while "a blind eye" had been turned to the matter before this would no longer happen.
Last night, a spokesman for the British embassy said he had never been told by the Irish authorities that it had to treat all its local staff as PAYE employees.
The issue of the tax laws that govern locally hired staff has been at the centre of disputes before between the Irish authorities and international diplomats, and led to a court action by the Canadian government.
Diplomats do not pay Irish taxes, but rather continue to pay the rates that they would if they were still at home, while Irish staff working in sensitive positions in an embassy are generally treated the same way, the Department of Enterprise, Trade and Employment said.