Management and union representatives at the Shelbourne Hotel, Dublin, are to meet today over plans to close for 18 months for refurbishments.
Siptu, which claims to represent 100 of the hotel's 247 employees, is seeking an improvement in the redundancy package on offer.
Kieron Connolly, the union's hotel and catering branch secretary, said the terms were unacceptable given the length of service of some employees.
All staff are to be made redundant under the proposals. Some may be rehired once the refurbishment is completed, but no guarantees are being given.
Under the company's plans, employees with more than two years' service will be paid 5½ weeks' salary for each year of service. Siptu is seeking to have this raised to 6½ weeks' salary.
The union is also looking for the removal of a 130-week payment cap, which penalises anyone with more than 23 years' service.
In addition, it wants management to increase the service charge payment included in salaries. The union says management is using a service charge payment based on last year's takings, which, it says, were lower than normal because of uncertainty over the hotel's future.
The closure has been earmarked for April 4th. However, a hotel spokeswoman said a date would not be finalised until consultation with staff and union representatives concluded.
Mr Connolly said Siptu would take its claim to a third party if there was no improvement in the offer. He said the cap would have a very significant effect on payments for up to 20 long-term staff.
"It is unacceptable that people who have given their whole working life to the Shelbourne are being treated this way in a situation where the owners are going to make a very significant return on their investment," he said.
There was general dissatisfaction among employees about the decision to close, and that other options - such as a phased refurbishment programme - had been ruled out.