The Communication Workers Union (CWU) has secured a two-year pay deal for employees of O2 UK, a subsidiary of the Spanish-owned Telefonica network.
The deal, which the CWU is recommending that its members accept, equates to a 2.5 percent pay rise this year and 2.75 percent in 2011.
Negotiations have been taking place with O2 for the last seven months according to the CWU, with an offer of a 2 percent rise having been rejected on 19 March on the basis that it didn't reflect "the enormous contribution made by members to O2's continuing success".
The deadline to vote on the new pay proposals is 19 August, which if accepted leaves enough time for the extra cash to be reflected in the August pay packet of the approximately 3000 call centre, retail and engineering staff at O2 that the CWU represents.
"This is undoubtedly the best deal we could achieve through negotiation. As a two-year deal it provides stability to both staff and the company and we hope that members will vote to accept this offer," said Andy Kerr, deputy general of the CWU in a statement.
Meanwhile, long-running CWU negotiations (which included the proposal of a ballot for strike action) with BT have resulted in members' acceptance of a three-year deal equating to a 9.3 percent pay increase.
86.6 percent of members voted to accept the proposed increase which will be backdated to 1 January and added to August salaries, according to an announcement made by the CWU on 5 August.
"This pay deal provides stability and security for both staff and the company. It's within the top range of pay settlements in the UK this year and provides certainty for our members at a time of economic instability," said Kerr in the statement.