BT has agreed a pay deal with union leaders, in a move that will avert a strike if approved by workers at the telecoms and IT firm.
The 39-month deal will see all BT workers "receive pensionable pay rises worth three percent each financial year from April 2010 to March 2013 with the rise being backdated to January 2010", the telecommunications and services giant said in a statement on Friday.
The Communication Workers Union (CWU) described the rises, which amount to a 9.3-percent increase over three years, as "fair". The union, which represents around 60,000 of BT's 96,000-strong workforce, will hold a consultative ballot of its members within the next few weeks, recommending that they accept the agreed deal.
"Following a very difficult set of negotiations and the first national ballot for strike action in BT since 1987, we're delighted to have resolved this pay dispute through talks," CWU deputy general secretary Andy Kerr said in a statement.
"This is a fantastic deal for our members, providing a fair rise in their basic pay this year and for the following two years. This deal is among the highest pay settlements in the country this year, recognising the contribution of staff and BT's success over the last year."
The CWU threatened the strike ballot at the end of May. At the time, the union was asking for a five percent pay rise, but BT was only offering two percent from April 2010 and three percent from January 2011, plus a bonus of between £250 and £500. The ballot was withdrawn on Monday, following legal advice that the ballot would have breached trade union laws.
"Although our ballot for strike action was ultimately withdrawn, we believe it played a major part in getting BT back to the negotiating table with a significantly improved pay offer," Kerr said.
The agreement is "good for BT, its employees, shareholders and customers," the company's chief executive Ian Livingston said in BT's statement.
"BT will benefit from a long period of certainty while our employees will have financial stability during uncertain economic times," Livingston said. "I am pleased that we have been able to work with the union's leadership to resolve this matter, as industrial action would have been in no one's interest."
Shortly before the announcement on Friday, Ovum analyst David Molony noted that a strike would not have brought down BT's network itself, as that is now "automated and intelligent". However, he pointed out that BT is now a services company, and even a short strike would have affected its managed services and hurt the firm financially.