Jaguar Land Rover and unions representing its British workers have struck a new pay deal, enabling the automaker to avert the threat of industrial action.

The UNITE union will recommend that its members accept the revised pay offer from JLR following detailed negotiations on pay and conditions, the union and the automaker said in a joint statement on Tuesday.

In a ballot last month workers voted to overwhelmingly reject the existing pay and conditions offer made by JLR, and unions warned JLR to return to the negotiating table or face an industrial action ballot.

While JLR argued that that three-year pay deal — which included a pay rise of 3.6 per cent in the first year and a bonus, and 3 per cent in the following two years — amounted to an effective pay rise of over 7 per cent in the first year and 14.1 per cent over a three-year period, unions argued that it did not meet expectations, particularly given JLR’s profitability. They also expressed concerns about changes to the pension scheme, and the time it took new workers to achieve full pay rates.

The revised offer covering a two-year period includes a 4.5 per cent pay increase with a £825 bonus per employee in the first year, as well as 3 per cent or 0.5 per cent on top of the inflation measure, the Retail Price Index, which ever figure is higher. It does not, however, include pension proposals.

“This pay offer includes recognition of Jaguar Land Rover’s recent performance for employees and agreements on working practices with UNITE that ensure that the Company can meet its business plan commitments,” the joint statement said.

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