By Jason Theodorou

BT and the Communication Workers Union (CWU) have averted a potential strike, with the telecoms company reaching a deal with union leaders for a pay rise of 9.3% over 39 months. The two sides could not reach an agreement on a deal lasting one or two years.

BT had offered a 5.1% rise over the course of 21 months, but the CWU had pressed for a 5% rise for 2010-11 after claiming that the company could afford to be much more generous in the wake of healthy profits.

BT said that deal with 'unprecedented', with staff seeing pensionable pay rises worth at least 3% for the financial years from April 2010 to March 2013.

BT Chief Executive Ian Livingston said: 'This agreement is good for BT, its employees, shareholders and customers.... BT will benefit from a long period of certainty, while our employees will have financial stability during uncertain economic times'.

'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'.

CWU deputy general secretary Andy Kerr said:

'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 had planned to ballot its members on strike action, despite the possibility of legal issues due to trade union legislation. Mr. Kerr said the threat of strike action played a major part in getting BT 'back to the negotiating table'.

CWU will hold a consultative ballot of members recommending that they endorse the deal in the coming weeks.

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