July 9, 2010 / 8:19 AM / 10 years ago

UPDATE 2-BT, union agree long-term pay deal, avert strike

* Firm agrees 3 pct annual pay rise with CWU union

* Deal to last for 39 mths

* Shares up 2 pct

(Adds further details, analyst reaction, shares)

By Kate Holton

LONDON, July 9 (Reuters) - British telecoms firm BT (BT.L) has agreed with its main union a new 3 percent annual pay deal to run for 39 months, averting the threat of a mass walk out and boosting its shares after months of public wrangling.

The Commercial Workers Union (CWU) hailed the deal as among the highest pay settlements in the country.

BT and the CWU had been at loggerheads for months after the union asked for a 5 percent pay rise for this year and accused the firm of applying double standards in the way it treated those at the top of the company and those at the bottom.

BT, which laid off 35,000 jobs in the last two years, had originally offered a 2 percent rise and a one-off payment for the more than 50,000 CWU members, prompting the union to launch the first ballot for industrial action at the firm in more than two decades.

That was halted on Monday over fears the company would launch a legal challenge.

“This agreement is good for BT, its employees, shareholders and customers,” Chief Executive Ian Livingston said in a statement.

“BT will benefit from a long period of certainty whilst our employees will have financial stability during uncertain economic times. Industrial action would have been in no-one’s interest.”

The union hailed the 3 percent consolidated and fully-pensionable increase to base pay as a fantastic deal.

ING analyst Lawrence Sugarman said the 3 percent agreement was a decent outcome for both sides and Mark James at Liberum Capital said the agreement should be well received. Shares in BT were up 2.3 percent at 139 pence at 0852 GMT. (Reporting by Kate Holton; editing by James Davey and Simon Jessop)

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