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BT Group Agrees to 39-Month Pay Deal With Union, Ending Threat of Strike

BT Group Plc, the U.K.’s biggest fixed-line phone company, agreed to a 39-month pay deal with the Communication Workers Union after the labor group came close to strike action.

BT and the CWU agreed to a revised pay package of an annual 3 percent increase in pay from April 2010 to March 2013. The pay rise will be backdated to January, BT said today in a statement. The CWU will recommend the deal to its members.

The union, which represents more than 50,000 BT workers, reached the accord after balloting members for what would have been the first companywide strike in 23 years. The strike ballot was canceled on July 5 because of legal technicalities.

“This agreement is good for BT, its employees, shareholders and customers,” BT Chief Executive Officer Ian Livingston said in the statement. “BT will benefit from a long period of certainty whilst our employees will have financial stability during uncertain economic times.”

BT climbed 2.1 percent to 138.8 pence at 9:39 a.m. in London trading.

The CWU had asked for a pay increase of 5 percent for this year after Livingston slashed jobs to combat falling sales amid the economic slowdown. The strike would have been the first national industrial action at BT since 1987, according to the CWU, whose members work in engineering, call center and retail positions.

“Although our ballot for strike action was ultimately withdrawn, we believe it played a major part in getting BT back to the negotiating table with a significantly improved pay offer,” Andy Kerr, CWU deputy general secretary, said in a separate statement.

BT had asked managers to stand by to help fix telephone services and field customer calls, two people with knowledge of the company’s plans said this month. They declined to be identified as the preparations were confidential.

The pay deal is the longest agreed between the company and the union, according to Dan Thomas, a BT spokesman.

To contact the reporter on this story: Jonathan Browning in London jbrowning9@bloomberg.net.

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