The Building & Engineering Services Association and trade union Unite have struck a deal to provide labour cost certainty for employers until 2016.
Under the new B&ES Operative National Agreement, wage rates and allowances will remain at their current levels until Monday 6 October this year, when a wage increase of 2.5 per cent on all hourly rates will be applied.
The deal applies to mechanical operatives across the building engineering services sector.
A second increase of 3 per cent in the hourly rate and associated benefits will be introduced from Monday 5 October 2015.
Wage increases will also be accompanied by a rise in daily travelling allowances and Premium Rate 1 and Premium Rate 2 (used to calculate overtime rates), as well as other allowances and provisions, including death, disability and accident benefits.
Other changes include a reduction in the working week to 37.5 hours from 38 hours, a cut in the morning tea break to 15 minutes and scrapping of afternoon tea breaks.
Pension contributions will rise to 4 per cent of basic pay in October 2014; to 4.5 per cent in October 2015; and to 5 per cent in October 2016.
An increase in the level of weekly sick pay will be introduced immediately.
B&ES head of employment affairs and skills Peter Rimmer said: “As well as providing operative labour cost certainty over the next two-and-a-half years, the new arrangements significantly enhance productive time by removing the afternoon tea break and limiting the morning break to 15 minutes.
“This has allowed a small reduction in the length of the working week which, effectively managed, should also lessen the need for overtime working.”
He added that B&ES and the trade union will continue discussions around longer-term issues including pension provision under the agreement and “a more structured approach to securing employee contributions”.