British Gas's 8,000 engineers will get a "landmark" 11.3 per cent wage increase in exchange for working a 45-hour week in the winter to tackle the increase of blackouts.
The GMB union and Centrica, British Gas's FTSE-100 parent company, have turned around hostile relations and are close to finalising a remarkable deal to be implemented on 1 November. A typical engineer earning £30,000 will get a 3 per cent increase backdated to April this year, followed by another 2 per cent in April 2011.
Engineers will also receive a £1,000 cash bonus this Christmas and next, so the deal is worth more than 11 per cent to the typical employee.
Although they will suffer long hours between November and February, the engineers will work only 28 hours a week between May and August, when there is less strain on the electricity network. The engineers will even be able to choose one summer month when they work a three-day week.
The innovative flexible pay deal is part of Centrica's drive to improve customer service, which suffered across the industry last winter due to energy supply shortages. Last week, British Gas confirmed trials of an emergency service that will see engineers hop on to scooters so that they can react quickly to telephone calls to fix boilers.
Gary Smith, the GMB's national secretary for energy, said that he did "not underestimate how difficult some of the changes will be" for the union's members, such as working weekends from November to February. It is understood that there is some disquiet among members as the cold-snap months are already stressful for engineers, though others recognise that summers will be far more relaxed.
"The company made it clear that they were going to change the customer promise to keep up with changing customer demand," said Mr Smith. "GMB is not a union that will be rolled over. However, when the chips are down, we are the union that you can do business with."
The deal marks a remarkable thaw in relations between British Gas and the union. In March, the workforce voted for strike action as a result of what the GMB's general secretary, Paul Kenny, described as British Gas's "culture of bullying, customer exploitation and profits at all costs".
However, Mr Smith said that the pay bargain is "only the start", adding: "Hand-in-hand with the change to the customer promise will go changes in management culture and the approach to working with GMB."
Chris Jansen, British Gas Services & Commercial managing director, said: " The outcome of four months' intense work and consultation is this landmark deal, which will allow us to make the necessary changes to British Gas.
"They [the GMB] have demonstrated they can make changes in a mature and sensible way. We must now show we can use all the experience it has to help run a more effective business."