Municipal workers called off their threat to strike work from Tuesday midnight after the administration agreed to their demand to implement the sixth pay commission recommendations for them.
This will put an additional burden of Rs 1,500 crore on the civic body. The workers have in turn promised to give better services to the city.
The decision will benefit 1.7 lakh Brihanmumbai Municipal Corporation (BMC) employees and 23,000 contract labourers.
The BMC has asked for 90 days to study the anomalies in the deal and decided to appoint retired secretary P.M.A. Hakim, who has done a similar study for the state government. The deal will be finalised in October.
"The salaries of employees of all grades have got a significant raise and employees will also get medial facilities, gratuatity and provident funds on the pattern as used at the centre," civic union leader Sharad Rao said.
BMC commissioner Swadheen Kshatriya said it was the first time that such an agreement will be in force for ten years. "Till now such deals were in force for five years." He said the deal will be in effect from April 1, 2005 to 31 March, 2015.
Salaries of employees from D grade will raise by Rs 6,517 per month, those from group C by Rs 12,677, group B by Rs 16,661 and group A by Rs 21,531.
The arrears from April 2005 will be distributed during Ganapati festival, Holi and in June. Contract labourers will get a minimum wage of Rs 203 as recommended by the Centre as against the existing Rs 181.