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Unions have suspended long-running industrial action against a city council after an offer to reverse pay cuts, describing it as a ''substantial change in culture''.
Unite and Unison said Southampton City Council will restore pay rates which were reduced by the previous Conservative administration.
Under a deal with the new Labour-controlled authority, staff earning less than £22,000 will have their wages restored in November, and by April 2014 for those on higher rates.
The unions have been in dispute for more than a year, with workers taking more than 200 days of industrial action.
Unite national officer Peter Allenson said: ''Southampton City Council is the first council to reverse pay cuts since the Tory-led government came to power in 2010 with its disastrous austerity agenda.
''This breakthrough marks a substantial change in culture and it has national significance. Southampton now has a Labour administration willing and eager to treat its employees and the unions who represent them with dignity and respect.''
Unions said £2.3 million is being put back into the wages of council workers, who are being urged to accept the deal in a ballot in the coming weeks.
Councillor Simon Letts, the authority's cabinet member for resources, said: ''I am very pleased that we have made this much progress on staff relations within our first 100 days in office.
''The deal which we have put together with the unions will be a real boost for morale and staff retention and shows just what can be achieved when councils are prepared to engage with their staff.
''I heartily recommend this offer to our staff and hope they will vote to accept this deal.''
Unison branch secretary Mike Tucker said: ''With this agreement the lowest paid get their pay restored this November, and other council workers will get their pay restored over the next 18 months.
''Council workers can now concentrate on providing first class services to the people of Southampton. It was the Conservatives who caused the dispute. Their removal from power has meant that a fair and reasonable settlement is now possible.''
The unions have also postponed planned legal action against the council.