The UK manufacturer is also re-introducing overtime and has just started a recruitment drive to fill an extra 200 shopfloor vacancies as world markets show the first tentative signs of improvement.
GMB works convenor Gordon Richardson said: “Our members have been through a torrid time over the past two years and it’s welcome news that the union has negotiated a pay rise with the company.
“It is also pleasant to see some former employees back working for the company as part of an on-going recruitment process.”
Alan Blake, JCB chief executive officer, described the deal as historic. He said: “This is the longest pay deal ever to be agreed at JCB and demonstrates a responsible approach by everyone concerned.”
Wage rises take effect from 1 July with subsequent pay reviews linked to the previous November’s rate of inflation taking place on January 1st 2011, 2012 and 2013.
Blake said: “We are pleased to return to the position of being able to offer pay rises to our workforce after a sustained period of uncertainty in world markets.”
He added: “There has been a slight improvement in some markets which has led to some increased demand for JCB’s products and while we can’t say at the moment if this situation will be sustained, we are pleased to be offering overtime and recruiting again.”