The deal, agreed in a fourth round of talks, came after an escalating series of one-day walkouts by staff at Europe`s largest telecoms company that coincided with industrial action by public sector workers also represented by Verdi.
Most Deutsche Telekom staff will receive a pay rise of 3.1 percent on May 1, followed by a 2.1 percent increase a year later. More highly paid staff will get consecutive pay increases of 2.7 and 2.1 percent.
Compulsory redundancies were ruled out until the end of 2020. Also, workers at Deutsche Telekom`s main operating units will get 14 days extra days off from next year in lieu of an agreed two-hour reduction in the work week to 36 hours.
"This is a good result that is in line with our triple goals - more money, more job security and more quality of life," Verdi`s chief negotiator Frank Sauerland said in a statement.
German wage negotiators have agreed on more flexible working hours in landmark deals this year, reflecting a pragmatic approach to bargaining that has helped preserve industrial jobs in Europe`s largest economy.
Some 27.5 percent of the workforce are employed in industry, only slightly down over the last decade, while industrial employment has fallen to 20.5 percent of the workforce in France, 18.4 percent in Britain and 17.2 percent in the United States, World Bank data shows.
"We have achieved a good result on the pay increase, job protection and the length of the agreement," said Simone Thiaener, Deutsche Telekom`s head of personnel. "At the same time we have offered our staff new ways to balance out their work and private lives."
The deal is still subject to approval by both sides.
More than 45,000 child care, transit and other public sector workers meanwhile staged a third day of nationwide strikes on Thursday, as Verdi continued to press for a 6 percent pay rise for the sector`s 2.3 million workers.
"We expect a breakthrough in the third round of negotiations," said Verdi leader Frank Bsirske, referring to the next round of talks to begin on Sunday. He said surging tax revenues meant public sector workers should get better rises than in past years.
The federal government and municipalities have rejected the demand as too high, but the head of the VKA association of local employer organisations told a German newspaper that he expected an agreement to emerge from the next round of talks.
"We are negotiating with the unions in good faith and expect that we will reach an agreement in the coming round of talks," VKA managing director Klaus-Dieter Klappoth told the Neue Osnabruecker Zeitung newspaper in an interview to be published on Friday.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)