Dairy workers have accepted an immediate 6.5% wage increase in a settlement with Fonterra.
Fonterra dairy plant workers and tanker drivers were threatening industrial action last month over a pay dispute.
The Dairy Workers' Union, representing about 4,500 Fonterra workers, was seeking an 8% pay increase, while Fonterra was offering 5% as well as a 2.5% lump sum payment.
The union's national secretary James Ritchie said the agreement, covering three years, was ratified at the end of last week.
He said in addition to the 6.5% increase in the first year the workers will receive a 1.5% lump sum. For each of the following two years the increase will be 1% above the Consumers Price Index.
James Ritchie says the union will sit down with Fonterra Milk Supply before Christmas to discuss problems that are affecting milk collection from farms.