8 June 2010 Last updated at 07:20 ET

BT makes new two-year pay offer

By Martin Shankleman Employment correspondent, BBC News

The CWU is balloting workers over possible strike action

BT has made an improved pay offer to thousands of workers threatening to go on strike.

The telecoms company is also offering to repatriate work contracted to Indian call centres to the UK, as part of a pledge on jobs.

The BBC understands that BT has replaced a single-year offer of a 2% rise, with a two-year deal, offering 2% in the first year, followed by 3%.

Staff will also be in line for bonus payments of £250 each year.

BT has also pledged to avoid compulsory redundancies between now and the end of 2011.

Last week, the Communication Workers Union (CWU), representing 50,000 employees, decided to hold a strike ballot in protest at the original offer.

The CWU deputy general secretary Andy Kerr said at the time that 2% was "not good enough when the company is making profits of over £1 billion".

The CWU received the improved offer late last night, and the negotiating team is considering a response.

A BT spokesman said: "This offer is an attempt to break the current impasse with the CWU.

"We hope that they will consider it seriously and respond positively. Industrial action is in no-one's interests."

The union membership within BT is mainly amongst engineers, call centre staff, and retail operations.

The CWU had warned that industrial action could have a severe impact on the company's operations.