The deal struck between the Heating and Ventilation Contractors’ Association and the trade union Unite is being enforced with immediate effect.
Hourly rates and allowances have been held at their previous rate set in October 2008.
But these will increase by 2 per cent in October 2010, when employers will also become liable under the agreement to pay a pension contribution.
The pension contribution of 1 per cent of basic earnings above the primary earnings threshold comes in ahead of Government plans for compulsory second pensions.
HVCA bosses said the provision anticipates by two years the compulsory enrolment of employees into a pension scheme that meets the criteria laid down in the Pensions Act 2008, which comes into force in October 2012.
Details of the pension arrangements – and the method of its communication to employers and employees – will be developed over the coming months by a working party established jointly by HVCA and Unite.
HVCA’s head of employment affairs Peter Rimmer said: “This agreement acknowledges the considerably more difficult circumstances – in terms of workload, profit margins and payment security – under which building services engineering is currently operating compared with 12 or 18 months ago.
“Given that it is unlikely that prospects for the sector will improve significantly during 2010, it is crucial that employers run as a tight a ship as possible.
“The agreement concluded with Unite will ensure that labour costs are kept in check – to the long-term benefit of all.”