One day after more than three quarters of its employees went on strike, CEZ Bulgaria caved in to their wage demands, agreeing to hike salaries by an average of 25 per cent, Bulgarian news agency BTA reported on April 11.

The strike committee and company management signed the deal to end the strike and a new collective labour agreement, BTA said, quoting strike committee member Evgeni Dushkov.

CEZ Bulgaria, the local subsidiary of Czech power conglomerate CEZ, agreed to increase the wages retro-actively to January 1 2008, with higher raises for its employees that are earning less than the company average. CEZ will also pay out monthly six per cent bonuses and pay each employee 40 leva a month in food stamps.

The wage hikes would cost CEZ a total 39.1 million leva, BTA quoted Dushkov as saying. All increases will be paid at the same time with wages for April.

In return for the wage hikes, the labour unions had to agree to the company's plans to make 400 employees redundant next month, who will receive between four and 14 gross salaries as severance payment.

CEZ employs 4600 people at its three power distribution subsidiaries, according to information posted on its website, servicing the western part of the country and capital Sofia.

The labour unions' success in negotiating the wage increases with CEZ management will hearten the employees of E.ON Bulgaria, the company that owns the power distribution companies in northern Bulgaria, who are considering pressing similar demands, labour union representative Miroslav Mitovski said, as quoted by BTA.