The pay dispute at a New Holland tractor plant in Essex has been settled after the workforce accepted an improved offer.
The 460-strong workforce was due to start a 36-hour strike on Thursday (22 October).
But the Unite workers union said the strike action was cancelled after workers accepted a new pay offer.
Workers have agreed terms on a 2% pay rise for 2015 and a further 2% pay rise for 2016. The workforce is paid on an undisclosed hourly rate.
According to Unite, an improvement in pay when tractor production is not taking place has also been agreed.
This means workers will receive 60% of their pay for 20 days a year, instead of the current five. Any days on top of that would attract 55% pay, up from 50%.
Unite regional officer Jo Jaques said: “The dispute was settled after the union and the company reached agreement on an improved deal which meant that the offer for 2016 increased from 1.5% to 2%.
“Unite is pleased this dispute has been settled. It is a tribute to the solidarity that our members have shown during three days of previous strike action.
“We want to continue to have a constructive relationship with the management going forward.”
The New Holland site, in Cranes Farm Road, Basildon, is owned by the Italian car giant Fiat.