Fujitsu workers who are members of the Public and Commercial Services union have called off a strike after the IT company made an improved pay offer.

The union's 720 members working on contracts for DVLA, HM Revenue and Customs (HMRC), the Home Office, Ministry of Defence and Office of National Statistics, had planned to carry out a joint strike with members of Unite union on Monday 19 September. Unite members are still going ahead with the strike, which is over a dispute concerning the sacking of union representative Alan Jenney, and will involve staff at Fujitsu's Manchester and Crewe offices.

PCS members had planned to strike over a below-inflation pay offer (of between 1.5 percent and 2.5 percent) which it had branded an "insult" to Fujitsu's lowest-paid workers.

However, Fujitsu has now offered PCS members a pay deal that is more than twice the rate of inflation.

The lowest-paid staff will now receive a basic 11 percent increase, and everyone on £20,000 or less will receive more than 2.5 percent. The pay rises will be backdated to 1 August, with an additional £500 compensation paid to those whose pay date was before 1 August.

In addition, all staff earning less than the 85 percent of the median for their grade will be moved up to the median, and a structured progression system for staff will be implemented at the two sites where the majority of low-paid staff are based.

Fujitsu will also hold further discussions with PCS about pay progression and transparency of contracts in December.

Mark Serwotka, PCS general secretary, said: "This is a major deal for these private sector workers, particularly the lowest paid, who do essential work supporting our public services."While we have called off our strike, we send solidarity and support to members in Unite and call on the company to sit down with their representatives to resolve the issues."

Although PCS members will not be joining Unite on the strike on Monday, the union said it will write to Fujitsu calling on them to resolve the dispute, send a PCS delegation to Unite picket lines on the day, and carry out workplace collections for Unite's hardship fund.

Fujitsu said in a statement: "We are pleased to have reached an agreement with PCS which they will be recommending their members accept it and so they will not be going ahead with any of the industrial action they announced.

"We are disappointed the action by Unite is still scheduled to go ahead, however we are continuing our discussions and hope the dispute will be resolved."