VW has agreed a 4.3% pay rise for its workers to end the first strikes at its factories in 14 years.
The German car-maker is giving the rise to a total of 120,000 workers in Germany, together with a €100 one-off payment and improvements to the company pension scheme.
The deal agreed with union IG Metall – which had demanded a 6% rise – gives VW the right to demand short-term compulsory overtime from staff.
The agreement, which will last for just over two years, will also see VW workers get an annual bonus equivalent to 27.5% of their monthly wage.
IG Metall has recently negotiated similar pay rises for just under four million industrial workers across Germany.
“This was an important objective for us in order to safeguard the competitiveness of Volkswagen,” board member Karlheinz Blessing said in a statement.
“At the same time, we have made Volkswagen significantly more attractive as an employer,” he said.