A looming strike at one of Victoria's major milk companies has been averted after the processor struck a pay deal with the union.
Fonterra Australia on Friday confirmed it had reached an in-principle agreement with with the United Workers Union which represents 300 of the company's dairy workers.
Dairy employees at its Cobden, Stanhope and Darnum sites were slated to go on strike for six days from Saturday calling for fair wages and improved working conditions amid rising living costs.
Fonterra workers will now have an opportunity to vote on whether to accept the company's revised offer which includes a 12 per cent pay rise over three years, up from 10.5 per cent.
The deal also allows workers to access more leave options including increased sick leave, shift allowances and greater protections for those returning to work.
The development follows a 48-hour strike of more than 1400 workers across four major dairy companies last week to demand better pay and conditions.
Union national secretary Tim Kennedy paid tribute to workers in regional areas who showed "great courage" in standing up to the large multinational dairy companies.
"The strike action has shown dairy workers are prepared to stand up and fight for their place in the dairy industry, and the importance of the dairy industry in their local communities," he said.
Fonterra's Supply Chain and Operations Director Rob Howell welcomed the breakthrough in negotiations following several months of protracted talks.
"This offer is largely in line with what was previously on the table, following months of negotiations with the union," Mr Howell said.
"We reiterate that an agreement could have been reached without the union taking industrial action, which unfortunately reduced the pay packets of striking union members."
The breakthrough comes after almost 900 dairy workers at milk processor Saputo won improvements to pay and conditions on Tuesday.
Staff across eight sites secured increased pay offers ranging between 11 and 12.5 per cent and better conditions including paid emergency service leave.
"They were fighting not just for themselves, but for secure jobs in regional communities where every dollar they spend goes back into those communities," Mr Kennedy said.
Australian Associated Press