The Ucatt, Unite and GMB unions agreed a two-year settlement with a pay increase of 2.5 per cent from 25 July and a further 2.75 per cent in June 2017.

Sick pay and subsistence allowance will increase at least in line with these rises. Travel allowances will be paid in miles rather than kilometres.

Workers will also receive an extra day’s holiday from 1 January 2017, which the unions said was equivalent to an additional 0.4 per cent, with more flexible arrangements for taking holidays.

Some skilled operative rates including slinger/signaller, banksman, and fork lift truck and telehandler drivers will receive additional pay increases.

Despite the settlement, the unions said they had told employers the agreement was “not fit for purpose”.

Their concerns included pay rates, lack of recognition of the London living wage, and the absence of a mechanism to apply the agreement to company supply chains.

Ucatt acting general secretary Brian Rye said: “This deal ensures that workers will enjoy above-inflation increase for the next two years.

“However, employers need to understand that the CIJC agreement does not meet the needs of the workforce and unless it is radically reformed it will soon cease to be relevant to the industry.”

Unite’s national officer for construction John Allott said: “The employers need to recognise that the deal is not an end in itself, but the beginning of the journey to address many of the problems that currently face our members in construction.”

GMB national officer for construction Phil Whitehurst said the CIJC was “still by no means the agreement of choice by the whole construction industry being well behind the terms and conditions of other construction agreements”, such as the National Joint Council for the Engineering Construction Industry and the electrical contracting industry’s Joint Industry Board.

Ucatt is expected to merge with Unite after its members last month voted in favour of the move, which would mark the end of Ucatt as an independent union.