The deal is worth 18.3% to the firm’s lowest paid workers, who will receive an immediate 6.3% pay rise backdated to January, and 13.4% to all other staff, who will receive an immediate 4.5% pay rise, also backdated to January.

Then, from January 2023, there will be a further 8.6% pay hike, rising to 11.3% for Red Funnel’s lowest paid workers.

More than 140 members of the Unite union at the operator, which runs ferries between Southampton and Cowes on the Isle of Wight, will benefit from the deal, said Unite.

It also includes improvements to paid leave, sick pay, food allowance and health benefits.

Red Funnel has been operating a revised summer timetable due to industrial action.

Unite general secretary Sharon Graham said: “Our members at Red Funnel stood together to fight for better wages and won."

Red Funnel chief executive Fran Collins said she was pleased with the outcome, and forRed Funnel to restore normal service. "Our focus throughout this period has been to secure a sustainable future for the business. It is also important we have been able to recognise and reward all our colleagues during these unstable times.

“Now a resolution has been finalised, we are committed to working with all our colleagues to focus on rebuilding our teams and moving forward together. We remain fully committed to doing all we can to ensure maximum travel choice and connectivity for island residents, visitors and businesses, promoting the long-term success of the island economy.”