Gozo Channel and the Union Haddiema Maghqudin have reached a deal on a new collective agreement following a meeting this afternoon. Industrial action has been suspended

Union president Jesmond Bonello said that a solution that worked for both sides had been found.

"It is a win-win solution for all."

Mr Bonello thanked Finance Minister Tonio Fenech for his direct intervention in discussions today.

He said the union and the company will now work out a formula to tackle the arrears due and the proposals will then be presented to workers. He also thanked all those who supported the union's actions, including the General Workers' Union.

The union presented new proposals late yesterday and had a meeting with  Finance Minister Tonio Fenech this morning, when agreement was reached in principle.

The UHM earlier this week ordered a go-slow at Gozo Channel, protesting that the ferry company’s pay proposals for a new collective agreement were unrealistic. The last collective agreement expired in 2008.

Today, all ferries were operating with the company providing a shuttle service.

The union refused to attend a conciliation meeting yesterday, but contacts with the company were made on the telephone. The union also committed itself to keep the ferry service operating today as a gesture of good will to the Gozitan economy on Carnival weekend.

Sources close to the Finance Ministry this morning said that government acknowledged the fact that the UHM had not stopped the ferry service, and that it had presented a new proposal which was the basis for further discussion.

Gozitan business associations had warned that interruption of the ferry service would be a blow to the island's economy, with the Carnival weekend being one of the busiest of the year.  Many people, however, appeared to be confident of a solution, with hotels in Gozo being fully booked this weekend.