OTTAWA -- The Canadian Auto Workers union, representing more than 5,000 workers at Canadian National Railway, late last night suspended plans for a system-wide strike on Wednesday after reaching an outline on a new contract, the Journal of Commerce Online reports.

An announcement on the union's web page last night said "the CAW reached agreement on the basic elements of a three-year deal with CN this evening. If all goes well, a tentative agreement should be ready on Tuesday."

The union won pay increases, pension improvements, long-term disability insurance and higher shift differentials, it said.

The CAW represents CN workers across North America who repair, maintain and inspect cars and locomotives, as well as customer service, intermodal and yard employees.

The union and railway negotiated over the weekend and on Monday, with the help of two federal conciliators, after the CAW set March 7 as its strike date if no agreement was reached.

CN had offered a three-year contract with wage increases of 2% each year, Abe Rosner, the CAW's national representative, said earlier. He said the CAW wanted the same increases over the three years but with an additional 7% payment up front. What workers got in the tentative agreement was 35 Canadian cents (23 U.S. cents) an hour plus 2% in the first year, retroactive to Jan. 1, 25 Canadian cents (16 U.S. cents) plus 2% in the second year and 2% in the third.

The union also received improved pension. After this year, monthly pension checks will increase by US$160 for retirees with 35 years of service. A plan to cover sickness and disability above the usual 41-week maximum is to be established. Shift differentials would be raised by 5 cents each.

CN officials were unavailable for comment. Negotiators reached the tentative agreement just before CN President and CEO Paul Tellier, and CAW President Buzz Hargrove were to meet.