Serco NorthLink is to hike wages for low-paid workers on its Northern Islands freight ferries in Scotland.
Scottish transport minister Humza Yousaf has said a new deal will enter into force next month which will raise pay from rates as low as £4.50 ($5.47) an hour to at least the UK minimum wage, the Shetland Times reported.
This is up to £7.20 if aged 25 and over.
Transport union RMT welcomed the move as a first step, but said it still wanted to see rates reach those on passenger vessels.
The service was previously outsourced by Serco to Clipper Group's Seatruck, which chartered two vessels from state-owned Caledonian Maritime Assets.
Serco NorthLink will now operate the route itself.
