Restaurant workers at Harrods say they have won a 25% increase in pay, with some chefs now earning more than £12.50 an hour – averting a threatened strike during Christmas week. The United Voices of the World union (UVW), which represents waiters and chefs at the Knightsbridge department store, said the deal represented a “new benchmark for pay in the hospitality sector”, with some Harrods workers in line for £5,000 extra in annual pay. It said the deal, for some, included agreed annual pay rises of 3% from 2023. The union said early last month that it would ballot staff about a potential strike over poor pay and a heavy workload for staff after job cuts. One restaurant worker said: “After weeks of organising with our union, UVW, we are delighted that our bosses have engaged with us and recognised our hard work. We will be getting the pay rise we have fought for and that we deserve – good news for us and workers beyond.” Petros Elia, the general secretary of UVW, said: “We’re proud to set a new benchmark for the sector, a sector notorious for poverty pay and appalling conditions. This is affirmation of the power of organised and strike-ready workers – this remains the biggest and most powerful tool in workers’ arsenal today. The fight does not stop here: we are now talking with retail staff to ensure they are not left behind. We’ve been saying it’s time for £12 and now that time has arrived.” Harrods said on Tuesday that the increased pay for restaurant staff was not driven by the threat of union action but came after three months of reviews to ensure pay was in line with industry benchmarks. The retailer said in a statement: “This has been entirely driven by ongoing discussions and work internally with our restaurant colleagues, and at no point during this three-month process have we engaged with a third party. “We are consistently reviewing our pay policies to ensure we continue to attract and retain the best talent.” Harrods, which is owned by Qatar Holding, the investment arm of Qatar’s sovereign wealth fund, has said the Covid-19 pandemic was a significant challenge for the business last year. Sales fell 50% to £429.5m in the year to the end of January 2021 and the company frecorded a £68m pre-tax loss from a £232m profit a year before.