ALL 2,500 shopfloor workers at JCB will receive a pay rise this year as the digger giant announced it is also taking on up to 200 more staff.

GMB union members voted to accept a three per cent pay rise from July 1 this year.

That will be followed by pay reviews in January 2011, 2012 and 2013, which will be linked to inflation rates in the previous November.

As well as taking on workers, overtime is being re-introduced as the recession-hit manufacturer sees the first signs of economic recovery.

Alan Blake, JCB's chief executive officer, said: "We are pleased to return to the position of being able to offer pay rises to workers after a sustained period of uncertainty in world markets and are delighted GMB members have voted in favour of the JCB pay proposal.

"This is the longest pay deal ever to be agreed at JCB and demonstrates a responsible approach by everyone concerned."

The last time shopfloor workers at JCB were awarded a pay rise was in January 2008 as the recession began to take hold.

Since then, the firm has made about 1,800 job cuts in response to falling sales, as large-scale building projects ground to a halt and potential customers were unable to access credit.

Now some of those former employees will be taken back on as demand picks up, but directors at JCB warned the future is still uncertain.

Mr Blake said: "There has been a slight improvement in some markets which has led to some increased demand for JCB's products, and while we can't say at the moment if this situation will be sustained, we are pleased to be offering overtime and recruiting again."

The "vast majority" of the new jobs will be in Staffordshire, with most of those being at the company's World Headquarters in Rocester.

Other divisions to benefit will be heavy products in Uttoxeter, compact products in Cheadle, cab systems in Rugeley and power systems in Derby.

GMB works convener Gordon Richardson said: "GMB members across the JCB group have been through a torrid time over the past two years and it's welcome news the union has negotiated a pay rise.

"It is also pleasant to see former employees back working for the company as part of an on-going recruitment process."

Retired JCB worker Tony Moult, of Alton, said: "It is good news. I am still in touch with former colleagues and I would think they would be pleased.

"I understand they have more work coming in and it would seem to be a sign of recovery. There must be confidence in the future markets and that things will pick up."