Bell Canada has tentatively settled a long-running pay equity dispute with thousands of its mainly female staff for $178 million.

More than two-thirds of the settlement – $128 million – is set aside as a cash payout. The other $50 million is for pension improvements.

The deal was brokered by representatives of the phone company and the Canadian Telecommunications Employees' Association (CTEA), the union representing 96 per cent of the employees involved in the dispute.

Bell Canada pay equity claim goes back 10 years
Bell Canada pay equity claim goes back 10 years

"We are pleased that discussions with the CTEA have resulted in a fair settlement of this long-standing dispute that enables us to move forward as a stronger company," Bell Canada CEO Michael Sabia said.

The settlement must still be ratified by the union membership. In 1999, a previous pay equity settlement worth $60 million was rejected by Bell staffers.

CTEA president Brenda Knight called the deal "a major landmark." She said she was confident the deal would be ratified in voting later this month. "It provides them with substantial amounts of money in a very short time-frame, and it may end a long and costly litigation the outcome of which has been highly uncertain," she said.

For the past 10 years, Bell has been fighting with thousands of unionized workers who say they're owed raises of as much as 20 per cent going back to 1992.

The request for salary adjustments was based on a study of the work performed by telephone operators, clerical staff, sales associates, and others. Most of those employees were women. Their salaries were compared with other job functions that were dominated by men.

Bell Canada parent BCE said the settlement would result in a one-time $37 million charge to earnings after tax in the third quarter.

Bell Canada has also held pay equity talks with another union – the Communications, Energy, and Paperworkers union – which represents the other 4 per cent of Bell workers who have filed pay equity claims. Bell said it was willing to resume negotiations with the CEP.