Teachers on the Isle of Man will be paid 1% more than some counterparts in England, despite one of the largest teaching unions rejecting the deal.
The National Association of Schoolmasters Union of Women Teachers (NASUWT) formally threw out the offer last month.
About 400 of its members are currently engaged in a dispute short of striking.
However, the offer was accepted by the National Association of Head Teachers and the National Education Union.
Manx Education Minister Julie Edge said the pay rise “recognises and rewards our hardworking and dedicated teachers and lecturers”.
She said it would also make Manx schools and University College Isle of Man (UCM) even more attractive to the profession.
The NASUWT warned it would now consider escalating its industrial action, “potentially up to and including strike action”.
General Secretary Patrick Roach said the offer represented the largest single annual real terms cut to teachers’ pay in the Isle of Man since 2010.
He said once inflation was taken into account, teachers had suffered a 30% pay cut since then.
Pay for teachers on the Isle of Man is linked to England, where a pay freeze was put in place for 2021-22.
Teachers in London are paid a premium to reflect the higher cost of living, while those in areas surrounding the capital receive a “London fringe” uplift.
Manx teachers will receive 1% above this London fringe rate.
The new pay arrangements will come into force for Island staff next month, with arrears backdated to September 2021 due to be paid in August.
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