Hyundai and its unionised South Korean workforce have agreed a wage deal which will increase annual pay by 12%, Reuters reported.

The union said 58.8% of its voting members approved the agreement while 41.1% rejected it.

The union is one of the largest in the country and has over 40,000 members.

Last month, strike action was majority approved unless Hyundai accepted demands for wage increases and raising the retirement age from 60 to 64. The demand to increase the retirement age was not accepted.