The Unite union called off a planned 48-hour strike at Leeds-based bus and coach manufacturer, Optare, after bosses made concessions in a new agreement.
Workers were set to strike on Thursday of last week against management’s attempts to force them to take their leave in the middle of August.
Under the new deal, bosses will only be able to dictate when workers take one week of holidays, rather than two.
Workers will also receive a £100 payment and an extra day’s annual holiday entitlement.
Many workers have joined the union, following strikes in May and June.