An arbitrator has awarded TTC workers a wage increase as part of a new three-year contract.

Arbitrator Kevin Burkett says the members of the Amalgamated Transit Union Local 113 are entitled to a two per cent increase in each year of the contract, as well as some other improvements.

The TTC and ATU Local 113 failed to reach a negotiated settlement during lengthy contract talks.

Since the TTC workers are no longer permitted to strike, the issue was sent to arbitration.

The union representing the transit workers felt that both parties "were given a full and fair hearing" by the arbitrator, but said the wage increase was a compromise.

"The Burkett award represents a compromise between the interests of both the union and the TTC," said Bob Kinnear, the president of Amalgamated Transit Union Local 113.

Kinnear said that the increase is comparable to other transit settlements in Ontario, but "somewhat less" than the 3.1 per cent rate of inflation in Ontario last year.

The arbitrator issued his report on Monday, giving the workers a wage hike, while also permitting the TTC to contract out 62 per cent of its WheelTrans service.

Workers will also see improvements to benefits, including vision, hospitalization and vacation.

The settlement is retroactive to April 1, 2011.

The TTC says it will recommend similar awards to its non-unionized employees.