City Rehires 10 After Workers Agree to Forgo Pay Hike : Budget: Employees union agrees to give up 4.5% cost-of-living increase and also accept a 5% reduction in work hours.

The city has rehired 10 maintenance workers laid off last week after rank-and-file employees agreed to give up a 4.5% cost-of-living pay increase and accept a 5% reduction in work hours this year, according to city officials.

In exchange, the financially pressed city agreed to make no further layoffs this year unless it loses more than $1 million in anticipated revenue.

The employees, who were laid off Tuesday, were scheduled to go back to work Friday. Sanford M. Groves, assistant city manager, said workers did not lose pay or benefits during the four days they were off work.

Under the agreement, reached Wednesday night between the city and the Norwalk City Employees Assn., pay increases that 125 employees were to have received this year will be paid in the 1993-94 fiscal year. The city also will increase the amount it pays toward employee medical insurance by 6% in July, 1993.

Union representatives could not be reached for comment on the agreement, although they earlier called the layoffs premature and unnecessary because negotiations were still under way to save the jobs. Groves, however, said the action had to be taken because each week that the issue remained unresolved cost the city $13,000.

Reinstatement of the 10 workers still leaves Norwalk with 11 fewer employees than it had four weeks ago when it began trimming the work force to help eliminate a $6.3-million budget deficit.

The city laid off four department managers and seven other employees. The remaining 17 managers agreed to forgo a scheduled 5% pay increase and accepted a 5% reduction in work hours. The city also eliminated seven unfilled jobs.