The supermarket own-label cakes and desserts supplier is offering staff 2%, backdated to April.
The Bakers, Food and Allied Workers Union (BFAWU) regional officer Roy Streeter said: “We will be recommending this to our members.”
Workers usually receive an annual pay offer in the last week of March from Park Cake, but none had been made this year, leading to strike action being threatened.
Park Cake's Oldham Park Cake site has a total of 1,100 employees, 700 of whom are BFAWU members in different bargaining groups, and the rest are agency staff.
The company, which has a second site in Bolton, makes slab cake, mini bites, sponge rolls, whole cake, and hot desserts for supermarkets. It had sales of £109M in the year to March 2011, according to holding company the private equity group Vision Capital.
Vision Capital also owns Fletchers Bakeries and Pork Farms, both also former Northern Foods businesses.