Gov. Neil Abercrombie praised a tentative agreement reached between the state and the United Public Workers union that will save the state 5 percent in labor costs over two years.

"The public benefits, the budget is balanced, all core services will be delivered and collective bargaining has been respected," Abercrombie said Thursday during a press conference at the UPW headquarters in Kalihi.

The agreement includes 14 days leave without pay this fiscal year, which ends June 30; 13 days leave without pay next fiscal year; a 50-50 medical premium split, instead of the current 60 percent for the state and 40 percent for employees; and a no-layoff clause for the life of the contract, according to a bargaining committee member. Officials said the days of directed leave without pay are not furlough days, and the public will see no interruption in services.

Abercrombie said supervisors will work out the directed leave for union members, according to individual circumstances.

"UPW has an incredible variety and spectrum of work responsibilities, and so all levels will be adjusted and dealt with so that the people of this state will have all their services delivered all of the time," he said. "The public will not notice anything in the way of lack of services."

The agreement is retroactive to July 1 and ends June 30, 2013. The UPW represents about 9,000 blue-collar workers in the state, including employees in the state’s executive branch, the four counties, the state Judiciary, the Hawaii Health Systems Corp., the Department of Education and the University of Hawaii.

"We believe that this agreement is a fair and reasonable solution for contract negotiations," said Dayton Nakanelua, the UPW’s state director, at the joint press conference.

The agreement came after months of negotiations. The previous contract expired June 30, and UPW members had authorized a strike in August after negotiations faltered. Abercrombie praised the talks as setting a standard for the "kind of approach to negotiations that is based on a spirit of bargaining collectively for the benefit of all of Hawaii."

On Wednesday the union’s executive negotiating committee voted unanimously in favor of the tentative agreement. The full negotiating committee will vote on the agreement Saturday at the Disabled American Veterans Hall, and the statewide membership will vote on the contract beginning Monday at Aloha Stadium.

Bargaining committee members said they felt the members would support the agreement.

Nathan Tajon, an executive bargaining committee member and Hawaii County laborer, said the state initially wanted a 5 percent pay cut and an unidentified number of layoffs.

"We knew what we wanted to do, and we knew how we could help it (the economic crisis)," he said. "This is what we wanted from the start. I’m very confident that my members back on the Big Island are going to give us a ‘yes.’"