Bus driver strikes planned for tomorrow in Auckland has been postponed.
First Union transport spokesperson Jared Abbott said they were planning to negotiate with NZ Bus on Friday.
He hoped a deal could be reached, but said they had made little progress with the company since it suspended drivers en masse in December.
Abbott said better pay and conditions were necessary to retain and recruit drivers in order to meet demand.
NZ Bus chief executive Barry Hinkley said: "It is obvious that we are at an impasse in negotiations, so bringing in a third-party mediator will give us the best chance to make progress.
"We are pleased that the Unions have agreed to the mediation and that they have withdrawn their strike action. Now Aucklanders can plan their morning commute with certainty.
"While mediation isn't a silver bullet in terms of reaching an agreement, it's a positive step that we hope will lead to a resolution."
The company cancelled 35 services this morning because of industrial action.