* Agreement runs for 14 months
* ArcelorMittal shares up 0.3 percent at 24 euros
* Shares in Salzgitter up 2 percent to 37.9 euros
* Shares in ThyssenKrupp up 2 percent to 24 euros
* Amsterdam index down 0.5 pct, DAX index down 0.2 pct
(Updates with share prices gains, analyst comment, reaction)
By Tom Kaeckenhoff and Matthias Inverardi
DUESSELDORF, Germany, Sept 30 (Reuters) - German steel sector employers and labour unions agreed on Thursday to a 3.6 percent pay rise from October for 85,000 workers in the sector, averting further strikes.
The IG Metall metal engineering trade union asked for a 6 percent rise and staged three days of strikes last week to back the claim. The deal, which runs for 14 months, will also see steelworkers get a 150 euro ($204) payment for September.
After a period of muted pay demands reflecting worries about jobs in Germany's sharpest post-war recession, the recovery emboldened unions to push for increases, and steelworkers are leading the charge. The steel talks were closely followed by other sectors and could serve as a model.
The main companies affected by the deal include ArcelorMittal, Salzgitter, and ThyssenKrupp.
Shares in ArcelorMital were up 0.33 percent at 24.4 euros by 1004 GMT. The Amsterdam Exchanges index was down 0.5 percent. Shares in Salzgitter and ThyssenKrupp rose 2.05 percent to 37.9 euros and 2.08 percent to 24.08 euros respectively. And the DAX index was down 0.2 percent.
The employers also agreed that contract workers would receive the same hourly wage as permanent staff. About three percent of workers in the steel sector are contract workers.
"It was difficult," said Helmut Koch, who led the talks for employers.
Unions were eager to ensure companies did not increasingly turn to contract workers during the upturn. Skilled steel workers have gross wages of about 2,600 euros per month and contract workers receive about 20 percent less.
"This is a strong signal as far as the treatment of contract workers in Germany is concerned," said Oliver Burkhard, head of IG Metall in the state of North-Rhine Westphalia. "This is the first post-crisis wage round. The crisis is history."
Nico Fickinger, managing director of the employers' association Gesamtmetall, said he feared the guarantees for contract workers could lead to job cuts for low-skilled workers.
"It'll certainly lead to job losses for the more simple jobs," he told Reuters.
The BZA temporary workers' lobby said they had doubts about whether contract workers could be treated the same as permanent staff.
During the past two years the union concentrated on job protection. It accepted a one-off payment of 350 euros for 2009 and a 2 percent pay rise for 2010.
Germany's steel industry has profited from strong industrial activity and a catch-up in the construction sector after a harsh winter, riding a wave of global recovery.
"The employers are evidently ready to grant considerable pay increases as the steel agreement shows," said Thorsten Polleit, an analyst at Barclays Capital. (Writing by Erik Kirschbaum; Editing by Sharon Lindores) ($1 = 0.7362 euro)