Three hundred and fifty non-medical employees of the Cambridge and Kenmore Harvard Community Health Plan (HCHP) remained on the job yesterday after a last-minute settlement averted a threatened walkout.

Both workers and management claimed victory in a settlement which will give workers at the Harvard-affiliated centers a 2 percent cost-of-living increase and merit raises.

Workers had threatened to strike following what HCHP Director of Public Affairs Allen Raymond called "a serious impasse on the question of guaranteed raises and merit raises."

The Harvard Community Health Plan is one of the oldest health management organizations in the country, and it is the largest one in the state.

"We wanted a system of raises based entirely on merit," said Raymond, "and they wanted an across-the-board increase."

Raymond said that management was pleased with the new contract, since the principle of merit pay was being preserved.

Joseph A. Twarog of Service Employees International Union Local 285 said the 350 clerical and maintenance workers "basically got what we wanted on the major issue, which was keeping the cost of living adjustment."

Twarog, who organized the informational pickets which were to have begun yesterday at Cambridge, Kenmore, and six other locations, said that the support of other labor unions was instrumental in winning the fight for cost-of-living increases.

"We got them to call HCHP and say that if our demands weren't met, they would write them out of their health care contracts," he said, "and I think that helped a lot."

Katherine Shea, another representative of the Union, said that the aid which Local 285 received from other unions showed that "a lot of people feel very strongly about the idea of paying people for the amount of work they do, and not for how well someone else thinks they do it."

The new contract, which replaces the one that expired on October 1st, still has to be approved by the 350 members of Local 285, but officials on both sides said they were confident that it would be would be accepted.