ROR application with Mysql 5.6 - transaction-isolation with Master -Slave

We are running a ROR application with Mysql 5.6 and master/slave replication. We are facing deadlock issues.

We've successfully tested changing settings from REPEATABLE-READ to READ-COMMITTED on our test servers (which are standalone; not master/slave) which has eliminated the deadlock problem:

transaction-isolation = READ-COMMITTED

When we added the same in the my.cnf file on both master and slave, not only does the replication fail but the application also fails to load.

What would be the recommended setting to accommodate this change. Is there any alternative ?