New deal agreed for postal workers’ pay, pensions and hours

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Postal workers’ leaders have endorsed a deal on pay, pensions and working conditions, averting the threat of strikes.

Around 110,000 members of the Communication Workers Union (CWU) will now be balloted with a recommendation to accept.

The union said the deal included a three-year pay agreement and a two-hour cut in the working week it estimated was worth 12.3% overall.

The agreement includes the introduction of a “potentially ground-breaking” new pension scheme for all Royal Mail employees, providing the UK’s first “collective defined contribution” scheme and a guaranteed lump sum.

The union had threatened strikes in the run-up to Christmas, but called off the threat after the Royal Mail took legal action.

The union said the proposed deal “removes the risk” of strike action.

“The success of our campaign has delivered a substantial pay rise, a shorter working week and a pioneering new pension scheme that will secure our members’ future employment, standard of living and retirement security.

“In the face of the tough challenges Royal Mail faces from gig-economy competitors, unfair regulation and automation, we have reached a settlement that builds a bridge from our current agreements to the future, is progressive and reflects leading-edge solutions in a challenging modern setting.

“It will also ensure that any future change is managed through a process of evolution not revolution that will protect the interests of all members.

“The CWU therefore welcomes the company’s commitments to re-establish the principles of security, maintain industrial stability and restore our mutual interest culture while protecting the future of a great public service.”

Moya Greene, Royal Mail’s chief executive, said: “This agreement marks a new chapter for Royal Mail and the CWU.

“Following the conclusion of a helpful mediation process and further talks, we have delivered the right result for Royal Mail and our stakeholders. This is an affordable and sustainable solution that enables us to continue to innovate and grow and to meet the intense competition with confidence.

“Royal Mail and the CWU will continue to work together as we build on our position as the leading delivery company in the UK. I’m pleased that, under this agreement, we will continue to offer the best terms and conditions in the delivery industry by some distance.

“Both Royal Mail and the CWU have shown that disputes can be resolved without recourse to damaging industrial action.

“Our people’s commitment to serve customers throughout this period has allowed our good trading performance to continue. This means we now expect to deliver adjusted group operating profit before transformation costs of at least £680 million for 2017-18.”

Royal Mail said the deal included a 5% increase in pay, followed by a 2% rise from April 2019.

From October 2018, there will be a one-hour reduction to the working week, currently 39 hours, subject to completion of trials and implementation plans for a range of initiatives.

From April 2019, there will be a further one-hour reduction to the working week, subject to successful implementation of those initiatives.

There is a commitment to move towards a 35-hour working week by 2022.

Royal Mail said the impact of the shorter working week for full-time employees in 2018-19 and 2019-20 is not expected to increase costs materially.

The Royal Mail Pension Plan (RMPP) will close to future accrual in its current form on March 31 2018

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