Royal Mail and CWU reach agreement following dispute

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Royal Mail and the CWU have reached an agreement acceptable to both parties. The proposed agreement has been approved by the Royal Mail Board and following consideration by the executive of the union they will recommend that CWU members vote in favour of it in an upcoming ballot.

This should put to bed any threats of postal strikes for the foreseeable future and with a bit of luck retailers can now put their faith in a postal service that works for the country, the workers and the company. The CWU will be travelling the company speaking to local reps to explain why they think the deal should be recommended to their members and suggesting that they vote in favour of accepting the proposals.

“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.”
– Moya Greene, Chief Executive Officer, Royal Mail plc

Royal Mail’s proposed agreement with the CWU

Pensions

  • The Royal Mail Pension Plan (RMPP) will close to future accrual in its current form on 31 March 2018.
  • Royal Mail and the CWU have committed to work towards the introduction of a Collective Defined Contribution (CDC) scheme for all employees. This will be subject to necessary legislative changes being enacted. A Defined Benefit Cash Balance Scheme (DBCBS) will sit alongside it.
  • Transitional pension arrangements will be put in place from 1 April 2018 until a CDC scheme can be established. These comprise a DBCBS and an improved Defined Contribution scheme.
  • The ongoing annual cash cost of pensions will continue to be around £400 million.

Pay and shorter working week

  • From October 2017, employees will receive a 5% increase in pay (including base pay, overtime and allowances). This rate of pay will also apply throughout 2018-19.
  • 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, employees will receive a 2% increase in pay (including base pay, overtime and allowances) and a further one hour reduction to the working week from October 2019, subject to successful implementation of those initiatives.
  • Eligible part-time employees will, in addition, receive increases in their hourly rate of pay equivalent to c.2.6% in October 2018 and October 2019 to reflect the impact of the shorter working week.
  • Commitment to move towards 35 hour working week by 2022.

Culture and operational changes

  • As part of Royal Mail’s strategy of ensuring a contemporary USO, the last letter delivery time will move back by 30 minutes to 3.30pm in urban areas and 4.30pm in rural areas.
  • Agreement on operational changes to enable later collections, processing and delivery of parcels, use of technology to enable further efficiency improvements and a pipeline review.
  • Review of the Agenda for Growth starting in 2019. The legally-binding undertakings on industrial stability and protections under the Agenda for Growth are ongoing and remain until 2020.

Trading update

Royal Mail also added the following trading update:

“Our continuing good trading performance means that we now expect to deliver adjusted Group operating profit before transformation costs4 for 2017-18 of at least £680 million.”
– Royal Mail

20 Responses

  1. Re:part time workers ( permanent 27.5 hours weekly) does the c 2.5% increase in pay mean they don’t take advantage of the 5% increase in pay for full time workers? If this is so, I personally feel it is unfair? Part time workers are doing exactly the same job as full timers, only on shorter contracted hours. As it reads on Google currently, this is presents as slightly ambiguous. Can someone kindly clarify this please?

  2. Why the increase only from october 2017 surely it should be from april 2017 as april is when it is always agreed from. Then it seems there no rise april 2018 Am i reading that right ?. Then 2% from april 2019.

  3. I agree with Michael that part -time workers appear to be treated differently – which must be wrong as this wouldn’t be allowed under existing employment law?

  4. having a 5% increase for 6 months is equivalent to 2.5% over a year. 2018-19 will effectively be another 2.5% increase albeit based on 2017 wages.

  5. The union must be deluded if they think this is what delivery staff want.later finishes was the main problem and that’s what we’ve got. Oh yes and great my pension has been sacrificed to line shareholders pockets.

  6. Michael, the pay offer isn’t great, i don’t think anyone was expecting too much regarding that, the big issue for most is the pension and what i have read it’s not exactly clear as to what if anything has been agreed. This deal is substantially better than the initial offer though.

  7. the original offer was a rouse to make you believe anything better is a great deal,come on get with it people vote against this deal

  8. I cant see Cwu had done anything. RoyalMail was happy to pay lumsump and 1 hr shorter working week and 2% pay rise backdated frm April aggreing their pension. What Cwu cooked new with pension we dnt av any clue yet. We getting 5% rise only for 6 months. If u do overall calculation £575 with 2% rise and 1 hr less a week the deal was better with RoyalMail. 5 % psy rise wnt even give u that lumpsum.. somewhere i believe the deal is not good for us as a worker. We still loosing on pension not gaining anything. Why shud we get only 6 month backdated. Lets ask our union whats the best deal u made.

  9. Royal Mail have moved substantially from the original offer, originally just a lump sum would not have given you any back pay on allowances and overtime. Still not overly convinced about the pension offer that has still to be sorted out, The bottom line is if we reject this offer we will end up having industrial action and will not get any more out of Royal Mail.

  10. This agreement discriminates against part time workers. Why is it that only the full time workers are entitled to the back dated pay increases? It should also be extended to the part time workers. Why should part time workers be treated different to permanent workers?

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