Royal Mail reaches wage agreement with postal workers union

Royal Mail has reached a wage agreement with the postal workers union to end a long and bitter dispute that led to the first national strikes since its privatization a decade ago.

The company said it had reached an agreement after talks with the Communications Workers Union, which represents some 112,000 postal workers.

Royal Mail and union officials reached an agreement in principle last weekend after 11 months of negotiations in the dispute over wages, jobs and conditions.

That agreement has now been ratified by the union’s executive committee, and will go to a vote of union members with a recommendation for approval. The vote is expected in the coming weeks.

The deal includes a 10% pay increase and a single lump sum of £500 for all CWU grade employees at Royal Mail and Parcelforce, regardless of union affiliation – some 120,000 workers.

This breaks down to a previous salary increase of 2% effective April 1, 2022; a 6% pay increase from 1 April 2023 and a 2% pay increase from 1 April 2024. The £500 one-time payment is equal to 2% of salary and is prorated for on-time staff partial.

The two parties have also agreed to a profit-sharing arrangement: assuming Royal Mail makes an adjusted operating profit in any financial year up to 2024-25, one-fifth of those profits will be given as a one-time payment to employees, to be paid after the publication of the company’s accounts.

The company said: “Royal Mail is currently generating material losses. This agreement is an important step forward in the recovery of Royal Mail and, if approved by CWU members, represents a good result for customers, employees and shareholders.”

The union tweeted: “We have reached an agreement with the Royal Mail Group. They came for the postal workers, but we’re still here.”

As part of the deal, delivery start times will be pushed back from next March to help Royal Mail respond to demand for more next-day parcels. Starting this fall, there will be new seasonal work patterns, which means postal drivers will work 39 hours a week in the peak Christmas season, 35 hours a week during the summer, and 37 hours during the rest of the year.

There will also be regular Sunday work on new hire contracts. Other changes include a single parcel network optimized for larger parcels to avoid duplication in Royal Mail and Parcelforce, and indoor mail sorting time will be reduced.

The agreement includes a commitment not to forced layoffs. There will be a joint review in April 2025.

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The company’s board had threatened to put the loss-making postal service, the UK’s regulated entity that delivers to every address in the country, into a government-run form of administration if no deal was reached.

Relations between Royal Mail executives and their workforce have been strained during the months-long dispute over pay and working conditions.

The CWU accused the company’s management of “a complete lack of integrity” and said it had gone on strike after Royal Mail began to impose changes to working practices that had not been agreed to at offices across the country.

Postal workers called 18 strike dates last year, including during the run-up to Christmas.

The fight proved painful for Royal Mail chief executive Simon Thompson, who was accused of “incompetence or lack of idea” by MPs who called on regulator Ofcom to investigate whether the company had breached legal service requirements.

Thompson also had to manage a ransomware attack that halted the company’s deliveries from the UK to other countries. He refused to pay an $80m (£67m) ransom sought by hackers later linked to Russia.

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