Royal Mail has agreed to a pay deal with the postal workers’ union to end a long-running and bitter dispute that led to the first national strikes since its privatisation a decade ago.
The company and the Communication Workers Union, which represents about 115,000 postal workers, said they had reached a deal, following 18 strike dates last year including in the run-up to Christmas. They reached an agreement in principle last weekend after 11 months of negotiations in the dispute over pay, jobs and conditions.
That deal has been ratified by the union’s executive committee, and will be put to a ballot of its membership with a recommendation to approve it. The ballot is expected in the coming weeks.
The agreement includes a 10% salary increase and a one-off lump sum of £500 for all CWU-grade employees in Royal Mail and Parcelforce, regardless of union membership. It will benefit 120,000 workers out of a total workforce of 140,000.
This is broken down into a previous 2% pay rise from 1 April 2022; a 6% pay rise from 1 April 2023 and a 2% pay rise from 1 April 2024. The one-off payment of £500 is equivalent to 2% of pay and pro-rated for part-time staff.
The two sides have also agreed on a profit-share agreement: assuming Royal Mail makes an adjusted operating profit in any financial year up to 2024-25, a fifth of those profits will be handed out as a one-off payment to employees, to be paid after publication of the company’s accounts.
The company said: “Royal Mail is currently materially lossmaking. This agreement is an important step forward in the turnaround of Royal Mail and, if approved by the CWU membership, represents a good outcome for customers, employees and shareholders.”
The CWU said the deal would cancel the “Uberisation” of Royal Mail, noting that it will abandon the introduction of owner-drivers, reduce agency workers in Royal Mail work, confirm that there will be no compulsory Sunday working, and establish an independent inquiry for suspended or sacked workers.
A union spokesperson said: “This situation has been arrived at only because of the sheer determination of every postal worker in this country who stood up for themselves, their jobs and their industry.
“We intend to put this deal to our members’ vote as soon as possible.”
We have reached an agreement with Royal Mail Group.
— The CWU (@CWUnews) April 21, 2023
They came for the postal workers but WE ARE STILL HERE.
https://t.co/Lx6D0dCKYO pic.twitter.com/kAN6XfMbsM
As part of the agreement, delivery start times will be moved back from next March to help Royal Mail respond to demand for more next-day parcels. About half of offices will see their start time moved to after 7am, and the last letter delivery time will move by an hour to 4.30pm.
From this autumn, there will be new seasonal working patterns, which means postal delivery workers will work 39 hours a week in the peak Christmas season, 35 hours a week over the summer and 37 hours over the rest of the year.
There will also be regular Sunday working in new employee contracts. Other changes include an optimised single parcel network for larger parcels to avoid duplication across Royal Mail and Parcelforce, and indoor mail sorting time will be sharply reduced.
The deal includes a commitment to no compulsory redundancies. There will be a joint review in April 2025.
The company’s board had threatened to put the lossmaking postal service – the regulated UK entity that delivers to every address in the country – into a form of government-handled administration if a deal was not agreed.
The union had accused the company’s management of “a complete lack of integrity” and said it had taken strike action after Royal Mail began forcing through changes to work practices that had not been agreed upon, at offices across the country.
The tussle has proved bruising for the Royal Mail chief executive, Simon Thompson, who was accused of “incompetence or cluelessness” by MPs who called on the regulator, Ofcom, to investigate whether the company had broken legal service requirements.
Thompson has also had to handle a ransomware attack that crippled the company’s deliveries from the UK to other countries. It refused to pay an $80m (£67m) ransom sought by hackers that were later linked to Russia.
