Royal Mail has agreed a pay deal with the postal workers’ union to end a long-running and bitter dispute that led to the first national strike since its privatization a decade ago.
The company and the Communications Workers Union, which represents about 115,000 postal workers, said they had reached a deal after 18 strike dates last year, including the run-up to Christmas. They reached an agreement in principle last weekend after 11 months of negotiations in a dispute over pay, jobs and conditions.
That deal has now been approved by the union’s executive committee, and will be placed on the ballot of its membership with a recommendation to approve it. The ballot is expected in the coming weeks.
The agreement includes a 10% pay rise and a one-off sum of £500 for all CWU-grade employees at Royal Mail and Parcelforce, regardless of union membership. This will benefit 120,000 employees out of a total of 140,000 employees.
This has been broken down into previous 2% increments from 1 April 2022; 6% increment from 1st April 2023 and 2% increment from 1st April 2024. The one-off payment of £500 is equal to 2% of pay and is prorated for part-time workers.
Both sides have also agreed on a profit-sharing agreement: Assuming that Royal Mail makes an adjusted operating profit in any financial year up to 2024-25, a fifth of those profits will be given to employees as a one-time payment, to be paid after the publication of the company’s accounts.
The company said: “Royal Mail is currently materially loss-making. This settlement is an important step in the transformation of Royal Mail and, if approved by the CWU membership, will deliver a good outcome for customers, employees and shareholders. represents.
The CWU said the deal would reverse the “Uberization” of Royal Mail, noting that it would abandon the introduction of owner-drivers, reduce agency staff in Royal Mail work, confirm that there would be no mandatory Sunday work. will not, and will establish an independent investigation into suspended or dismissed employees.
A spokesman for the union said: “This situation has only come about because of the determination of every postal worker in this country who has stood up for themselves, their jobs and their industry.
“We intend to put this deal to a vote of our members as soon as possible.”
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. From this autumn, new seasonal working patterns will be in place, meaning postal delivery staff will work 39 hours per week during the peak Christmas season, 35 hours a week in the summer and 37 for the rest of the year.
The new employee contracts will also include regular Sunday work. Other changes include an optimized single parcel network for large parcels to avoid duplication across Royal Mail and Parcelforce, and indoor mail sorting times will be reduced.
The deal includes a commitment not to make any mandatory redundancies. A joint review will take place in April 2025.
The company’s board threatened to put the loss-making Postal Service – the regulated UK entity that delivers to every address in the country – into a government-controlled administration if a settlement was not reached.
Relations between Royal Mail executives and its workforce have been strained during a months-long dispute over pay and working conditions.
The CWU had accused the company’s management of a “complete lack of integrity” and said the strike action was taken after Royal Mail forced changes to work practices at offices across the country.
The feud has proved painful for the Royal Mail chief executive, Simon Thompson, who was accused of “incompetence or ignorance” by MPs, who called on the regulator, Ofcom, to investigate whether the company had provided legal services. requirements have been violated or not.
Thompson has also had to deal with a ransomware attack that crippled the company’s deliveries from the UK to other countries. It refused to pay an $80m (£67m) ransom demanded by hackers who were later linked to Russia.