Pay and working practices deal ends postal strike threat

The threat of the first national postal strike in a decade was lifted yesterday after agreement was reached between Royal Mail and the Communications Workers’ Union over the 2006 pay rise.

The union accepted the 2.9 per cent rise imposed by the management in May with additional cash and pledges about job security and pension rights.

In return, it lifted the threat of a strike ballot and made concessions on working practices that will help Royal Mail to compete in the increasingly tough postal services market.

However, there is still no agreement on the scheme to hand 20 per cent of Royal Mail shares to staff through an employee trust. Allan Leighton, group chairman, sees giving the staff a stake in the business as essential to win their support for restructuring and modernisation that will involve changes in working practices and the loss of jobs.

The union regards the share scheme – which ministers are expected to rule on later this year – as tantamount to privatisation. It said it would campaign for other ways to give workers incentives.

The agreement simply notes that Royal Mail and the CWU understand that the investment from the government – which Mr Leighton says should in-clude the share hand-out – is vital if pensions and job security are to be preserved.

Yesterday, both sides were celebrating the 10-point deal as offering a new era of co-operation in the face of stiffening competition since the postal market was fully liberalised on January 1.

The union said it had won new money for basic salaries and the promise of more from efficiency savings that could result in four pay rises this year. It had received pledges of no compulsory redundancies, no enforced moves to part-time work and no change in the retirement age or staff pension contributions. Billy Hayes, general secretary, said the “unprecedented agreement” would be recommended to members.

Royal Mail described the agreement as “great news” that would allow modernisation to go ahead. It would be able to deliver more unaddressed advertising mail where rivals had made big gains and its market share was only 20 per cent.

It welcomed the promise of co-operation in trials to improve efficiency and develop new products. “The only way to move forward is testing on the ground with our people and the union, to find out what works for us.”

Adam Crozier, chief executive, said: “Our people will see increased earnings and our customers will see greater capacity where they need it. We’re getting on with tackling the competition, not each other.