Peace deal reached as UK workers get 6.9% pay rise

Postal workers in the UK will receive a 6.9% pay rise after Royal Mail management reached a deal with the Communication Workers Union (CWU). The agreement brings an end to the dispute that led to a number of local and national strikes last year.

Royal Mail said they welcomed the agreement on business transformation “which paves the way for a strong and successful future for Royal Mail and its people and helps secure the Universal Service”.

Basic pay and allowances for Royal Mail postmen and women will increase by 6.9% over the three years from 1 April 2010. Over the same period the working week will be reduced by one hour to 39 hours.

In addition to these changes in basic remuneration Royal Mail will pay lump sums totalling £1,000 per full-time individual – linked to the introduction and delivery of the planned changes – to “further reward them for their part in the modernisation of the business and to reflect the scale of the transformation Royal Mail needs to implement over the coming years,” said the company.

Postal workers will also receive improved job security and maternity and paternity benefits.

As a part of the agreement, the existing limit of three items of junk mail per household per week will be abandoned.

Although wanting to preserve the upper limit on the grounds of postal workers’ bags already being too heavy, the CWU accepted the removal of the cap to seal the pay rise deal.

The Agreement – Business Transformation 2010 and Beyond – means Royal Mail Letters can continue with its £2bn modernisation, including the introduction of new automated machinery and delivery equipment.

“The three-year Agreement has the strong and unanimous backing of Royal Mail, the CWU leadership and Roger Poole. The union plans to ballot its members on the Agreement during the next few weeks,” said a Royal Mail statement.

Adam Crozier, Royal Mail group chief executive, said: “This agreement is good for the business as it allows Royal Mail to get on with its modernisation, it’s a good and fair deal for our people, and it’s a good deal for our customers as it ensures stability over the next three years. It is a real credit to all those involved – both in the company and the union – and I’m grateful for all their hard work. I’m also grateful to Roger Poole for his help and support over the last few months.”

Mark Higson, managing director of Royal Mail Letters, said: “This three-year agreement is an important achievement for the Letters business and its people and one which breaks new ground in our relationship with the CWU. I’d like to thank the teams in Royal Mail and the union who made it happen, as well as Roger Poole for his input and support.”

“The Agreement is crucially important in allowing Royal Mail to compete successfully in the highly competitive communications market and to help counter the effect of the ongoing decline in traditional mail volumes. It enables the business to rapidly complete the introduction of the latest generation sorting technology and new delivery methods to improve efficiency. It also enables us to protect as many full time jobs as possible while at the same time giving our people the best possible tools for the job.”

Dave Ward, CWU deputy general secretary, said: “It’s been a long time coming, but this deal delivers on the major issues which postal workers have fought for. There’s a balance of pay and operational changes which will help offset job losses and ensure our members are fairly rewarded for change.

“We have always said that we couldn’t face away from change. The agreement recognises the reality of automation, competition and the financial challenges facing the company, but it does so in a way that puts the interests of CWU members at its heart.

“Both sides have committed to improving industrial relations and ensuring a more positive working relationship in the best interests of everyone at Royal Mail.

“We’d like to thank Roger Poole, ACAS and Brendan Barber for their efforts over the past months which have helped to secure this successful outcome.

“There has been a lot of talk about the future of the company in relation to competition and the pension deficit. Now that we have reached this agreement it is clear that business transformation can be delivered. As a result we’re determined to address the pensions issue and establish whether the government will now finally accept its responsibilities, as the owner of the company, to find an acceptable solution.”

The agreement is over 80 pages long and covers lots of industrial detail for different areas of Royal Mail. The key areas are:

Pay: increases to basic pay of over 6.9% over three years broken down as:

– 2% in April 2010

– 1.4% in April 2011

– 3.5% in April 2012

Pay: lump sums likely to exceed £2,500 paid as:

– £400 for each full time employee (and pro-rata) on ratification of the agreement

– £1,000 per full time employee (and pro-rata) linked to delivery of planned changes in each workplace.

– Payments of bonus payments at their value in 2011 and 2012 – these should increase in value as transformation improves the position of the business.

Pay: opportunities to turn allowances (and in delivery door-to-door payments) into regular additions to basic pay starting with an immediate payment of £20.60 per week for delivery staff (equivalent to 5.9% pay increase) and £8 per week for mail centre staff (equivalent to 2.3%).

Shorter working week: reduced by one hour to 39 hours gross, 35 hours 40minutes net for the vast majority of postal workers

Job security: agreement to maintain at least 75% of workers as full-time with no forced move for any worker from full time to part time or vice versa

Job security: improved terms are available for people moving to alternative offices as a result of the changes and a commitment to continue making changes through voluntary means.

Maternity/Paternity: Improved maternity pay from 18 to 26 weeks and paternity pay from one to two weeks.

Saturday: as a normal working day for deliveries, but with opportunity for people to have more Saturdays off if they want them. A joint innovative approach to duty patterns to meet business needs and employee aspirations.