News and press releases

  • Royal Mail Group
    1 July 2013
    Royal Mail proposes to CWU a new three year agreement for frontline staff

Royal Mail has proposed to the Communication Workers Union (CWU) a new three-year agreement (set out in detail below) to deliver its agenda for growth and industrial stability.

It includes:

  1. a three-year pay deal.
  2. confirmation that contracts of employment and terms and conditions for existing employees and employees hired into the core network will remain on the same basis at least for the three-year period of this settlement, unless varied by mutual consent.
  3. keeping the Royal Mail Pension Plan open for existing members, subject to certain conditions.
  4. a new model for CWU and Royal Mail to work together.
  • The proposed agreement applies to around 125,000 Royal Mail employees (see Notes to Editors). It would run for three years, building on previous agreements including the Business Transformation Agreement 2010 and Beyond (BT2010), the non-payment elements of which are ongoing. Industrial stability mechanisms will be developed as part of the agreement.
  • The proposed agreement includes an increase in base pay of 8.6 per cent over three years. A non-consolidated lump sum payment of £300 (pro-rata for part-time employees) in December 2013 is also proposed. As previously agreed, incentive schemes will be developed aligned to the improving competitive position of the business with a minimum payment of £100 per annum 
  • In addition to and separate from the proposed agreement, the Postal Services Act 2011 stated that a minimum of 10 per cent of shares in the business will be set aside for employees on or ahead of the Government's shareholding in Royal Mail falling to zero. The timing, form and other details of the scheme are a matter for Government
  • There will be further discussions this week with the CWU about the proposed agreement.
  • Unless we get a collective agreement with the CWU, the pay increases set out in the proposal would not be introduced. The terms and conditions in the proposed agreement would not be affected by any change in ownership of the Company. The agreement would record this in advance of a potential sale of the Company.

 

The proposed new agreement is about delivering our agenda for growth and industrial stability. We will develop industrial stability mechanisms as part of this agreement. The proposed agreement commits the Company, the CWU and our people to a positive culture of mutual interest. Royal Mail needs to continue to adapt at pace, to ensure we explore and find better and faster ways to embrace technological, equipment and process change to remain competitive. As part of this we would jointly commit to continuously improving efficiency to ensure a truly customer responsive service.

Moya Greene, Chief Executive Officer, Royal Mail Group, said: “Cooperation is central to the future success of the company. This offer represents Royal Mail’s commitment to a long-term engagement strategy with the CWU and with our people.

“We have already built a stronger Royal Mail together through closer cooperation and trust in recent years. We are now offering a new long-term agreement with the CWU and our employees.

“This is a good deal – good for Royal Mail and good for our people. We are asking the CWU and our people to accept this new agreement. There will be further discussions this week with the CWU about the proposed agreement.”

ENDS

For more information contact Shane O’Riordain on 0207 449 8105,

Mish Tullar on 07423 524154 or Candice Macdonald on 07436 267324

Notes to Editors

  • The proposed agreement will apply to employees in CWU represented grades in Core Operations, Logistics, Engineers, Fleet Maintenance Services, RMSS and Royal Mail International at least for the three year period of the settlement.
  • Royal Mail has already reached agreement with the Unite union, which represents management grades within Royal Mail. In April, we agreed a 2.4 per cent pensionable pay increase for members backdated to July 2012.
  • Parcelforce Worldwide negotiates independently with the CWU on pay. Negotiations are progressing well.
  • BT2010 and Beyond was signed in March 2010 with strong and unanimous backing from both Royal Mail and CWU leadership. It enabled the continuation of Royal Mail’s modernisation programme, including the introduction of new automated machinery and changes in the way our people work.
  • Royal Mail Group and Post Office Limited became separate, sister companies on 1 April 2012. This agreement does not apply to Post Office Limited employees.

 

Summary of Royal Mail’s proposed new agreement

OUR PROPOSED THREE-YEAR PAY DEAL

Base pay increase

*In 2013-14, in addition to a 2.6% base pay increase there would be a non-consolidated lumpsumof £300 (pro-rata for part-timer employees). It will be paid in December 2013. This is subject to a successful transaction before the end of the year. This payment will be forfeited in offices where industrial action takes place between now and the date of payment. The base pay and lump sum combined equal an average pay increase of 3.7%.

**Base pay increases in years two and three will be subject to review if inflation is below 2.3% or above 3.3%.

Backdated pay increase and arrangements

The 2.6% base pay increase for 2013-14 will be backdated to April 2013. The base pay increases over the three-year period will flow through to the usual allowances and overtime payments.

Incentive schemes

We are committed to developing incentive schemes aligned to the improved competitive position of the business. We have already agreed that a minimum payment of £100 (pro-rata for part-time employees) will be paid in December 2013 as part of the new incentive arrangements. This is paid alongside any further Christmas bonus, for those parts of Royal Mail where bonuses are paid.

Employee Share Offer

In addition to and separate from the proposed agreement, the Postal Services Act 2011 stated that a minimum of 10 per cent of shares in the business will be set aside for employees on or before the Government's shareholding in Royal Mail falls to zero. The timing, form and other details of the scheme are a matter for Government.

PROTECTIONS

  • We will confirm that contracts of employment and terms and conditions for existing employees and employees hired into the core network remain on the same basis at least for the three-year period of this settlement unless varied by mutual consent. 
  • We will continue to have a predominantly full-time workforce on an overall, national basis:75 per cent fulltime to 25 per cent parttime.
  • Royal Mail is committed to provide and enhance existing services to customers using the current workforce and there will be no change to the current structure of company in relation to these services.  No additional outsourcing of services is expected during the period of the agreement.
  • Enhanced voluntary redundancy and excess travel terms extended for the life of the modernisation revisions.
  • CWU will continue to represent front-line employees–as it does now.

PENSION

  • We have a plan to keep the Royal Mail Pension Plan (the Plan) open for existing members, subject to certain conditions. Royal Mail is consulting with Plan members on a proposal that would see no changes to members’ contribution rates, retirement age or accrual rates.
  • The Plan had approximately £2 billion of assets left at the time of the transfer to Government. Some of these could be used as part of the company’s proposal to keep the plan open at least until the conclusion of the next periodic review in five years.
  • We can do this without any member of the Plan having to pay more, work for longer or face reduced accrual rates.
  • We will keep paying around £400 million per year into the scheme. This is a significant financial commitment by Royal Mail.

PARTICIPATION

  • A new model for working together. Management and CWU representatives would broaden discussions beyond operational change to include business strategy and implementation.
  • There would be an Agenda for Growth – working with the CWU – to grasp the opportunities available to us in a timely way (e.g.parcels, and continuing) to deliver a great service. This is the way to maintain as many good - quality jobs as possible at Royal Mail.