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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 said it had reached a deal after talks with the Communication Workers Union, which represents about 112,000 postal workers.
Royal Mail and union leaders reached an agreement in principle last weekend after 11 months of negotiations in the dispute over pay, jobs and conditions.
That deal has now been ratified by the union’s executive committee, and will be put to a ballot of the union’s membership with a recommendation to approve. 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 – about 120,000 workers.
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 loss making. 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 union tweeted: “We have reached an agreement with Royal Mail Group. They came for the postal workers but we are still here.”
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, there will be new seasonal working patterns, which means postal delivery workers will work 39 hours per 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 reduced.
The deal includes a commitment to no compulsory redundancies. There will be a joint review in April 2025.
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The company’s board had threatened to put the loss-making 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.
Relations between Royal Mail executives and its workforce have been strained during the months-long dispute over pay and working conditions.
The CWU 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.
Postal workers called 18 strike dates last year including during the run-up to Christmas.
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.
