Royal Mail strikes pay deal with union

Royal Mail and the postal workers’ union have reached an agreement on pay and changes to working practices, a major breakthrough in an acrimonious battle that has lasted almost a year.

Royal Mail’s pay offer includes a 10 per cent salary increase over three years and a one-off lump sum of £500. Staff will also receive 20 per cent of Royal Mail’s operating profits over the next two years, if the lossmaking group is able to reverse its fortunes.

The Communication Workers’ Union has accepted changes to delivery start times and Sunday working, which Royal Mail hopes will enable the group to meet growing demand for online shopping deliveries.

The details of the agreement, which were first reported by the Financial Times, came after the CWU and the postal service announced last week that they had reached a deal.

The proposal will be voted on by the roughly 115,000 CWU postal workers who only two months ago voted for up to six more months of industrial action.

If accepted by workers, the agreement will conclude a 10-month dispute between Royal Mail and the union, which has deepened a financial crisis at the former state-owned group and contributed to the UK’s worst industrial unrest in decades.

The fallout has centred on changes that Royal Mail wants to make to working practices, as the 507-year-old group faces competition from nimbler rivals who have grown rapidly while employing delivery drivers on less favourable terms.

Postal workers walked out for 18 days last year, including several over the key Christmas shopping period, in a move that Royal Mail said cost its business £200mn. After retailers rushed to secure Christmas deliveries and took their business to other delivery groups, Royal Mail’s management warned staff that they were “fighting for the life” of the company.

Royal Mail said on Friday that the agreement represented an “important step forward in the turnaround of Royal Mail” and would help stabilise the business. It added that the agreed changes would “improve competitiveness” and its service to customers.

The CWU said that members “deserve more on pay than this settlement provides”, adding postal workers were “trusted, respected people in the community who deserve more than real-terms pay cuts when employers and shareholders rake it in off their backs”.

But the union said it welcomed the deal “as a recognition of the fact that workers create all of Royal Mail’s wealth”.

The 10 per cent pay offer is broken down into a 2 per cent pay rise that applied from April 1 2022, a 6 per cent increase from April 1 this year, and a 2 per cent increase from April 1 next year. UK inflation stood at 10.1 per cent in March.

The industrial unrest that has gripped the UK in recent months continues, with workers across the country, including members of health and teaching unions, laying plans for industrial action that could stretch until Christmas.