Royal Mail deal includes 10% pay rise and profit share scheme

The Communication Workers Union (CWU) has revealed the terms of its agreement with Royal Mail Group, which will now be put to a vote by members. 

Royal Mail and the union have been embroiled in a long-running dispute over pay, job security and terms and conditions, which resulted in 18 days of strike action in 2022. If the deal is accepted by members, the threat of further industrial action will be called off.

The terms of the CWU and Royal Mail deal include no compulsory redundancies until at least April 2025, a 10% increase on base pay over three years, a non-consolidated £500 lump sum, a new profit share scheme, changes to the company’s proposed plans for new start times, new seasonal working patterns and an improvement on Royal Mail’s proposed changes to sick pay, attendance standards and ill health retirement.

There will also be no outsourcing or franchising of work, and every existing contractual allowance will remain in place.

The profit share scheme will see the first 20% of future profit delivered in a lump sum payment to frontline workers.

Following evidence delivered to the business select committee that suggested Royal Mail planned to use technology to track workers’ performance, the company has now said it would only use individual data in a supportive manner for coaching purposes.

It will also work with the CWU to design and implement a suitable and consistent performance procedure, taking into account best practice from Acas.

In a joint statement, CWU general secretary Dave Ward and acting deputy general secretary (postal) Andy Furey said: “No agreement or negotiation ever results in one party getting everything they want and you know change is necessary and
was always going to happen – but we can confidently say we have shifted Royal Mail on every single one of their original
positions.”

A statement from Royal Mail Group 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 agreement provides a platform for the next phase of stabilising the business whilst continuing to drive efficiency and change. The operational changes in the agreement are designed to improve competitiveness, particularly in next-day parcels, reduce cost and environmental impact, and improve quality of service for our customers

“A three-year pay deal will provide certainty for our employees and ensure Royal Mail remains the industry leader on pay, terms and conditions.”

Change management opportunities on Personnel Today

Browse more Change management jobs