Royal Mail Agrees 9% Pay Deal With Unions

Royal Mail has bowed to union demands and agreed to a 9.1% pay rise for staff over three years but has managed to radically curb the threat of strike action at the same time.

In a deal that has taken a year of negotiations to secure, the newly privatised delivery company raised its pay offer from 8.6% over three years, in a move that will £130m this year. The deal is backdated to April 2013 and comprises a 3% pay rise this year, plus a £200 one-off bonus, rather than £300 originally offered. Staff will receive a 3% rise in 2014/15 and a further 2.8% in 2015/16 and benefit from a new employee incentive scheme to be launched next year. The company agreed to make higher employer payments to its defined contribution pension plan, although the details have not been disclosed.

Royal Mail has also agreed to a legally binding set of employment protections, including no zero hours contracts, a commitment not to outsource, sell or transfer any part of the business, and a pledge to avoid compulsory redundancies.

In return Royal Mail has curbed the right of union to call strike action. A new system of mediation will effectively rule out local strike action. Instead industrial action can only be called at a national level by the Communication Workers Union. But a strike will automatically negate the employee protection agreement too.

In a statement Royal Mail said the deal “represents a joint commitment to radically improve industrial relations and create a can-do culture.” The agreement, which does not rule out further redundancies, specifically “emphasises that efficiency is a prerequisite for growth,” the statement said.


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