Royal Mail Group has reached a pay agreement with the Communication Workers Union (CWU), which covers nearly 140,000 employees.
The pay agreement includes:
- Pay increases over three years: 3% in the financial year 2013/14 backdated to April 2013, 3% in the financial year 2014/15 and 2.8% (subject to review if inflation is below 2.3% or above 3.3%) in the financial year 2015/16. The expected three-year pay deal amounts to an overall compound base pay increase of 9.1%.
- A £200 lump sum payment (pro-rata for part timers), paid in December 2013, in recognition of business progress to all employees.
- A new employee incentive scheme, to be developed, which will be introduced from April 2014.
The agreement, which was announced without details earlier in December, also reconfirms the amended proposal for the Royal Mail Pension Plan, which followed a consultation earlier this year.
Royal Mail has also agreed to make higher employer contributions to its defined contribution plan.
The agreement is subject to approval by the Royal Mail Group board.
Moya Greene, chief executive at Royal Mail Group, said: “I am delighted that we have reached an agreement in principle with the CWU.
“This will provide long-term stability and certainty for Royal Mail, our employees and our customers at this pivotal time.”
Dave Ward, deputy general secretary at CWU, added: “The agreement breaks new ground in the UK by incorporating extensive legally binding protections for employees alongside a commitment to improve industrial stability.
“The legal protections for Royal Mail employees come hard on the heels of the privatisation of the company and are unprecedented in delivering the strongest protections for employees.
“This is a good deal for the organisation and customers, as well as for employees, but investors should be clear that this agreement commits them to growth and there will be no tolerance to a race to the bottom on services and jobs.”