Royal Mail wins High Court injunction to postpone strike action in pensions dispute

Royal Mail

Postal organisation Royal Mail has won an injunction from the High Court to postpone planned strike action in an ongoing dispute over pensions.

The High Court ruled yesterday (Thursday 12 October) that contractual dispute resolution procedures included in the Agenda for Growth agreement between Royal Mail and trade union Communications Workers Union (CWU) must be followed before any strike action regarding the ongoing pensions dispute is carried out. The ruling means that any industrial action undertaken before the dispute resolution procedures have been followed would be unlawful.

As a result of the injunction, Royal Mail now plans to contact the CWU to begin arrangements for external mediation. Under the Agenda for Growth plan, Royal Mail committed to offer significant protections to its employees, while the CWU pledged an industrial stability framework with defined processes and strict timetables to resolve disputes.

Royal Mail initially raised the injunction on Monday 9 October, because it believed the CWU was not following the dispute resolution process laid out in the Agenda for Growth agreement. The postal organisation requested that the CWU withdraw its notification of strike action in order to follow the Agenda for Growth procedures, however, it lodged the injunction after the trade union declined to change its stance.

Royal Mail has stated that the first step in the resolution process will involve selecting a mediator, acceptable for both itself and the trade union, from a panel agreed by both parties under the Agenda for Growth. The mediation process is expected to take until Christmas to complete.

The CWU has confirmed that the trade union’s national leadership will meet as soon as possible to discuss its next steps.

Strike action was planned after 89.1% of CWU members voted in favour of industrial action over Royal Mail’s plans to close its defined benefit (DB) pension scheme to future accrual. Nearly three-quarters (73%) of the CWU’s 111,000 Royal Mail employed members participated in the ballot.

Royal Mail has offered affected employees a choice between a DB cash balance arrangement and a defined contribution (DC) scheme, under proposals put forward in July 2017. The new DB and DC schemes would be set up as new sections of the existing pension plan, replacing the current DB arrangement that will close to future accrual from 31 March 2018.

The DB cash balance scheme would provide its members with a lump sum at retirement and would see DB scheme members’ pension pots credited with 19.6% of pensionable pay a year, including a 13.6% employer contribution and a 6% member contribution. Royal Mail would also contribute 2% for other member benefits, such as death in service and ill-health.

The DC option would also see the organisation contribute 13.6% of pensionable pay.

Both schemes would be effective from 1 April 2018.

Royal Mail has also proposed improvements to its existing DC plan from 1 April 2018. This would include increasing the organisation’s standard contribution by 1% in each tier, up to a maximum of 10%. This would apply to all current and future members of the scheme.

A spokesperson at Royal Mail said: “We will now make contact with the CWU as a matter of urgency to begin the process of external mediation. The mediation process will take close to Christmas to be completed, and may be longer. The first step is selecting a mediator acceptable to Royal Mail and the CWU from a panel that was agreed by both parties under the Agenda for Growth. We are very committed to working closely with the CWU in order to reach agreement as a matter of priority.”

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Terry Pullinger, deputy general secretary at CWU, added: “[Royal Mail hasn’t] cancelled this dispute, [it] just postponed the dispute.”

John Gordon, counsel at law firm Ashurst, said: “This ruling reminds unions that they cannot down tools before going through the required mediation process.”