International Distributions Services PLC (LSE:IDS), the owner of Royal Mail has given further details on the agreement reached with the Communication Workers Union (CWU) to settle the often acrimonius 11-month dispute.
The three-year pay deal includes a 10% salary increase and a one-off lump sum of £500 for CWU grade employees in Royal Mail and Parcelforce.
The offer is broken down into a previous 2% consolidated pay rise that applied from April 1 2022, 6% from April 1 this year, and 2% from April 1 2024. In addition, agreement has been reached on a profit share scheme over the life of the agreement.
The deal has been ratified by the CWU's Postal Executive Committee and will be put to a ballot of the union's membership with a recommendation to approve. The ballot is expected in the coming weeks.
In a statement, IDS said 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,” it claimed.
“A three year pay deal will provide certainty for our employees and ensure Royal Mail remains the industry leader on pay, terms and conditions,” it added.
Key initiatives in the agreement include later start times to help Royal Mail respond to the market demand for more next day parcels, seasonal working patterns with more hours to be worked in the peak Christmas season, optimised single parcel network for larger parcels, more efficient indoor mail preparation and Sunday working.
The agreement includes a commitment to no compulsory redundancies oveer the timeframe of the deal.