Royal Mail PLC (LON:RMG) shares headed higher on Thursday as the threat of workers walking out over the key Christmas period subsided, following an apparent breakthrough in discussions with union bosses.
The postal operator has released a report of recommendations made by Lynette Harris, who was called in to mediate talks between the company and the Communications Workers Union (CWU).
It said the mediation process helped both sides to “better understand their respective positions”, adding that, although the recommendations aren’t legally binding, they have been useful in framing further talks.
Progress in talks
Royal Mail claimed agreement on some issues is more advanced than others but “all issues remain open for negotiation and final agreement”.
In its own statement the CWU said it was clear it had “successfully shifted the employer’s position and secured the basis for a far better agreement”.
Royal Mail and CWU have been at loggerheads for a few months now after workers voted overwhelmingly in favour of industrial action back in October amid a dispute over pensions, pay and jobs.
The strike was due to be held shortly after the work but the postal group was granted an injunction after it took the case to the High Court and argued that the 48-hour walkout would be “unlawful”.
Both sides subsequently moved into dispute resolution talks, which mediators were called in to facilitate.
Harris’ report called for the introduction of a collective defined contribution pension scheme with a defined benefit element for all Royal Mail workers.
The CWU said this would provide employees with a “wage in retirement scheme” – slightly different to earlier proposals from Royal Mail which offered a choice between either a new defined benefit scheme or a defined contribution scheme.
Ongoing talks
Talks are still ongoing over pay but Harris suggested a 2.6% pay rise backdated to April this year, followed by another 2% increase to base pay in 2018.
Royal Mail staff currently work 39 hour weeks, but the report proposed that be cut to 38 hours during 2018-19.
Talks are continuing over the next couple of weeks. Despite the progress, the CWU cautioned that if discussions “dry up” or Royal Mail move the goalposts, it would “not hesitate in giving notice to take industrial action”.
Shares jumped 0.9% to 425p on Thursday morning.