Royal Mail averts Christmas strike with "legally-binding" deal

Royal Mail Group said on Monday it had secured a "ground-breaking" new agreement in principle to prevent its workforce walking out over the busy festive period.

The agreement, believed to be the first of its kind in the UK, includes legally-binding terms covering industrial stability and employee protections.

Through discussions with the Communications Workers Union (CWU), Royal Mail has reached the agreement which will cover approximately 139,000 employees in the group.

It builds on the "Business Transformation 2010" agreement which already existed between Royal Mail and the CWU, but is the first time the two parties have entered into a deal with "legally-binding" provisions, according to Royal Mail.

Alongside prior agreements it creates an Agenda for Growth and underlines the importance of the continued implementation of its modernisation programme, Royal Mail added.

"The agreement emphasises that efficiency is a pre-requisite for growth. New employee incentive arrangements will be developed and introduced to underpin this," Monday afternoon's statement said.

The deal includes a three-year pay offer and both the Royal Mail and CWU have said they will work together to develop and implement business strategies, respond to competitive challenges and develop new approaches to improve efficiency.

The parties will offer joint training programmes to deliver industrial stability. Legal protections have been put in place to help resolve issues at a faster pace and without disruption. These will be subject to review from January 2019, but under certain circumstances both parties have the right to earlier termination of the legally-binding undertakings.

Employees will receive pay increases of 3% in both 2013/14 and 2014/15 and 2.8% (linked to inflation) in 2015/16. This amounts to an overall compound base pay increase of 9.06% over the three-year period.

In addition, workers in post on 1 October this year will receive a £200 lump sum (pro-rata for part timers) paid in December 2013 in recognition of business progress.

Finally, a new employee incentive scheme will be developed and introduced from April 2014.

The agreement is subject to approval by the Royal Mail board, and the CWU has said it will recommend the agreement in a ballot of its members.

In the meantime it has promised Royal Mail there will be no strikes during the ratification process, including the whole of the Christmas trading period.

Moya Greene, chief executive of Royal Mail, 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. Working together we can create a strong foundation for the continued success of our business."