Royal Mail welcomes CWU ballot result on groundbreaking agreement

Royal Mail plc (RMG.L) is pleased that Communication Workers Union (CWU) members have voted overwhelmingly in favour of a ground-breaking agreement on an agenda for growth, industrial stability, pay and protections.

Royal Mail PLC’s Board has also approved the agreement.

The Agreement, announced as agreed in principle on 9 December, was recommended to its members by the CWU and is believed to be the first of its kind in the UK. It includes legally-binding terms covering industrial stability and protections, together with a three year pay deal. The three year pay deal includes a three per cent increase this year. The Agreement covers a total of 139,000 employees in Royal Mail1.

The Agreement builds on the previous “Business Transformation 2010” agreement and other existing agreements. It represents a joint commitment to radically improve industrial relations and create a can-do culture in the interests of customers, employees and the company.

Moya Greene, Chief Executive, Royal Mail plc, said: “I am pleased that our people have voted in favour of the terms of the agreement. This is the first critical step to provide long term stability and certainty for Royal Mail, our employees and our customers. Now the hard work starts. Working together we will create a strong foundation for the continued success of our business.”

The Agreement underlines the importance of the continued implementation of Royal Mail’s modernisation and transformation programme across its operations. Royal Mail is adapting its core network to accommodate an increasing number of parcels. This is one of the biggest transformation programmes in UK industry and it is changing every aspect of the way our people work. The Agreement emphasises that efficiency is a prerequisite for growth.

Royal Mail and CWU have committed to create an agenda for growth, building partnership and participation across the company. Both parties will work together to develop and implement business strategies, respond to competitive challenges and develop new approaches to improve efficiency. There will also be joint Royal Mail/CWU training programmes to deliver industrial stability.

The Agreement also provides ongoing legal protections that benefit Royal Mail and employees. The industrial stability framework sets out a new approach to resolving workplace issues at a much faster pace and without disruption. Defined processes and strict timescales will be applied to resolve any disputes. New mediation procedures will introduce additional expertise and help reach agreement, with internal processes escalating automatically to independent external mediation as required.

The protections include: the maintenance of existing terms and conditions of employment; a commitment to retain a predominantly full-time workforce; no additional franchising or outsourcing; and an objective to continue to manage change without recourse to compulsory redundancy.

Both parties will now proceed to implement the various elements of the Agreement.

CWU members also voted to accept a separate Pensions Agreement. This reconfirms the amended proposal for the Royal Mail Pension Plan, which followed a consultation last year, and sets out Royal Mail’s commitment to make higher employer contributions to the Royal Mail Defined Contribution Plan.

The implementation of the pay and pensions agreements does not change the financial outlook for Royal Mail plc or our medium term objectives.