Relief as agreement settles Royal Mail dispute

Both Royal Mail and the union representing around 120,000 of its workforce have welcomed an agreement which settles their dispute over pay and working practices.

The disagreement, which centred around Royal Mail's plans to modernise the postal service, triggered days of industrial action during 2009 and attracted widespread criticism from business groups.

According to the agreement, Business Transformation 2010 and Beyond, "Royal Mail and CWU have developed a shared vision of modernisation". Under the terms of the deal, on which Communication Workers' Union (CWU) members are yet to formally vote, staff would receive a 6.9% pay rise over the three years from 1 April.

Over the same period, the working week would be reduced by one hour to 39 hours. In addition, full-time staff would receive a payment of £1,000 "to reward them for their part in the modernisation of the business".

While Saturday will run as a normal working day for delivery staff, the agreement promises the introduction of flexible working practices and a "better work-life balance". Royal Mail added that the 80-page agreement would allow it to continue with its much-needed modernisation, which includes the installation of more automated machinery.

Ransom

It had been widely feared that disruption from the dispute, which stood in the way of Royal Mail's £2 billion modernisation plan, would erode trust of the organisation among the companies who rely on its services. While business groups were dismayed by last October's vote for strike action, the Federation of Small Businesses said last year that the high price of alternatives meant that small companies felt "held to ransom".

Stating that the agreement recognised "the reality of automation, competition and the financial challenges facing the [Royal Mail]", CWU deputy general secretary Dave Ward added that it put the interests of union members at its heart.

"There's a balance of pay and operational changes which will help offset job losses and ensure our members are fairly rewarded for change," he said.

Describing the resolution as "good for the business", Royal Mail Group chief executive Adam Crozier added that it would allow the company to "get on with its modernisation".

"It's a good and fair deal for our people, and it's a good deal for our customers as it ensures stability over the next three years," he added.

Comments by Mark Higson, managing director of Royal Mail Letters, echoed sentiments expressed by the British Chambers of Commerce in summer 2008, when spokesperson Sam Turvey had explained that the only way to improve the postal service was to continue its modernisation.

Speaking on Monday, Higson said that the agreement is "crucially important in allowing Royal Mail to compete successfully in the highly competitive communications market and to help counter the effect of the ongoing decline in traditional mail volumes.

"It enables the business to rapidly complete the introduction of the latest generation sorting technology and new delivery methods to improve efficiency," he added.

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IMAGE: Tim Ireland/PA