Royal Mail Welcomes CWU Ballot Result

RNS Number : 3666Z

Royal Mail PLC

05 February 2014

 



Royal Mail Plc

5 February 2014

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.

Ends

For more information contact

Media Relations

Mish Tullar     07423524154

Julie Pirone    07711 446358

Investor Relations

Catherine Nash  020 7449 8297

Email: [e-mail] 

Notes to editors

1    The agreements on pay, industrial stability and protections apply in respect of all CWU represented grades in Royal Mail Group Ltd, including Royal Mail Core Operations, Logistics, Engineers, Fleet Maintenance Services and Royal Mail International, with some minor variations for other employees including those in Parcelforce Worldwide.

About Royal Mail plc:

Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK's designated universal postal service provider. UK Parcels, International and Letters (UKPIL) comprises the company's UK and international parcels and letters delivery businesses operating under the "Royal Mail" and "Parcelforce Worldwide" brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.

The Agreement - key elements

1.     Legally-binding contract 

A Royal Mail contract withthe CWU to ensure industrial stability and provide protections. These include:

Industrial stability⁺

-       A new approach to resolving workplace issues at a much faster pace and without disruption.

-       A joint commitment to radically improve industrial relations and create a can-do culture.

-       Defined processes and strict timescales to resolve disputes.

-       New mediation procedures will introduce additional expertise and help reach agreement. Internal processes escalating automatically to independent external mediation where a dispute cannot be resolved internally.

-       Joint Royal Mail and CWU trainingprogrammes to deliver industrial stability

Protections⁺

-       No zero hours contracts for employees.

-       Current employment model of a predominantly full-timeworkforce in Royal Mail core operations continues.

-       No material change to current structure ofthe company in relation to delivery of the Universal Service.

-       Maintaining the objective of delivering change withoutrecourse to compulsory redundancy.

-       No additional franchisingor outsourcing.

These legally-binding undertakings on industrial stability and protections are ongoing. The protections are subject to review - at periodic reviews starting from January 2019. Royal Mail also has the right to earlier termination of the protections in exceptional circumstances, such as a threat to the financial sustainability of the business. Under certain circumstances, including the breakdown of industrial stability, both parties have the right to earlier termination of the legally-binding undertakings.

2.     Participation

-       Both parties will work together to respond to competitive challenges and develop new approaches to improve efficiency

-       Royal Mail and CWU will work together to develop and implement business strategies.

-       Anewly created "Growth Forum". Three seniorexecutives from bothparties, including theCEO and the CWU's Deputy General Secretary, to drivechange across the company.

3.     Pay

A three-year pay deal:

2013-14

-           3.0% basepay increase, backdated to 1 April 2013.

-           £200 lump sum paymentfor each full time eligible employee (pro rata for part- timers) inpost on 1 October 2013, in recognitionof business progress. This was paid before Christmas in addition to any Christmas bonus.

-       Additional increase in the over 10 hours overtime rate⁺⁺.

-       Scheduled attendance payments during periods of annual leave will be extended⁺⁺.

2014-15

-       3% basepay increase.

2015-16

-       2.8% basepay increase. Subjectto review, ifinflation is below 2.3%or above3.3%.

The increases over the three year period apply to the usual allowances and overtime payments.

4.     Pensions

-     The Agreement reconfirms the amended proposal for the Royal Mail Pension Plan (RMPP), which followed a consultation earlier this year. Royal Mail has agreed to make higher employer contributions to the Royal Mail Defined Contribution Plan.

-     No further changes to the RMPP until at least March 2018, subject to certain conditions. Any proposed changes would be discussed under a joint review process with the CWU.

⁺All subject to the detailed provisions of the legally-binding agreement.

⁺⁺Applicable to employees in the Royal Mail Core Operations Network.

 

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