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Royal Mail caves in to the militants: Union wins £1,400 bonus, 7% rise and shorter hours

By Becky Barrow for MailOnline
Updated: 05:09 EDT, 9 March 2010



Royal Mail last night bowed to union demands by offering workers a 'gold-plated' pay package which will give them more money - for less work.

The generous deal involves a 7 per cent pay rise, a £1,400 bonus and increased maternity leave.

It is in stark contrast to the experience of millions of private- sector workers crippled by pay freezes or pay cuts, redundancy and forced to work part-time. Bumper deal: Royal Mail postal workers are set to receive a 7 per cent pay rise over three years as well as further bonus payments

The deal follows three months of bitter negotiation with the militant Communication Workers' Union.

Both sides yesterday insisted the deal was a ground-breaking move which will allow the company to modernise.




But it comes with an expensive price tag for a workforce which last year caused misery for Britain with five months of strike chaos and by failing to meet its first-class post delivery target.

The deal was heavily criticised by the TaxPayers' Alliance, which labelled it 'lunacy' at a time when most private sector workers were suffering pay cuts. Long-running dispute: Strike action by Royal Mail postal workers led to targets for the delivery of first and second class letters being missed

The 170,000 Royal Mail workers will get a total pay rise of nearly 7 per cent over the next three years. It will start with a 2 per cent rise next month, followed by 1.4 per cent in April 2011 and a further 3.5 per cent in April 2012.

They will also get a bonus of £1,400 for agreeing to the deal in addition to other bonuses they already get.

They will be allowed to work one hour less each week, with a typical working week cut to 39 hours, and their job security is also unrivalled. In the past eight years, the company has cut 60,000 jobs without forcing anybody to go. The agreement includes a pledge to try to avoid making any compulsory redundancies.

Royal Mail has promised to keep 'at least 75 per cent of workers as full-time', and will not force any full-time worker to work part-time, or vice versa, according to the union.

Mark Wallace, of the TaxPayers' Alliance, said: 'Given Royal Mail's severe financial problems, it is lunacy to pay staff more money for less work.

'It seems the Royal Mail have buckled in the face of aggressive strike action and pressure from the unions.

When you consider that most people in the private sector couldn't dream of getting a gold-plated deal like this in the next few years, this is clearly an excessive settlement.'

Royal Mail workers will also enjoy a generous pay package for parents.

Under the agreement, which is called 'Business Transformation 2010 and Beyond', women on maternity leave will be paid their full basic salary for 26 weeks, rather than 18. Fathers will also win, with the paternity package doubled from one to two weeks, also on full basic pay. 'Fair and good': Adam Crozier says the deal will help Royal Mail get on with its 'modernisation'

On average, Royal Mail workers already enjoy a much better deal than counterparts at rival companies. At UK Mail, workers get a less generous pension, typically work a 40-hour week and get only statutory maternity pay.

Last night, Shadow Business Secretary Ken Clarke raised his fears about the cost of the deal.

He said: 'The Government committed several months ago to an injection of private capital and private sector management into the business in order to resolve the pensions crisis and carry though the change which is now needed.

'What we have instead is a rather expensive-looking industrial relations settlement with pay rises and a shorter working week which we are told will buy the modernisation that is required.

'It will be interesting to discover how much the taxpayer is paying for these promises.'

Negotiations between Royal Mail and the CWU became so bitter that they were forced to hire an independent third-party - Roger Poole, the former chairman of the Northern Ireland Parades Commission - to mediate.

Royal Mail chief executive Adam Crozier said: 'This agreement is good for the business as it allows Royal Mail to get on with its modernisation. It is a good and fair deal for our people.'

CWU deputy general secretary Dave Ward said: 'It's been a long time coming, but this deal delivers on the major issues which postal workers have fought for.'


Royal Mail strikes deal with postal workers giving them inflation-busting 7% pay rise for working less



