TIDMRMG
RNS Number : 0791V
Royal Mail PLC
09 December 2013
FOR IMMEDIATE RELEASE - 9 December 2013
ROYAL MAIL AND CWU REACH AGREEMENT IN PRINCIPLE ON AN AGENDA FOR
GROWTH, INDUSTRIAL STABILITY, PAY AND PROTECTIONS
Royal Mail plc (RMG.L) today announces that Royal Mail Group Ltd
(Royal Mail) has agreed in principle a ground-breaking new
agreement including a three-year pay offer (the Agreement) with the
Communication Workers Union (CWU). The Agreement, believed to be
the first of its kind in the UK, includes legally-binding terms
covering industrial stability and employee protections. The
Agreement will cover approximately 139,000 employees in Royal
Mail(1) .
This is the first time Royal Mail and the CWU have entered into
an agreement of this type containing legally-binding provisions.
The Agreement builds on the "Business Transformation 2010"
agreement and other existing agreements to create an Agenda for
Growth and build the right environment for business success. 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.
The Agreement underlines the importance of the continued
implementation of Royal Mail's modernisation 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. New employee incentive
arrangements will be developed and introduced to underpin this.
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.
Industrial stability and employee protections
The Agreement 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 employee 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.
These legally-binding undertakings on industrial stability and
employee 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.
Pay
The Agreement includes a revised three-year pay offer and an
employee incentive scheme. The principal terms are:
1) Pay increases over three years: 3.0 per cent in FY 2013/14
backdated to April 2013, 3.0 per cent in FY 2014/15 and 2.8 per
cent (subject to review if inflation is below 2.3 per cent or above
3.3 per cent) in FY2015/16. The expected three-year pay deal
amounts to an overall compound base pay increase of 9.06 per
cent
2) A GBP200 lump sum payment (pro-rata for part timers), paid in
December 2013, in recognition of business progress to all employees
in post on 1 October 2013
3) A new employee incentive scheme, to be developed and then introduced from April 2014
The Agreement reconfirms the amended proposal for the Royal Mail
Pension Plan, which followed a consultation earlier this year.
Royal Mail has also agreed 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.
The Agreement is subject to approval by the Royal Mail plc
Board. The CWU Executive has said it will recommend the Agreement
in a ballot of its members. The CWU has also confirmed to Royal
Mail that there will be no disruption through industrial action
during the ratification process of the Agreement, including the
whole of the Christmas trading period.
Moya Greene, Chief Executive, Royal Mail plc, 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."
Ends
Contact: Mish Tullar on 07423 524154
Notes:
1 The proposed agreements on pay, industrial stability and
employee 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.
The Agreement (subject to ballot) - key elements
1. Legally-binding contract
A Royal Mail contract with the CWU to ensure industrial
stability and provide employee 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
Employee Protections(+)
- No zero hours contracts for employees.
- Current employment model of a predominantly full-time
workforce in Royal Mail core operations continues.
- No material change to current structure of the company in
relation to delivery of the Universal Service.
- Maintaining the objective of delivering change without recourse to compulsory redundancy.
- No additional franchising or outsourcing.
These legally-binding undertakings on industrial stability and
employee protections are ongoing. The employee protections are
subject to review - at periodic reviews starting from January 2019.
Royal Mail also has the right to earlier termination of the
employee 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.
- A newly created "Growth Forum". Three senior executives from
both parties, including the CEO and the CWU's Deputy General
Secretary, to drive change across the company.
3. Pay
A three-year pay deal:
2013-14
- 3.0% base pay increase, backdated to 1 April 2013.
- GBP200 lump sum payment for each full time eligible employee
(pro rata for part- timers) in post on 1 October 2013, in
recognition of business progress. This will be 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% base pay increase.
- New incentive scheme to be developed and introduced by April 2014.
2015-16
- 2.8% base pay increase. Subject to review, if inflation is below 2.3% or above 3.3%.
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.
- The agreement on pensions will be subject to ballot by the CWU
at the same time, though separately to, the main Agreement.
(+) All subject to the detailed provisions of the
legally-binding agreement.
(++) Applicable to employees in the Royal Mail Core Operations
Network.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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