Martin Walsh wrote: ↑06 Jul 2025, 08:31
Jonathan Alsatia , this is simply not at all.
There are circa 20 thousand new entrants in Royal Mail and the overwhelming majority are working less than full time ie less that 40 hours. Of which only 146 have currently done more than 2 years service.
The cost to equalise new entrants in one go is 183 million pounds.
The reason being
You need to reduce the hours from 40 to 37 hours which increases the hourly rate for all new entrants is £27 million pounds.
Paid meal reliefs as Royal Mail have to reduce working hours for all new entrants is £28 million.
The supplements is £42 million.
Inner and outer London Weighting is worth 40 million.
Recruitment and retention payments cost 30 million.
When you negotiate a pay rise the more which is done in year 1 has compounded effect in years 2 and 3.
So the first step will apply to all new entrants in September and from a union position we are saying that no one should have to do more than 3 years to when they get equalisation. Importantly we want those 146 who have done two years to start having full equalisation from three years.
However whether you like it or not this company is making a double digit profit and they are not going to just chuck 183 million on the table and say everyone has full equalisation from now.
There will be incremental steps , with the first in September.
Remember this company imposed the new entrants contracts and it is the CWU who are now changing them for the better !
Id love to see a breakdown of your figures. Im obvs not privy to the true numbers but that £183m figure seems way too much as the cost.
A fair like for like comparison of costs to the employer for new contract and legacy would look like below. That would be moving a new contract on a 37 hour contract overnight. You mentioned that most new employees are part time so I worked it out on a 25 hour per week average. Which again, I think is fair. You also state £30m cost of recruitment and retention. I would say that expense would be substantially reduced if contracts were neutralised as retention would be far better. Thus, shouldn't really be included in costs.
No delivery supplement.
Average of 25 hours a week £12.54ph = 313.50
Employer National insurance contribution 15% = £32.60
Employer Pension contribution 13.9% - £26.83
Total = £372.93
Including delivery supplement.
Legacy contract 25 hours a week £15.05ph = £376.24
Employer National insurance contribution 15% = £42.01
Employer Pension contribution 13.9% - £35.58
Total = 453.83
The difference being
£453.83 - £372.93 = £80.90 per week
£4206.80 per year.
£4206.80 x 20,000 employees = £84,136,000
Cost to neutralise contracts -
£84,136,000
Things to note. I have not included London weighting as I have no real way to know those figures. There would also be an overtime saving as the new contract OT rate would be reduced. So that figure would be give or take. I still think its probably a good estimate.