We continue to offer the best terms and conditions in the industry
The employee protections we committed to with the CWU at privatisation - the Agenda for Growth - remain in place. They are not up for review until January 2019.
Don’t forget though, the company may have to end its commitment to these protections if there is a breakdown in industrial relations. We couldn’t afford to pay for them in that situation.
Terms and conditions
We are ready to make big commitments:
- Remaining committed to the best terms and conditions
Maximising the number of high quality jobs. This is a big commitment in an industry with lots of lifestyle couriers.
New terms and conditions for new starters: There would be a longer period of build-up to the same rate of basic pay as existing employees get. Their holiday and sick leave entitlement, and the allowance structure, would be more in line with the market.
Buy down of legacy allowances: We would buy down the legacy allowances that some employees have held for many years. This would make the pay package fairer for everyone.
Changes to sick pay: When we are sick, we need to take time off to recover. No question. Many of us are rarely off sick. But, we spend £100 million a year on sick pay. We have a much more generous policy than the competition. In return for losing the first three days’ sick pay, we are proposing a period of reduced hours before retirement with no loss in pay.
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We are in talks with the union on pensions, the working week, agreements and the future shape of Royal Mail
We’re proud to be the best employer in our industry. But, the company is in a tough spot. Letter volumes keep going down. It’s hard to make good money in parcels.
Last week, we sent you a News Flash about our talks with the CWU.
To keep being the best employer, we need to change a lot of things, fast. Neither the union nor management pay our bills. The customer does.
Your terms and conditions
The employee protections we committed to with the CWU at privatisation - the Agenda for Growth - remain in place. They are not up for review until January 2019.
Don’t forget though, the company may have to end its commitment to these protections if there is a breakdown in industrial relations. We just couldn’t afford to pay for them in that situation.
We remain committed to the best terms and conditions in our industry. In return, we are looking for new conditions for new starters, buy down of legacy allowances and changes to sick pay.
Your pay and working week
CWU wants a 35-hour week (gross) and an above inflation pay deal. That’s actually (net) a 31-hour week with breaks. We really need to think about that. The shorter working week alone is around a 12% increase in hourly pay. Even if this did happen, it would be staged over a number of years.
Royal Mail, on the other hand, has offered a pay deal over three years based on specific productivity improvements. The more productive you are, the more you benefit. It really helps us to stay competitive.
Your pensions
We are committed to providing the best retirement benefits in the industry. We are sorry that Sections B and C of the Royal Mail Pension Plan (the Plan) will close to future accrual on 31 March 2018.
Under our new Defined Benefit proposal, we expect the annual pension of a member earning £25,000 a year, who takes an annual pension plus a tax-free lump sum, to increase from £10,400 – under our original proposal - to £12,100*. Your State Pension is on top of these numbers.
Industrial action
Any industrial action – or the threat of it – damages the Company. We lose the trust of our customers. We lose business. In that situation, the proposals we are discussing would have to be taken off the table.
Times have changed. Customers can move their parcel business very easily to one of our competitors.
A number of our major competitors were born out of industrial action at Royal Mail in the 1970s and 1980s. They include Yodel and UK Mail.
* The illustrative example is for a Section C member aged 50 in 2018 with 30 years’ pensionable service, who is paid £25,000 a year and stays with the Company until retiring at age 65. It shows the possible effect on a member’s retirement benefits of the Company’s original proposal and its proposed Defined Benefit cash balance scheme on the basis of the assumptions used. It is for illustration purposes only and does not guarantee any benefits or give rise to any entitlements. It should not be used for financial or retirement planning purposes. Original proposal “pension + cash” figures based on Defined Contribution benefits being provided outside of RMPP. The figures are shown in today’s money terms relative to CPI inflation, exclude the State Pension, and are consistent with those in the original proposal booklet.
The example makes no allowance for pension increases or interest in payment. It assumes that Defined Benefit cash balance scheme target increases of 2% a year above CPI inflation are achieved, but please note that under the Defined Benefit cash balance solution these would be targeted but not guaranteed until granted. The member is assumed to live for 20 years, which represents broadly average life expectancy, and is not survived by a spouse. Pay quoted is pensionable pay before the lower earnings deduction.
