Ltb 021/16 Future of Romec: Acquisition by Royal Mail

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No: 021/16
Ref: PTC/RE/dj/335

Date: 14 January 2016




TO: ALL BRANCHES WITH POSTAL MEMBERS

Dear Colleague,

RE: Future of Romec: Acquisition by Royal Mail

We are pleased to report that following a lengthy and thorough review process, reported in LTBs 078/15, 193/15, 338/15 and 462/2015, Royal Mail has confirmed its intention to become the sole owner of Romec, bringing to an end the joint venture which was originally set up in October 2002 and establishing Romec as a wholly owned subsidiary company within the Royal Mail Group.

A joint statement from Royal Mail, CWU and Unite is attached, together with an internal announcement being made to Romec employees today.

As reported in LTB 078/2015 issued in February 2015, Royal Mail’s agreement to a proposal from CWU to establish an independently chaired joint review of the future provision of facilities management services came against the background of Royal Mail’s stated preferred option to outsource FM work by disposing of its majority shareholding in Romec to its joint venture partner Cofely. We are pleased to say that Royal Mail engaged positively in the review, which was independently chaired by Peter Thompson, and on the basis of a careful consideration of the needs of the business Royal Mail has taken the decision to insource, rather than outsource this work.

A key element of the review is the attached “Agreement on the future provision of Facilities Management services to Royal Mail”. This agreement will be the subject of an individual member ballot of CWU members in Romec following a national briefing which will take place on Thursday 21st January 2016 details of which will be notified separately.

The agreement, with a brief paragraph by paragraph of summary is attached. Key elements are:

Terms and conditions for existing staff are unchanged
There are limited changes to terms and conditions for new starters
The agreement includes a 3 year pay deal providing an increase of 4.57% in basic pay over 3 years
There is a commitment to the creation of a new employee relations culture including establishment of a national consultative forum.
The agreement takes forward the approach adopted in the review of the Future of Romec by committing all parties to joint working to deliver the measures necessary to make Romec a success as part of Royal Mail Group

We would wish to thank Branches and Representatives in both Romec and Royal Mail for their support in the campaign to bring Romec in-house which played a significant part in establishing the review process.

Any enquiries for engineers and admin grades should be addressed to PTCS department, quoting reference PTC/RE/dj/335.
Email address: djeffery@cwu.org

Any enquiries for Cleaning grades should be addressed to the Outdoor department, quoting reference 120. Email address: outdoorsecretary@cwu.org.

Yours sincerely


Ray Ellis Bob Gibson
Assistant Secretary Assistant Secretary

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Royal Mail/Unite/CWU Joint Statement
Now that the outcome of the review into the future governance of Romec has been announced, we are able to publish the agreement which Royal Mail, Unite and CWU negotiators reached as part of the Joint Working Group process supporting this review. We recognise that this process has taken longer than anyone would have wished or envisaged, and we would like to thank everyone for their patience. The discussions were inevitably sensitive and confidential, but have been productive and the proposed agreement isa key instrumental factor in the decision about the future.
The negotiators’ agreement is attached to this joint statement and both CWU and Unite have indicated they will be shortly putting it to their members in Romec with a recommendation to accept. The Joint Working Group will continue in existence to oversee the next stages in the process and to discuss the implementation of the agreement once it is ratified, and further details of this will be agreed and communicated in due course.

Martin Gafsen Peter Walls Brian Scott Ray Ellis Mick Kavanagh
Royal Mail Royal Mail Unite CWU CWU

14 January 2016

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Agreement on the Future Provision of Facilities Management Services to Royal Mail

COMMENTARY

Introduction

The full text of the agreement is attached. The following is a brief summary, paragraph by paragraph.


Background

The opening paragraph confirms the distance that has been travelled – in 2014 Royal Mail and Cofely conducted a review and concluded that their preferred option was for Royal Mail to transfer its stake in Romec to Cofely. CWU proposed an independently chaired review between Royal Mail and the unions to evaluate the case for Royal Mail’s preferred option and the CWU’s alternative of making Romec a 100% owned subsidiary company within Royal Mail Group. The outcome was a recommendation that Royal Mail take full control of Romec, which has now been endorsed by the Royal Mail Board. Romec will become a wholly owned Royal Mail company.

Governance

Romec will remain a separate bargaining unit, within the Royal Mail Group of companies.

Efficiency

There is a joint commitment to meet industry standards of quality, efficiency and cost effectiveness.

Talks will begin immediately on developing and implementing an agreed programme of engineering efficiency. Cleaning efficiency will be annually reviewed to ensure it remains at market level. A joint review of overheads will be undertaken to eliminate unnecessary duplication of support services between Royal Mail and Romec. Non facilities management services provided by Romec – Manufacturing, Automation, Projects, Fire & Security, Print & Reprographics, Office Management Services, Street Furniture and Wheeled Equipment - will also be jointly reviewed, taking account of current and future Royal Mail requirements.

Terms & Conditions

All existing employees will retain current terms and conditions.
Pay will increase as follows:
1% backdated to 1st April 2015
1.5% from 1st April 2016
2% from 1st April 2017
Increases will be fully consolidated and flow through to allowances (including London Weighting) and overtime.

The current cleaners’ bonus scheme and the engineering training allowance will cease after March 2016 and recipients will receive a lump sum payment equivalent to their earnings from their scheme/allowance between April 2015 and March 2016. Discussions will take place on a new incentive scheme to reward over achievement against agreed efficiency and productivity levels.

The next pay review will be on 1st April 2018.

An incremental scale will be introduced for cleaners recruited after the acquisition date, with progression from minimum to maximum over three years. The minimum rate will be set at adult (over 25) national minimum wage (plus London weighting where appropriate). The maximum will be the full Romec rate for cleaners (plus London weighting where appropriate).

Leave entitlement for new entrants in all CWU grades will be 20 days per year, plus bank holidays, rising to 25 days plus bank holidays after 5 years.
New entrants will qualify for 6 weeks full contractual sick pay and six weeks half pay after 12 months service, rising to 13 weeks full sick pay and 13 weeks half pay after 2 years service. Sick pay arrangements for new employees after 4 years service will be jointly reviewed in 2018.

Redundancy compensation will be capped at a maximum of 2 years’ salary. A joint review of redundancy terms will take place this year.

Management and Supervision

A joint review will lead to the creation of a new management and supervisory structure.

Employee relations culture

There is a commitment to establish a strategic national forum as part of the process of creating a new employment relations culture, supported by new structures for dispute resolution and collaborative working with use of mediation where necessary.

Summary

The decision to in source Romec represents a considerable success for the union and is a validation of the approach for resolving key issues facing the business adopted by CWU and Royal Mail in the Agenda for Growth agreement.

Clearly, the union has had to temper our expectations, for example on growth in basic pay, and made some limited concessions on terms and conditions for new starters. However this is against a background where the alternative facing our members was outsourcing without even the limited protection provided by TUPE legislation, where new employees would immediately be outside the scope of collective bargaining. Instead, this agreement provides the opportunity for the union to play a key role in building a successful new in-house business whose employees remain covered by the collective agreements negotiated by the union and have an opportunity to share in the success of the business going forward.

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No: 022/16
Ref: PTC/RE/dj/335

Date: 14 January 2016



TO ALL BRANCHES WITH ROMEC MEMBERS

Dear Colleague
RE: National Romec Briefing

In consultation with the DGS(P) department we are holding a National Briefing on Romec issues on:

Thursday, 21 January 2016
11.00 am
Main Meeting Room
Birimingham & District Branch Office
47 Summer Lane, Hockley, Birmingham B19 3TH

Tea and coffees to be served on arrival.

Representatives invited to attend are:

Romec National Representatives
Romec Regional Cleaning Representatives
Romec Regional Engineering Representatives
1 Delegate to attend per Branch

We can confirm that release for representatives to attend this Briefing has been cleared by Romec. In the event there are any difficulties encountered then please bring it to the attention of your respective Romec Representative in the first instance, who will make the necessary representation accordingly.

Travel and subsistence costs associated with attendance at the Briefing will be in line with the instructions and advice issued in LTB 506/04.

Any enquiries relating to this LTB should be addressed to the Outdoor department, quoting reference 120. Email address: outdoorsecretary@cwu.org or PTCS department, quoting reference PTC/RE/dj/335. Email address: djeffery@cwu.org.

Yours sincerely



Ray Ellis, Bob Gibson,
Assistant Secretary Assistant Secretary