Equalisation and the elephant in the room

[postslippete]

The CWU have a long-running promise for all inferior contracts at RM to be equalised, yet they have never explained in any meaningful detail how they plan to achieve it. Instead they appear permanently held hostage by a company that reported massive revenue's of £13.1 billion for the Year end 2025 whilst only showing an adjusted operating profit of £278 million, according to this:

https://www.ipc.be/news-portal/general- ... 25-results

In real terms that is a profit margin of just 2.1%. In other words, for every £1,000 that RM earns, it keeps only £21 as profit. That is barely above break-even, and for context, UPS operates at around an 8-10%, DHL 5-8% and DPD 5-6%

The potential savings that Ofcom projected of circa £300 million per year via USO reform might have been blown out the water but the workloads that I've seen remain high with unachievable duties, parcel volumes up 20%, increased collections and pick-ups and bulk mail still not going out on a daily basis.

So the question is - if the company can't afford full equalisation right now, when are they ever?? Imho never. The CWU's leverage looks weak because their entire argument hinges on RM's own financial narrative and ironically one of the biggest savings the company has achieved in recent years has come from recruiting new staff on inferior contracts - the very group the union claims it wants to uplift. The CWU's initial proposal to upscale the first few hundred new entrants who have served 3 years when there are still thousands of new entrants and more being recruited every year is just a token gesture. How does the union plan on scaling this when the business are still hiring more under the old model??

A 2.1% margin suggests that RM has almost no room for full equalisation, investment in automation, absorbing cost shocks or bonuses. Yet when management are still being rewarded for a system that benefits from maintaining a two-tier workforce - while subsequently telling our union that equalisation is unaffordable - that doesn't sit right.

It just reinforces that the hardship message continues to travel in one direction. How exactly does the CWU square this circle??

[mr_bigglesworth]

I fully agree, I also don't see a world where given the choice between, for example

a) everyone gets 5% payrise

b) new contracts get 10% and old contracts get nothing

the union and its members (mostly on old contracts) will never support such a deal

and given that (when you add in delivery supplement, area suplement, paid breaks) old contracts earn around 25% more (a bit over £3 i reckon) than new contracts, it will take a hell of a lot to get us equalised

[Woody84]

It won’t ever happen in my opinion and the union top brass know that too.

The one things that could perhaps make it work is the idea that once a legacy contract employee retires/leaves then a new contract employee is uplifted? But then why would the company even agree to that…

[Mr Rush]

The one things that could perhaps make it work is the idea that once a legacy contract employee retires/leaves then a new contract employee is uplifted? But then why would the company even agree to that…

What's new? For the longest time no matter how many FT departed, PT were never uplifted to fill the vacancy. Several colleagues passed up the offer to go FT after SDD (as they were advised, for reasons unknown to me) and then lived to regret it until 2014!

[GV1998]

The company has to be loss-making in order for government & ofcom to a: sell it off b: agree to uso reform… I’m sure once the latter is agreed RM will be making in the circa 300m profit like it did year on year before and including after privatisation.
These companies can dilute profits very easily based against running/updating the business costs if they have some handy accountants when it suits them.
Also unsure why new entrants not laying the blame of new starter contracts solely at the feet of the cwu when it’s RM management who issued these contracts against the will of cwu

[Saturn1]

issued these contracts against the will of cwu

That's a tenuous claim at best. Back in 2022 if RM had removed full time release for reps do you think the union would have recommended a pay deal knowing that?

They could have challenged RM when they first introduced two tier working but didn't. There's no two ways about it.

[RHONE]

I still believe the way it will go in regards to new old contacts being on a similar par is the old contracts will slowly loose the meal break payment and supplements . Don't forget a few years time and he doesn't have to abide by all the rules in place

[postslippete]

There is a very convenient pattern that the company needs to look financially on edge for major USO reform. A healthy and highly profitable RM doesn't get any regulatory relaxation nor the radical changes that they want. The CWU should have fought harder initially to avoid the two-tier contracts but they were up against a management team that was and still are hellbent on driving down long term employment costs. By the time the CWU have agreed their first touches on equalisation there will already be thousands more new recruits on inferior pay; so their achievements will be a drop in the ocean.

The CWU's red lines were crossed when RM started recruiting staff on inferior terms and here they are now debating how to reverse a system which has now become structurally embedded in the company. The more realistic scenario is that equalisation won't happen by lifting the new contracts up - it will happen by slowly dragging the old ones down by ending paid meal reliefs and delivery supplements. We will probably end up where everyone eventually meets somewhere in the middle and being told its progress. But the line that both RM and the CWU spin that the company "can't afford it" doesn't wash when there always seems to be money for management bonuses, new executives and millions spent on parcel lockers and automation. It doesn't feel like financial reality but selective affordability.

[Woody84]

There is a very convenient pattern that the company needs to look financially on edge for major USO reform. A healthy and highly profitable RM doesn't get any regulatory relaxation nor the radical changes that they want. The CWU should have fought harder initially to avoid the two-tier contracts but they were up against a management team that was and still are hellbent on driving down long term employment costs. By the time the CWU have agreed their first touches on equalisation there will already be thousands more new recruits on inferior pay; so their achievements will be a drop in the ocean.

The CWU's red lines were crossed when RM started recruiting staff on inferior terms and here they are now debating how to reverse a system which has now become structurally embedded in the company. The more realistic scenario is that equalisation won't happen by lifting the new contracts up - it will happen by slowly dragging the old ones down by ending paid meal reliefs and delivery supplements. We will probably end up where everyone eventually meets somewhere in the middle and being told its progress. But the line that both RM and the CWU spin that the company "can't afford it" doesn't wash when there always seems to be money for management bonuses, new executives and millions spent on parcel lockers and automation. It doesn't feel like financial reality but selective affordability.

[TopperGas]

I feel RM are just playing the long game until new starters out number legacy contracts and at that point they'll offer to buy out the delivery supplements etc, possibly they'll be some give and take on paid breaks and then, before you know it, contracts will all be equalised with RM having to pay little more, or even less, than they do at present.

If RM really wanted to equalise contracts now there's nothing stopping them doing so, or at least setting a date, given it's highly likely USO reforms of some kind will commence early next year leading to savings of some kind, if not the £300m suggested by OFCOM.

[SpacePhoenix]

I feel RM are just playing the long game until new starters out number legacy contracts and at that point they'll offer to buy out the delivery supplements etc, possibly they'll be some give and take on paid breaks and then, before you know it, contracts will all be equalised with RM having to pay little more, or even less, than they do at present.

If RM really wanted to equalise contracts now there's nothing stopping them doing so, or at least setting a date, given it's highly likely USO reforms of some kind will commence early next year leading to savings of some kind, if not the £300m suggested by OFCOM.

RM will have some sort of idea of how much they'd have to pay out per employment tribunal if they forced everyone onto a newer contract. As there becomes less and less staff on legacy contracts, there must be a point at which they'll decide that it's worth taking the financial hit of employment tribunals to force everyone onto the newer contracts.

[iHateD2Ds]

Profits are easily diluted to suit the narrative and I very much doubt RM will ever equalise pay and terms.

[fadetogrey63]

Profits are easily diluted to suit the narrative and I very much doubt RM will ever equalise pay and terms.

I agree, they have the new contracts over a barrel, regardless of the pay etc it's also the Sundays and the late afternoons/evenings shifts which we have no choice in doing.. The only thing I can see is maybe the same hourly rate

[Playmail]

If min wage keeps increasing by over 4% and our wage only goes up by 2% we will all be caught up by min wage legacy or new starter

[Chelseablue]

Equalisation aint gonna happen. No way id stay in a job , where financially your being shafted big time by your employer . JMO soz