Joint Statement AFG

[Glenno]

04 November 2014
LTB 698/14 - National Joint Statement - Growth, Efficiency and Incentives

No: 698/14

4th November 2014





To: All Branches with Postal Members





Dear Colleague



NATIONAL JOINT STATEMENT – GROWTH, EFFICIENCY AND INCENTIVES



Since the early summer CWU and RMG have been discussing the impact of accelerated direct delivery competition and the pressures this is creating across the business and on frontline employees.



Although dealing with these issues always was and remains central to the objectives of the Agenda for Growth agreement, it is clear that the developing situation requires national guidance and support to the field, particularly to ensure that the inevitable efficiency issues that will arise are managed fairly in line with our IR procedures and relevant National Agreements.



As part of these ongoing discussions it was previously reported that the Union wrote to Royal Mail stating that we understood the difficulties of the current environment and that we were willing to address efficiency issues, but that this must be part of a balanced approach generating a greater focus on growth and introducing new incentive arrangements. This led to negotiations taking place with the aim of securing a National Joint Statement covering growth, efficiency and incentives.



During the course of these negotiations there were regular update reports to the Postal Executive and feedback from CWU Divisional Representatives, both of which demonstrated that CWU members’ priorities are changing and that expectations on incentives were not necessarily top of the agenda. Instead, there was a growing recognition amongst CWU representatives and members that unfair competition now poses an increasing threat to jobs, terms and conditions.



Given the current environment this has proven to be a very testing set of negotiations for the national parties. However, after taking account of feedback and the input we have received, talks have now concluded with the attached National Joint Statement that was unanimously endorsed by the Postal Executive today. It can be seen from the content of the statement that we have achieved our objective of a balanced approach bringing growth to the forefront with a renewed focus and structured plan, securing very significant safeguards on efficiency, alongside a one year profit related scheme for employees, enhanced buy-down options and the review of MTSF being deferred from January 2015 to May 2015.



The salient points of the Joint Statement are as follows:-



The Plan for Growth



Achieving sustainable growth is the single most important thing to secure the future of the Postal Industry – but with our traditional work in structural decline and with increasing competition – it is also the single most difficult challenge to overcome. It will require a major shift in current thinking from the company, the Union and the workforce and means everybody must come to the table prepared to consider radical alternatives and enhancements to the services we provide and the way we work. The plan for growth in this Joint Statement represents a strong platform for CWU and the company to seriously develop the growth strategy and ultimately put Royal Mail in front of the marketplace, rather than simply responding to it. It includes the following commitments:-



· A structured four point plan pursuing various strands for growth, including an immediate review of the current workplan/pipeline to explore radical opportunities outside the constraints of our existing networks and delivery specification.


· Addresses an immediate concern about the Optimised Mail Preparation Project, integrating this into the wider work plan review and ensuring it cannot be considered in isolation to the overall growth strategy.


· Dedicated resource to support the plan via project teams that will work under the auspices of the National Growth Forum.


· New investment to support the plan with CWU involved in detailed sessions on the company’s investment strategy, inputting our views on the level and prioritisation of investment required to deliver the growth strategy.


· Structured national and regional Growth Workshops, looking in depth at the commercial environment, current growth initiatives and putting forward new ideas.


· A special focus on areas already facing significant direct delivery competition, with the opportunity to identify new work tailored to their circumstances, using where practical these areas to trial more radical solutions.


· A report to be published, taking account of commercial sensitivities, on the output of the work of the project teams, encouraging the widest possible input and discussion on growth.


· By January 2015, a process will be introduced to enable employees to input their ideas on growth.



Efficiency



In today’s industrial world dealing with companies who continually seek to improve efficiency is a reality for all trade unions. However, in Royal Mail, with structural decline in our traditional work areas, a highly competitive and privatised environment; and a Regulator crawling all over Royal Mail’s performance figures, the debate on efficiency is intensifying.



Against this background it is crucial that the Union continues to face up to these issues by providing CWU representatives with a framework for negotiations that allows them to fairly protect the interests of our members at local level.



The section on efficiency in this Joint Statement builds on the statement agreed in March, acknowledges the difficult environment Royal Mail operates within and above all secures important safeguards that recognise the situation is not the same everywhere. This includes:-



· An equal focus on units where workload has increased as well as decreased.


· In delivery, depending on local circumstances, a choice over how the review can be undertaken.


· All reviews will be carried out in accordance with National Agreements and our IR procedures.


· Confirmation that Royal Mail’s own targets will not predetermine or dictate the outcome of the local review.


· A very balanced list of objectives for the review that allows the Union’s agenda to also be at the forefront.


· Specific confirmation that any change to duty times and/or attendance patterns are subject to local agreement.


· The opportunity to increase part time contractual hours to reflect the hours actually worked and planned.


· Actual offers of VR can only be made when the review is agreed and where surplus staffing exists.


· The opportunity to undertake an initial joint scoping exercise to maximise the available choices for employees and integrate these reviews with other activities such as Postbox Strategy.



It is essential that when dealing with these local reviews the Union approaches this in a professional way and that where difficulties arise we fully utilise the terms of our Industrial Relations procedures.



Incentive Arrangements



With declining volumes in some locations and no nationally agreed level of performance, reaching agreement on new incentive arrangements has been extremely difficult. It must be recognised that the debate on incentives is also taking place against the background of one of the most successful pay deals in the UK, the introduction of free shares, the 100% increase recently achieved by the Union on the Christmas bonus and the SAYE Scheme put forward by Royal Mail being significantly oversubscribed. In the end, taking account of the overall picture, a settlement has been reached on an interim approach that better reflects the circumstances we are dealing with during the period April 2014 to April 2015. This includes:-


· The introduction of a 1 year profit related scheme that has the potential to return a lump sum to employees for over achievement of the company’s operating profit target. This does not include profit generated by one off exceptions such as the sale of an existing Royal Mail site. However, the target is the same as that which triggers Royal Mail Executives’ incentive plans.


· There are two enhancements to current buy-down options. Firstly, the company will pay 50% of the cost of tax and National Insurance for employees who choose to buy-down their hours. Secondly, there is a new option linked to pensions that increases the formula for the lump sum by 25% and also means this is tax and National Insurance free, under current HMRC Guidelines.


· The national review of MTSF is put back from January 2015 to May 2015, with the opportunity to scope a restructured package that better supports the overall age profile of the workforce.


· The company has committed to further incentive arrangements beyond April 2015, with consideration of more tailored incentives and talks on this are due to conclude by March 2015.


Conclusion



The content of this Joint Statement represents the strongest position the Union has achieved to date on taking growth forward and will lift the whole debate, pushing Royal Mail to do more and encouraging CWU representatives to come forward with our own ideas. As part of this the Postal Executive has agreed that at an appropriate point in 2015 the CWU will hold a Policy Forum on achieving growth.



The Statement gives the Union a strong element of control over how efficiency is tackled in the workplace, a subject that with or without this statement our members will still have to face at local level. With the statement, we have been able to introduce significant safeguards and also ensure that the different picture emerging across the UK can be catered for. Finally, we have a package of measures consisting of a one year profit related scheme, enhanced buy-down options and a deferred MTSF Review, all of which will help deal with current circumstances.



Please ensure the content of this LTB is circulated to all CWU Representatives and distributed in workplaces. Following the National Briefing the Union will be preparing a communication to individual members’ home addresses and this will cover key issues currently facing the Postal side of the Union.



Finally, you will note that the terms of the Statement will be discussed at the National Briefing, following which we will provide further guidance for our Representatives.



Any enquiries on the general content of this LTB should be addressed to the DGS (P) Department; specific functional enquiries should be addressed to the relevant Assistant Secretary.



Yours sincerely




Dave Ward
Deputy General Secretary (P)

Ray Ellis Bob Gibson
Assistant Secretary Assistant Secretary


Terry Pullinger Andy Furey
Assistant Secretary Assistant Secretary

[5plusbonusball]

Does that mean our desperately needed revision penciled in for january will now be put back to may? And there may or may not be a bonus at the end of this accounting year?
Methinks the management have already penciled in what they will get in bonuses and banked it whether we get some of it or not

[shepherdess]

Not much is it probably equates to about a hundred pounds pro rata

[rhino49]

Not much is it probably equates to about a hundred pounds pro rata

I can see you all pulling your tripes out for another £100 a year ...NOT !!!
On the other hand - if you sit on the board and DON'T pull your tripes out, it could be £10,000 or more. Executives will be paid at the same profit threshold but don't expect 150,000 front line employees to get a substantial share of the profit (each) from a business that has to pay shareholders.

[worktotime]

doesn't the incentive scheme sound familiar , a share of the profits for a year if above there over inflated profit figure , Colleague shares comes to mind , any payout we haven't made nothing.

[Lincox]

Assuming there are 150,000 employees to share this bonanza, the profit over and above there target profit would have to equate to £150million in order for each of them to get £500. Less tax & ni that equates to approx £350 . A mere £7 a week extra based on an unachievable profit. That is the basis of what our brilliant team of CWU Officials and the PEC are prepared to endorse, and the cost to us is more and more efficiencies, because we have a company that is treading water and a union that has lost all sense of negotiating fair and reasonable rewards for assisting this company become more profitable and putting more money into shareholder pockets.

[fishtank]

The introduction of a 1 year profit related scheme that has the potential to return a lump sum to employees for over achievement of the company’s operating profit target

Only the CWU would agree to an incentive deal based on over achievement of profits at exactly the same time the money geezers in the city are predicting that they won't even achieve the achievement.

http://www.theguardian.com/business/mar ... re-profits" onclick="window.open(this.href);return false;

We think consensus needs to adjust down further for 2015/2016 – our full year 2015 estimated £431m operating profit post transformation costs sits around 8% below company consensus.

[Midge]

If anyone is under the illusion that a rising share price is good news for posties on the shop floor, then take a look at how Goldman Sachs sees Royal Mail increasing its profits in coming years:

http://www.theguardian.com/business/mar ... y-buy-note" onclick="window.open(this.href);return false;

Staff costs (our jobs, wages and terms and conditions) are 60% of Royal Mail's total costs, compared to just 45% in other postal companies. Apparently, "bringing this down to the average of other postals could result in as much as £1.3bn of savings".

A rising share price comes from raising profits, by reducing 'costs' for private investors. In other words fewer jobs, lower wages, and worse terms and conditions.

[Lincox]

You forgot about a crap service for customers. Happy customers generate profits for us, and this will only happen when they can buy services that they need and understand and at a price they can afford. Reducing staff to a minimum and providing them with poor working conditions and pay will create a race to the bottom and may prove terminal for this company.

[k979aaa]

Nice too see and end of bullying and harassment in all delivery offices and chaotic lapsing as well as a bonus scheme for all even if we do not get paid overtime well our union need to do their homework I can see thousands leaving at this rate of involvement everyone for themselves not one for all and all for one!