Royal Mail has agreed what unions have called a “landmark” deal to settle a long-running dispute over pay and conditions.
Union members will vote on a 2.7% pay increase for this year, a 1% increase next year and a shorter working week.
The Communication Workers Union called it an “excellent” deal, marking the end of an “adversarial” two-year dispute.
Under the agreement, Royal Mail will be able to prioritise its fast-growing parcels for investment.
It will also allow Royal Mail to modernise the business with investment in more automation. This will include replacing the handwritten signing-in sheets at sorting sites with swipe-and-scan technology.
Royal Mail’s interim executive chairman Keith Williams said: “We have a window of opportunity to focus Royal Mail on what our customers want today – an ever-growing need for more parcels, whilst providing a sustainable letters service.
“This agreement provides a framework to do just that, but the proof will be in the pudding. We have been far too slow to adapt in the past and now need to deliver change much more quickly.”
The restructuring plan was proposed by Royal Mail’s former chief executive, Rico Black. Union resistance to the overhaul contributed to Mr Black’s resignation in May.
“This agreement marks the end of our two year dispute with Royal Mail Group and brings closure to one of the most adversarial periods of our history,” CWU said.
The union added that the circumstances brought on by the COVID-19 pandemic have “massively advanced the change anticipated in our previous agreements in parcel growth”.
Royal Mail’s revenue in the eight months to November was £380m higher, thanks to growth in parcel demand.
On Monday, Royal Mail suspended mail services to mainland Europe. Deliveries to Ireland are unaffected it said.
Parcels it already has will be “held securely” until it can transport them it said.