Royal Mail offers 16% pay hike to end bitter labour spat

LONDON: Royal Mail Plc proposed a pay deal it said will boost wages by 16% over five years as the UK postal service seeks to end a labour dispute that’s left a restructuring plan in tatters.

The pitch to the Communication Workers Union is affordable only if it allows the stabilisation of a shrinking letter-carrying business and expansion of parcels activities, the company said Thursday.

“We hope to convince the union to support us,” Shane O’Riordain, managing director of regulation, corporate affairs and marketing, said in a statement.

“We need to change more quickly than before.”

A representative of the union couldn’t be reached for immediate comment.

Royal Mail, which traces its history back more than 500 years, warned earlier this month that its UK delivery business could lose money in the year starting in March.

The company is in a pitched battle with workers that marred the usually lucrative Christmas and New Year holiday season.

The stock traded 5.5% higher at 183.85 pence as of 4.01pm in London, reducing the decline this year to 19%.

The company reiterated a commitment to avoiding compulsory job cuts among front-line staff and ruled out measures such as outsourcing and zero-hours contracts, saying it “will not become a gig-economy employer”.

Victorian sorting

At the same time, its revamp includes £1.8 billion of UK investment, partly in three new automated parcel hubs aimed at reducing the company’s reliance on a hand-sorting, little changed from Victorian times.

A second daily van delivery will be introduced with 7,000 dedicated routes to meet demand from “night-owl shopping”, Royal Mail has said.

The number of daily walk deliveries will be cut by 8,000, reflecting the slump in letter volumes.

The pay offer includes a 6%, three-year deal for CWU-grade employees. The increase, including the first hour of a shorter working week, equates to a 16% rise between April 2018 and March 2023, it said.