Royal Mail and union reach pay deal

A proposed deal has been agreed between the Royal Mail and union leaders on pay, pensions and other issues linked to the privatisation of the postal group.

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The Communication Workers Union had been threatening industrial action, but held off calling strikes so talks could be held

A proposed deal has been agreed between the Royal Mail and union leaders on pay, pensions and other issues linked to the privatisation of the postal group.

The Communication Workers Union had been threatening industrial action, but held off calling strikes so talks could be held.

After "extensive" negotiations, the two sides announced that a proposed agreement had been reached.

A union statement said: "The proposed agreement will now be considered by the union's postal executive over the next few days and will ultimately be subject to a ballot of the union's members.

"During the ratification process, the industrial action ballot remains valid.

"Details of the proposed agreement will be made available following the conclusion of the meeting of the union's postal executive."

In a statement to the Stock Market, Royal Mail said an agreement had been made in principle with the CWU on pay, legal protections, industrial stability and pensions.

"Royal Mail and the CWU have agreed that the union's ballot for industrial action remains valid. However, the CWU has confirmed that there will be no disruption through industrial action during the ratification process of the proposed agreement, including the whole of the Christmas trading period.

"An announcement on the content of the proposed agreement will be made when it is ratified by the union's executive committee. The proposed agreement is also subject to approval by the Royal Mail plc board."

Chris Combemale, executive director of the Direct Marketing Association, said: " This is welcome news for the tens of thousands of companies, charities and people that depend on the postal service every day.

"The UK economy is only just emerging from recession and we cannot afford any further impediment to its recovery, especially at this time of year. The build-up to Christmas is a critical period that typically accounts for a significant proportion of businesses' annual revenues and charities' donations.

"Commercial users account for the biggest portion of Royal Mail's turnover. Any disruption to service would have led businesses to take their custom elsewhere, which is an outcome that would not benefit the postal workers that CWU represents."