By Nick Clark
Downloading PDF. Please wait... Issue 2590

Royal Mail workers deserve more than the new deal

This article is over 4 years, 3 months old
Issue 2590
Workers built the strike vote through gate meetings
Workers built the strike vote through gate meetings (Pic: Guy Smallman)

CWU postal workers’ union leaders and Royal Mail bosses have drawn up a deal to end a long-running dispute that almost led to national strikes.

The full agreement was released to union reps and branches last week. Senior reps were set to meet to discuss the agreement this Tuesday and Wednesday.

It will then be put to members to vote on.

The agreement shows Royal Mail managers have made some big concessions—and backed away from many of the attacks they planned.

Workers voted by almost 90 percent for strikes on a 73.3 percent turnout—smashing the thresholds imposed by the Trade Union Act. They achieved that through an inspirational campaign of mass gate meetings.

In particular, a new pension deal is a big improvement on bosses’ plans to move all Royal Mail workers onto a Defined Contribution (DC) pension scheme.

This would have robbed thousands of pounds from many workers—and left the amount paid out at the mercy of the stock market.

Bosses are now also offering percentage pay increases—and reductions in the working week—where previously they only offered meagre lump sums.

Yet there are problems with the deal. Bosses and union leaders now want to introduce a Collective Defined Contribution (CDC)—also known as a Defined Ambition—pension scheme.This would be an improvement for workers who are already on the DC scheme.

But it is a much riskier scheme for those who began working for Royal Mail before 2008. Currently they’re on a scheme that guarantees a fixed wage in retirement.


How we posted a yes vote - Royal Mail workers discuss their ballot for strikes
How we posted a yes vote – Royal Mail workers discuss their ballot for strikes
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But the agreement says pension payments under the new scheme “represent targets, not hard promises, and can be varied (upwards and downwards) to maintain the cost of the scheme at a fixed level.”

In other words, workers will get a wage in retirement—but the amount isn’t guaranteed.

There are pitfalls with the pay deal too. Union leaders say they have struck a deal worth 12.33 percent covering 2017-2019, when reductions in the working week are factored in. Yet the actual amount of the pay increase is only above inflation in 2017. The rise is 5 percent and to be backdated.

There will be no increase for 2018 and a 2 percent increase in 2019.

These will be coupled with one-hour reductions to the working week in both years.

This means the hourly rate will technically go up. But the amount of money paid into workers’ bank accounts will stay the same—while prices continue to rise.

Workers shouldn’t accept that they have to take worse pensions and pay to protect bosses’ profits.

CWU members have shown they can beat off attacks.

They should reject the agreement—and be prepared for action to win better pay and pension deals for all Royal Mail workers.

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