Royal Mail Pay / Pensions / Shorter Working Week negotiations update. 29.03.17.

Please take a couple of minutes to read what’s at stake in the current pay talks. I think it’s fair to say that our terms and conditions are under attack like never before. Whether we protect what we currently have and indeed manage to enhance them will depend on you giving your support to your Union in the coming months.
Royal Mail Pay / Pensions / Shorter Working Week negotiations update. 29.03.17.


Terry Pullinger (DGSP – Deputy General Secretary Postal) opened the briefing indicating that we should recognise that this was the start of negotiations and as such positions will change going forward. It was also stated that all the elements of Royal Mail’s wish list have been mentioned by Royal Mail in discussion in some form in the last couple of months and these would be on their agenda at some point.

He also said, the 4 Pillars of Security (CWU Proposals) is the Union taking the issues to the employer and with the onset of the digital world & competition waiting until 2019 will be too late. Also, by submitting our proposals, has drawn the employers position out on all matters relating to our future employment in Royal Mail.

Terry also stated the current thinking of management is shocking in relation to the discussions and that Royal Mail are intent on maintaining profit levels to pay the shareholders through the same old post-privatisation thinking of reducing employee headcount & attacking our terms & conditions which also includes our pensions.

A number of slides were used for the presentation and below are elements of these:

Royal Mail’s pay discussions agenda (what Royal Mail want);

Improve financial efficiency by 2-3% 

New structure to starters and new employee’s pay (see ‘A’ below) 

Removal of old outdated legacy payments (see ‘B’ below) 

Removal of duplication of pay, such as election payments 

Move to monthly pay 

Restructure the Xmas payment to provide incentive to deliver Xmas 

Restructure the MTSF Agreement (all worse terms – pay protection, etc.) 

Review both RRIS & TPM 

Increase the emphasis on professionalising our Agreements through simplification & removal of duplication 

A new process around trials / pilots (see “C” below) 

More effective ways of dealing with attendance warnings & dismissals (see “D” below) 

Realigning the IR Framework to fit the business network towards change at pace 

Seek to trial ways of removing the need for absorption lapsing (CWU agree this in principle) 

Develop an overall approach to data & technology 

Trial different approaches to a new employee proposition 

Delivery of the current activity intended to support & underpin an improving business 

A – New structure to starters and new employee’s pay

The following to be applied to all grades (OPGs, engineers, etc.)

Recruitment rate reduced from the present 90% to 80% of the hourly rate

Mid-point pay rate reduced from the present 95% to 90% of the hourly rate

Mid pay point increased from the present 6 months to 18 months

Maximum pay rate after 3 years – currently 1 year

Monthly pay

Sick pay – first 3 days unpaid

– Year 1, SSP only

– Year 2, 4 weeks full & 4 weeks half pay

– Year 3, 6 weeks full & 6 weeks half pay

– Year 4 ongoing, 8 weeks full & 8 weeks half pay

7 day working – no premiums for weekend working

A single overtime rate including any contractual overtime (S/A)

Holiday entry entitlement 20 days (22.5 days at present), after 5 years 23.5 (as now)

Movement to different shifts to cover peak periods (total flexibility)

London weighting only (where relevant). No other allowance or supplement (e.g. function payments)

B – Removal of old outdated legacy payments

2000 Driver’s allowance

2000 PHG allowance

PBS / ICS bonus

Time bonus

Road Network Scheme

2007 early shift protection

2007 Way Forward protection

LA1 Supplement

Pay Protection

Network 2007

Reserved Rights Night shift (both higher PHG rate & protected pensionable pay)

LGV allowance

C – A new process around trials / pilots

Currently any trial or pilot that is introduced, does so on the basis of adhering to safeguards built into a Terms of Reference or Agreement that ensures the following; controlled implementation, timeframe for the trial / pilot, joint (RM & CWU) input, joint evaluation and jointly agreeing the outputs from these initiatives.

Royal Mail want to remove all of these safeguards & CWU involvement below national level. They want to introduce initiatives that will only be trialled for a maximum of 90 days and at the end of this period, if Royal Mail think they are warranted, roll out the changes nationally. No discussions or negotiations with your Union – Royal Mail will introduce new ways of working as and when they see fit.

D – More effective ways of dealing with attendance warnings & dismissals

Royal Mail want to do away with the current process, whereby members are entitled to representation at all stages of the Attendance Procedure. Royal Mail want to introduce a much harsher approach – all reviews which are triggered will be automatically issued (some say they are already). This means that there will be no point in the procedure where mitigation will be taken into account.

Following Terry’s presentation, a number of presentations were given by National Officers of the Union – these were by Ray Ellis (Assistant Secretary Postal), Davie Robertson (Assistant Secretary Processing / Logistics) & Mark Baulch (Assistant Secretary Elect Outdoor).

Ray Ellis gave a presentation on what Royal Mail want as part of the negotiations, also the CWUs points for negotiation. These points are below;

Royal Mail’s points 

Simplification of agreements (CWU agree this) 

Trials (as identified above) 

IR Framework – Royal Mail want to remove all CWU Area Representatives. This would mean that all issues would be raised at local level and then progressed directly to national level – obviously, the support structure of the Area Reps would be lost for good if we allow this. It is crystal clear why Royal Mail want to dispose of the Area Rep position – these are the Reps that support the local Reps, ensure agreements are adhered too, challenge the bullying & intimidation tactics of managers and continually cause Royal Mail most problems. 

Compliance of agreements (CWU agree this and it was pointed out that it would be good if managers would follow this mantra locally) 


MTSF (as identified above) 

Attendance (as identified above) 

CWU’s points 

Expansion of legal protections in the Agenda for Growth 

Annual Leave

Effects on Royal Mail functions (Delivery, Processing & Logistics)

Both Mark Baulch & Davie Robertson reiterated points which have been made in previous communications. In that the ‘re-design of the pipeline’ in Royal Mail’s terms meant that everything moved back timewise by a number of hours.

What Royal Mail want is a later LAT (latest acceptance time) for collected mail. Royal Mail see this as an integral part of dealing with competition, by getting into the emerging market of rapid / next day delivery of items ordered online.

However, should the LAT be pushed back this will have a negative impact on all functions; Processing – duty attendance patterns, start & finish times would potentially change by several hours. Logistics / Distribution – duty attendance patterns, start & finish times would potentially change by several hours. Additionally, there would be the need for less vehicles and therefore drivers. Delivery – duty attendance patterns, start & finish times would potentially change by several hours, with probable last letter delivery times in towns & city’s being around 5pm.

It was also indicated that in delivery, Royal Mail want to introduce ‘self-managed groups’. In essence, what this means is that deliveries will be grouped together. Where members of these groups go on annual or sick leave, this group will perform the delivery between themselves. These groups will take ownership of all work requirements for these grouped deliveries. For those of you who have been in Royal Mail for some time and prior to 1996, this may sound familiar – Royal Mail tried to introduce, as it was known at the time ‘Team-working’ during 1996 and formed part of the Employee Agenda dispute. Obviously, this was defeated, however what it does show, is that Royal Mail are devoid of new ways of thinking and revert to old style thinking and methods.

Pay & SWW (Shorter Working Week)

Additional to all the above, Royal Mail have said that the introduction of any element of a SWW (Shorting Working Week) and / or pay increase must be self-funding. In other words – we have to give up something to get something.


It is important to recognise that the CWUs pension proposals are for ALL Royal Mail employees represented by the CWU, no matter if you’ve been employed 1 week, 1 year, 10, 20 or 30 years and above. It is the CWUs belief we should all be treated the same and we should all have the opportunity to secure a decent income when we retire.

A presentation on the CWUs pension proposals was given by an independent actuary – Hilary Salt (FIA). She has been employed by the CWU as an advisor on the pension’s issue. The presentation used several slides which were full of facts and figures and highlighted the problems Royal Mail will face funding the pension schemes going forward. In short – Royal Mail’s current pension contribution is approximately 17% of pensionable pay, we pay 6%. Royal Mail actually currently pay approximately 30% (£400m per year), however, the difference (13%) is paid for from the current surplus in the pension fund’s assets (pension fund surpluses can’t legally be kept in those schemes as surpluses – they can however be used to offset employers contributions, as Royal Mail are doing at present).

It is anticipated this surplus will run out sometime in 2018 and after the revaluation (every three years this is done and employers contributions are based on this valuation) of the scheme around that time, Royal Mail’s contributions will rise to over £1b per year – clearly this is not going to be affordable.

At present, there are several types of pension schemes in Royal Mail based on differing criteria, these are;

Defined Benefits – pre-2008 (DB – you know what you’re going to get as a pension) and Royal Mail takes all the risk in maintaining the pension fund. 

Defined Contribution – 2008 onwards (you know what you’re going to pay, but you won’t know what you’re going to get until you retire). Pension scheme members (us) also take all the risk in maintaining the pension fund.

The Defined Benefit scheme is far superior to the Defined Contribution scheme as it gives you better knowledge of what to expect in retirement. By contrast, the Defined Contribution scheme doesn’t allow you to plan ahead as you don’t know what your pension benefits will be until you retire. Incidentally, these will be far lower than what you would receive from a Defined Benefit scheme.

The CWUs proposals (legally based on a Defined Benefits scheme) removes some of the risk from Royal Mail and places it on to the pension scheme members. However, how this works is that the fund will be valued annually (not 3 years as at present) and if the fund performs well then pension benefits are increased by the current RPI figure (it’s currently 3.1% and is generally 1% above CPI annual figures) or if the scheme is in surplus the benefits could be above RPI. Should the scheme not perform so well, then any increase could be RPI minus a percentage or even no increase at all – and this is the risk element placed onto the scheme members. The scheme assets remain relatively constant and Royal Mails contributions will remain around the current 17% figure of pensionable pay – Royal Mail can afford to pay this amount.

Royal Mail are currently considering these proposals. It is interesting to note though, that other trade unions are watching how these proposals progress as this type of pension scheme may assist other companies facing similar pension issues. Financial institutions such as; The Financial Times, etc. are also watching how this develops, indeed many have looked at and spoken favourably about the CWUs proposed changes, with a small number giving a negative view – namely Union bashing entities.

I’m sure you’ll all agree that the pension’s issue is a very complicated matter indeed and to quote and print all the facts & figures and to try to make sense of them in this report would be very difficult to do – on this note, we believe it is better to wait for a simple explanation to be constructed which states all the facts & figures and then this can be reported to you. Hopefully though, the above will give you an insight into the complexities of the pension schemes and the CWUs proposals.

In closing, we must also highlight to you the disingenuous ways Royal Mail carry out their discussions & negotiations. The CWUs National Officers involved in these processes were informed by Royal Mail that they had spoken to approximately 70,000 of their employees asking what they would want to see from these negotiations – Royal Mail’s ‘wish list’ apparently is a reflection of that feedback!! In this Branch we are not aware of any single individual being spoken to by Royal Mail about what they would want to see from any future pay deal – this is also the position in other Branches around the country. Perhaps it was 70,000 managers that were spoken too??

In is vitally important that the ‘4 Pillars of Security petitions’ sent to each workplace nationally is supported & signed by as many of us as possible so that we can counter-act Royal Mails ludicrous claims.



With thanks to Essex Amal Branch


EJ Orviss

Area Processing Representative


Date 7th April 2017



2 thoughts on “Royal Mail Pay / Pensions / Shorter Working Week negotiations update. 29.03.17.

Add yours

  1. Royal Mail are banging on about how we are the best paid, most holidays, sick pay, etc,etc, there constant bragging about this is very irritating, surely these conditions were put in place by the negotiating of our union, who they now want us to turn our back on!

  2. I have worked for royal mail for 36 yrs am 60 now & it’s hard work now no wonder postal staff are fed up with management we do the donkey work they get the bonuses we don’t I agree with the union 4 pillars let’s go for it a lot to lose vote x

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