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Last Updated: Monday, 22 October 2007, 16:24 GMT 17:24 UK
Union endorses mail dispute deal
Postbox and van
There have been a number of UK postal strikes in recent weeks
Postal union leaders have endorsed a deal aimed at ending a bitter dispute with the Royal Mail over pay and flexible working conditions.

The Communication Workers Union (CWU) said the agreement would now be subject to a ballot by its 130,000 members.

It offers staff a 5.4% rise in pay and weekday overtime from 1 October, and an extra 1.5% pay hike from next April - conditional on reforms being delivered.

Royal Mail said the deal gave it a "fighting chance" of future success.

'Settling the dispute'

The firm said the agreement - which brings a summer of costly industrial unrest closer to an end - would enable it to proceed with the modernisation of its operations.

We have been clear that to become competitive we needed flexibility to modernise
Royal Mail chief executive Adam Crozier

The CWU deliberated for a week before agreeing to back the deal and the BBC's John Moylan said some of the language in the agreement might worry some workers.

The deal includes a one-off payment to workers of 175 and a commitment to close the final salary pension scheme to new members in February and to existing members in April.

From April 2010, the normal retirement age for workers will be extended from 60 to 65 but existing staff will still be able to claim pensions benefits built up before that date at 60.

The CWU said the agreement "settles all areas of the dispute" and would now be subject to a ballot of union members.

Royal Mail said the agreement would allow it to enforce more flexible working patterns and use new technology more efficiently.

"All along we have been clear that to become competitive we needed flexibility to modernise and we needed to reform our pension scheme because the costs were crippling the company," said chief executive Adam Crozier.

KEY POINTS OF THE DEAL
5.4% rise in pay and weekday overtime from 1 October
1.5% rise in pay in April on delivery of agreed reforms
One-off 175 payment for staff
Final salary pension scheme to close to new members next January and to existing members next April

A series of strikes have disrupted mail deliveries across the UK since the summer.

Industrial action intensified earlier this month, with two 48-hour nationwide strikes followed by unofficial stoppages in Liverpool and Yorkshire crippling services.

"This is a good deal for customers and the taxpayer," said Business Secretary John Hutton.

"It will ensure the Royal Mail can continue to modernise and provide services customers want in a competitive market."

Ballot

Throughout the dispute, the CWU had previously said that the Royal Mail's modernisation plans would cost 40,000 jobs.

Royal Mail insisted it needed to modernise to survive as a business in the highly competitive mail industry, while union leaders argued that its plans had no regard for its employees.

Areas under dispute have included pay and pensions, with the CWU saying a pay rise came with unacceptable strings attached, and the Royal Mail wanting to scrap its final salary pension scheme and raise the retirement age.

Some working practices were also under dispute, such as workers being allowed to go home before their shift has ended if they have completed their designated workload.



SEE ALSO
Talks to continue in mail dispute
19 Oct 07 |  Business
Mail dispute staff back at work
18 Oct 07 |  Bradford
Latest postal strike called off
16 Oct 07 |  Business
Postal union urged to accept deal
14 Oct 07 |  Business
Royal Mail and union reach deal
13 Oct 07 |  Business
Q&A: Postal strike and you
04 Oct 07 |  Business

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