Royal Mail talks deliver "substantial progress" with hopes raised of Friday breakthrough announcement

 
Oliver Gill
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Royal Mail had planned a 48-hour strike in mid-October (Source: Royal Mail)

Royal Mail pension and pay talks have delivered "substantial progress" across all four critical points, with its main union preparing a major announcement outside the negotiating room on Friday.

Hopes will be raised a deal has been struck over a bitter year-long dispute.

The Communication Workers Union (CWU) has been locked in top-secret discussions with top execs from Royal Mail since October, in the latest round of talks to avert Britain's first post-privatisation postal strike.

"Today we were advised by the National Officers that substantial progress has been made," the CWU London Division posted on social media last night.

The CWU said a full update would be delivered on Friday by deputy general secretary Terry Pullinger, who has been leading talks on behalf of 110,000 postal workers. Sources added the update will be made on the steps outside of the central London location of the talks.

Both sides returned to the negotiating table after a legal ruling prevented the CWU from holding 48-hour walkout. Mood music from the talks, at first chaired by an external mediator, has become increasingly positive.

Last week, the CWU said confidence was growing an agreement across "all issues" can be made.

Read more: Royal Mail is held back by out-of-date red tape

The union has campaigned against sweeping changes to working conditions and the closure of the firm's final salary pension scheme.

At the heart of worker unrest is a decision by Royal Mail last January to shut its mammoth final salary pension scheme. The FTSE 250 firm believes it will cost more than £1bn annually to keep it open.

The CWU surprised Royal Mail in its response. Instead of immediately balloting for strikes the CWU proposed a new scheme backed by its own advisers. However, the counter-proposal was rejected by Royal Mail and talks over the summer broke down.

The latest mediated proposals agree to shut the final salary scheme in its current guise, replacing it with a "defined benefit cash balance" alternative. This means pension payouts would be partly dependent on investment returns with a minimum amount underwritten by Royal Mail.

The firm's pension is one of the "four pillars" under dispute. The other three are pay and the working week, delivery times and changes to working culture.

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