The Communication Workers Union (CWU), which represents Royal Mail staff, had at one point threatened to strike after talks faltered.
“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,” Royal Mail said in a statement.
The threat of industrial action formed part of the backdrop to the company’s high-profile privatisation, which was much opposed by the CWU but eventually pushed through in October.
Details of the proposed agreement, subject to approval by a vote by CWU members and the board of the company, will be released following ratification by the union’s executive committee.
Shares in Royal Mail, which have gained 79 per cent since its listing, closed up 1.8 per cent at 590.5p.