Royal Mail Group (LON:RMG) has updated investors on its ongoing talks with a labour union, with the postal operator looking to avert a strike in the crucial pre-Christmas period. The FTSE 250 group angered the Communication Workers Union (CWU) earlier this year with its plans to change its defined benefit pension scheme with a cheaper alternative.
Royal Mail’s share price has advanced in London this morning, having added one percent to 425.50p as of 08:42 GMT. The stock is outperforming the broader UK market, with the mid-cap FTSE 250 index currently standing 0.34 percent higher at 19,897.11 points.
CWU talks update
Royal Mail announced in a statement yesterday that it had received a report prepared by Professor Lynette Harris, who had mediated talks between the company and the CWU.
“The mediation process was helpful in bringing Royal Mail and the CWU together to advance the discussions,” the company explained in the statement, adding that mediation had “helped both parties to better understand their respective positions”.
The report recommended the introduction of a collective defined contribution pension scheme with a defined benefit element for all workers. The Telegraph noted in its coverage pf the news that this would provide workers with what the CWU called a ‘wage in retirement scheme’, and differs to earlier proposals by Royal Mail, which offered a choice between either a new defined benefit scheme or a defined contribution scheme.
The parties are also in talks over changes to pay, and the report recommended a 2.6-percent pay hike from next April, including base pay, overtime and allowances, and a further two-percent increase to base pay from April 2018.
Strike still possible
Despite the talks progress, The Telegraph quoted the CWU as cautioning that should momentum in the talks ‘dry up’ or Royal Mail change its position, then it would “not hesitate in giving notice to take industrial action”.