February 7, 2020 / 6:44 PM / 12 days ago

Royal Mail proposes three-year pay deal to union

(Reuters) - Britain’s Royal Mail (RMG.L) has proposed a three-year pay deal to the Communication Workers Union (CWU) and wants to have detailed talks with its largest union, the company said on Twitter on Friday.

FILE PHOTO: A Royal Mail postal worker stands in the yard of a sorting office in Altrincham, Britain October 12, 2017. REUTERS/Phil Noble/File Photo

The company, which was dogged by the threat of strike action over the Christmas period, had said on Thursday that the CWU was preparing another strike ballot.

“We have today put forward a proposal to CWU, including a three-year pay deal,” Royal Mail said in Friday’s tweet.

"We want to get into detailed talks about our proposal and what we want from the union for our business," said here the company, which employs about 143,000 people in Britain.

Royal Mail warned on Thursday that it faced a challenging year ahead and could face a loss in its British business because of labor tensions and shrinking letter volumes.

The company’s German chief executive, Rico Back, has said it was vital that he proceeds with a plan to transform the British business into a sustainably profitable operation by 2024.

Royal Mail’s tweet included a video with more details about its proposal to the CWU, including modern tools and better equipment, as well as fairer and more manageable routes.

The company said it would not be able to reduce the working week by an hour, saying every hour reduced would cost the former postal monopoly 100 million pounds ($129 million).

“We want to enter talks with CWU and reach an agreement”, Shane O’Riordain, managing director of regulation and public affairs at Royal Mail, said in an email statement.

The CWU rebuffed Royal Mail’s proposal on Twitter.

"Rather than try and negotiate with our members via actors and actresses it would be great if you stopped moving ahead with unagreed changes and sat down seriously with the union," it tweeted here

Last May, the chief executive pledged to invest 1.8 billion pounds in a five-year turnaround plan to refashion Royal Mail into an international parcel-led business that can profit from a future dominated by e-commerce.

The CWU did not immediately respond to a request for additional comments.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Edmund Blair and Susan Fenton

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