Trade unions announcement

You will have seen Monday’s announcement that the Government has accepted the legally binding undertakings from EP Group put forward by the Board of IDS plc as part of the potential acquisition by EP Group, and further extended these in certain areas. You can find the communications we issued containing a summary of what undertakings have been agreed here.

This is an important milestone in the takeover process, which remains on track to complete in the first quarter of 2025.

On Monday, EP Group also announced it had reached agreements with our trade unions Unite CMA and the Communication Workers Union (CWU) on principles for future ways of working and USO reform.

These agreements in principle have now been ratified by both trade unions and the key details are in the announcement here and summarised below. These agreements cover areas such as:

• How both trade unions will continue to engage with Royal Mail post-acquisition
• How we will work together to secure reforms to the USO that work for our colleagues, customers and company
• A series of topics where Royal Mail management will negotiate with the CWU and Unite CMA over the coming months to conclude a way forward.

What happens next?

These agreements are subject to successful completion of the acquisition.

Now that the principles have been agreed we have a framework for future discussions between Royal Mail management and our trade unions following completion of the acquisition. We will keep you all updated as these progress.  

What has been agreed with our trade unions?

Agreements with both unions

• Mutual commitment to work together to secure reforms to the USO that works for our colleagues, customers and company.
• Commitments to no compulsory redundancies until the full deployment of agreed USO reform.
• The establishment of a ‘Employee Collective Benefit Trust’. 10% of any dividend paid to the EP Group from operating profit generated by Royal Mail will be to distribute colleagues on terms to be agreed. This extends the employee profit share scheme that is already in place (as agreed in the Business Recovery, Transformation and Growth Agreement).
• Creation of a monthly Advisory Committee to provide a forum for both trade unions to provide views on key business matters requiring approval by the Board. Final decisions and overall responsibility remain with the Royal Mail Board of Directors.

Unite CMA

• Continued recognition of Unite CMA as a trade union.
• Honouring of existing Unite CMA agreements.
• Agreement to work together on growth, improving service quality, addressing market challenges and ensuring protection of fair terms and conditions for Unite CMA members.
• Commitment to continuing the existing Short Term Incentive Plan (STIP).
• Commitment to explore options for longer term incentives and an ‘Approaching Retirement’ policy.

CWU

• Continued recognition of CWU as a trade union and honouring of existing CWU agreements, including the ongoing implementation of the Business Recovery, Transformation and Growth Agreement.
• Commitment to review existing voluntary redundancy terms, sick pay arrangements and overtime/scheduled attendance rates.
• Commitment to explore a new career path for new entrant employees to see how we might harmonise their pay and terms and conditions over time.
• Confirmation that any pension surplus from the CARE and Cash Balance schemes will be split between investment into Royal Mail and for the benefit of employees, subject to the agreement of the Pension Trustees.
• Commitment to introduce an employee incentive scheme linked to local performance measures and to conduct a joint Royal Mail-CWU review of existing efficiency and productivity measures and targets.
• CWU and Royal Mail management to commence discussions about the 2025 pay deal as planned. 

We must remain focused

These agreements in principle bring the acquisition and the prospect of Universal Service reform one step closer. It signals important trade union support and enables us to put our energy behind returning Royal Mail to profitability, ensuring our business is fit for the future.

Thank you for your continued dedication and commitment to not only delivering a great Peak for us and our customers, but also for staying focused on delivering our Back in the Black priorities, ensuring we are set up brilliantly for an even better 2025.

Where can I get more information?

EP Group’s announcement on the Agreements on principles for future working with our trade unions, and all documents and communications relating to EP Group's offer to acquire IDS, can be found at: Recommended Offer for IDS plc by EP UK Bidco Limited

 If you have questions or would like to clarify how to accept the offer, please contact the Shareholder Helpline on +44 (0) 333 207 6505.