UK postal operator Royal Mail has announced it has reached an agreement with the Communication Workers Union (CWU) on the deployment reforms to its universal service obligation (USO) and will begin piloting the changes at 240 delivery offices in the coming weeks.
The agreement includes a pay rise and a series of enhanced terms and conditions for delivery and processing CWU-grade staff that joined on or after December 1, 2022.
The CWU will shortly issue a consultative ballot, after which the USO reforms will be rolled out across Royal Mail’s 1,200 delivery offices and this is expected to be complete by December 2026. The new delivery model, developed with the CWU, incorporates a range of learnings from 35 offices which began piloting the changes last year.
Previously the USO required Royal Mail to deliver First Class and Second Class letters six days a week, Monday to Saturday. Letter volumes have declined from 20 billion a year at their peak in 2004-05 to 6.3 billion a year in 2024-25 and the average household now receives only four letters a week, down from 14. Ofcom made changes to the postal regulations in July 2025 to ensure the universal service remains sustainable, affordable and reliable.
Staff agreements
In addition to the agreement on the rollout of USO reform, Royal Mail and the CWU have agreed a pay rise and enhanced terms and conditions for new entrants who joined Royal Mail on or after December 1, 2022 including:
- A 4.75% pay rise backdated to April 1, 2026. CWU-grade colleagues on legacy contracts will receive a 3% pay increase, in line with the April 2025 three-year pay agreement.
- From June 1, 2026, all new entrant contracts for people joining the company will be based on a standard working week of 37 hours.
- As part of universal service change deployment, around 6,000 part-time posties will be able to increase their average weekly hours if they choose to and there is a business need.
Royal Mail and the CWU have also agreed to invest in several people-focused initiatives which will benefit frontline staff financially and support their development. These include a new delivery site incentive scheme to reward colleagues when their site exceeds agreed performance targets, alongside launching a new way to help people build their skills and open more opportunities to grow their career at Royal Mail.
Alistair Cochrane, chief executive officer, Royal Mail, said, “This agreement with the CWU paves the way for universal service reform rollout and represents a significant investment in our people.
“Moving ahead with reform will make a real difference to Royal Mail’s quality of service, supporting the delivery of a reliable, efficient and financially sustainable postal service for our customers across the UK.”
PPTI has approached CWU for comment.
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