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The year 2025 has brought significant developments to Royal Mail employees across the UK, particularly regarding salary negotiations and employment terms.
Following the latest update to the National Living Wage, combined with ongoing discussions between Royal Mail and the Communication Workers Union (CWU), employees are experiencing both immediate and long-term changes to their pay and working conditions.
This article explores the key updates in Royal Mail’s pay structure and negotiations that affect its workforce.
What Prompted The Royal Mail Pay Rise In 2025?
The primary reason behind the Royal Mail pay rise in 2025 was the government’s decision to raise the National Living Wage across the UK.
This move required immediate implementation by employers, including Royal Mail and its subsidiary, Royal Mail Property & Facilities Solutions (RMPFSL).
The updated minimum hourly rate is now £12.21, affecting specific roles that previously earned below this threshold.
Employees in the following categories were directly impacted:
- National Cleaners
- Admin and Generic Staff
- Warehouse Operatives
This legally mandated update set the foundation for more extensive discussions regarding fair pay for all Royal Mail employees, not just those in the lower wage bracket.
How Is The Communication Workers Union Involved In The 2025 Pay Deal?
The Communication Workers Union (CWU) has played a central role in advocating for a comprehensive pay structure overhaul.
Since April 2025, the union has been in intensive negotiations with Royal Mail, arguing for a broader increase that encompasses every job grade within RMPFSL, not just those earning close to minimum wage.
Their core priorities include:
- Achieving fairness in salary progression
- Securing long-term commitments from the employer
- Protecting working conditions during periods of change
Over the past three weeks, multiple proposals have been exchanged between the parties, reflecting the complexity of aligning financial realities with employee expectations.
What Does The Broader Pay Claim Mean For Royal Mail Employees?
The broader pay claim aims to go beyond statutory obligations and deliver lasting benefits to all employees, particularly those not covered by the National Living Wage increase.
The CWU’s approach involves pushing for a fairer distribution of wages and eliminating discrepancies among different grades and contracts.
The key areas covered by the pay claim include:
- Equal pay between long-term employees and new entrants
- Review of working hours and entitlement to paid meal breaks
- Opportunities for part-time workers to increase their contracted hours
- Permanent job creation through reduced reliance on agency staff
These elements demonstrate a shift from short-term fixes to structural improvements that benefit the entire workforce.
Why Are Changes To The Universal Service Obligation Important?
The Universal Service Obligation (USO) is a vital commitment that Royal Mail maintains to provide six-day-per-week letter delivery across the UK at a uniform price.
It underpins the company’s identity as a public-facing service. However, the USO is now under review as part of cost-saving and operational streamlining strategies.
Potential USO changes are being discussed, including modifications to delivery frequency and scope. These changes are of particular concern to employees in delivery offices, as they could lead to:
- Fewer delivery routes
- Reduced staffing requirements
- Shifts in workload distribution
CWU’s stance is clear: any amendment to the USO must take into account its impact on jobs and service quality. They are working closely with Royal Mail to ensure the USO continues to protect long-term employment.
How Does The EP Group Takeover Affect Salary Negotiations?
Royal Mail’s acquisition by EP Group, a private investment company, has added a new layer of complexity to the negotiation process.
Since certain decisions must align with EP Group’s future strategies, some elements of the broader pay deal have been temporarily paused until the takeover is finalised.
The transaction is scheduled to complete on 30 May 2025. Until that date:
- Final pay offers cannot be officially approved
- Terms for new contracts remain under conditional review
- Structural employment reforms are being discussed in principle
The CWU is working within these constraints, aiming to deliver an agreement that supports employees while accommodating the future ownership structure.
What Additional Employment Terms Are Under Negotiation?
In addition to pay increases, Royal Mail and the Communication Workers Union (CWU) are negotiating a series of non-salary employment terms that are just as crucial for the long-term well-being and stability of the workforce.
These supplementary elements go beyond wages and delve into areas such as job security, working conditions, employee benefits, and structural employment reforms.
These discussions are driven by employee feedback collected over the last year and are intended to tackle recurring concerns related to fairness, consistency, and support in the workplace.
The CWU has made it clear that any future agreement must be comprehensive, offering value in both financial and non-financial terms.
Below are the key employment terms currently under negotiation in greater detail:
Salary Sacrifice Scheme Adjustments
Salary sacrifice schemes allow employees to trade part of their salary for non-cash benefits such as pensions, childcare, or cycle-to-work plans.
However, with the rise in the National Living Wage, a new complication has arisen: these schemes could unintentionally reduce an employee’s hourly wage below the legal minimum.
To address this, Royal Mail and CWU are working on:
- Ensuring all employees remain above the statutory minimum wage even after deductions
- Redesigning the scheme terms for lower-paid roles
- Offering clearer guidance and calculations for salary adjustments
These updates aim to preserve the benefits of salary sacrifice without jeopardising legal compliance or employee take-home pay.
Equalisation Pathway for New Entrants
One of the most pressing issues is the disparity in terms and conditions between long-serving employees and those recently hired. This two-tier system has led to tension and decreased morale in some departments.
The proposed equalisation pathway includes:
- Aligning hourly pay rates for new and established staff
- Providing equal access to overtime, holiday entitlement, and paid breaks
- A phased implementation plan with the first adjustments occurring within three months of the EP Group takeover
This step is intended to reinforce fairness, close the gap between workers on different contracts, and support a unified workforce culture.
Reduction in Agency Dependence
Royal Mail has historically relied heavily on agency staff, particularly during seasonal demand peaks. However, this practice has created long-term workforce instability and fewer opportunities for part-time or casual workers to secure permanent contracts.
As part of the current negotiations, the CWU has secured an agreement in principle to:
- Significantly reduce the use of external agency workers
- Convert more agency positions into permanent in-house roles
- Prioritise existing part-time staff for expanded hours before hiring externally
This initiative not only improves job security but also enhances workforce consistency and training investment.
Introduction of a Performance Incentive Scheme
To boost productivity and recognise high performance, Royal Mail is planning to introduce a new performance-based incentive scheme. While the concept is not entirely new in corporate structures, it marks a shift in strategy for Royal Mail, which has traditionally relied on standardised pay models.
Key features being discussed include:
- Localised targets based on delivery rates, accuracy, and customer satisfaction
- Monetary bonuses for teams or units that meet or exceed their performance goals
- Transparent metrics to avoid subjectivity or bias in rewards distribution
This model is designed to promote teamwork, reward excellence, and encourage a results-driven culture without compromising work-life balance.
Sick Pay Improvements
The existing sick pay framework varies significantly across different employee grades and contracts. While some workers receive enhanced company sick pay, others are limited to statutory sick pay, which can be financially challenging during longer absences.
Improvements under negotiation aim to:
- Standardise sick pay entitlements across all job grades
- Increase the duration and amount paid under the company’s own sick pay scheme
- Provide additional mental health leave days as part of overall wellbeing efforts
A stronger sick pay policy is expected to support employee health, reduce presenteeism, and promote responsible time off for recovery.
Supporting a More Positive Workplace Culture
Alongside financial and structural changes, the CWU and Royal Mail are also collaborating on improving internal work culture. One major concern raised by employees in recent years is the punitive nature of performance reviews and disciplinary measures.
As a response, negotiations are focusing on:
- Creating a more constructive approach to performance management
- Emphasising coaching and mentorship over penalties
- Enhancing training for managers to support their teams more effectively
- Promoting dignity and respect in the workplace through updated behavioural policies
This cultural shift is viewed as essential to ending the so-called “chaos culture” reported in several operational units.
Why Have Previous Pay Offers Been Rejected Despite Being Above Inflation?
Despite Royal Mail presenting three different pay offers that exceed the current inflation rate, each of these offers has been rejected by CWU negotiators. The reason lies not in the numerical value of the raise but in the surrounding terms and conditions.
CWU’s primary concerns include:
- No definitive timeline for equalising pay structures
- Inadequate improvement in contract terms for new starters
- Lack of progress on agency reduction commitments
- Absence of meaningful changes to working hours and overtime pay
The union has made it clear that a successful agreement cannot rely on financial compensation alone. It must also address fairness, long-term growth, and job security.
What Are The Next Steps In Reaching A Pay Agreement?
Both Royal Mail and the CWU agree that the current negotiation cycle must reach a conclusion soon, especially with the EP Group acquisition nearing finalisation. The next few weeks will see heightened activity as both parties work to agree on outstanding issues.
Here’s what the next steps involve:
- A final round of negotiations scheduled before the end of May
- Continued internal communication between CWU reps and members
- Union-led engagement sessions to gauge member feedback
- Finalisation of terms aligned with post-acquisition leadership
With both sides expressing a shared goal of stability and growth, there is cautious optimism that a resolution will be reached on time.
What Does The Royal Mail Pay Structure Look Like In 2025?
To better understand the scope of the pay changes, the table below shows hourly rate comparisons before and after the 2025 update, highlighting roles already affected by the National Living Wage and those still under negotiation.
| Job Role | Previous Hourly Rate | New Hourly Rate (2025) | Status |
| National Cleaner | £11.44 | £12.21 | Implemented |
| Admin and Generic Staff | £11.60 | £12.21 | Implemented |
| Warehouse Operative | £11.50 | £12.21 | Implemented |
| Delivery Operative | £13.00 | Pending Review | Under Negotiation |
| Parcel Sorter (Night Shift) | £13.20 | Pending Adjustment | Under Negotiation |
| Part-Time Sorting Assistant | £12.00 | Pending Equalisation | Under Negotiation |
A second layer of negotiation involves working hours, meal breaks, and overtime eligibility. The following table outlines proposed terms that complement the pay structure updates.
| Benefit Area | Current Provision | Proposed Update |
| Paid Meal Breaks | Unpaid | 30–45 minutes paid (proposed) |
| Overtime Rate | Fixed at base hourly rate | Higher multiplier during peak hours |
| Weekly Working Hours | 40 hours (standard) | Reduction for new entrants (proposed) |
| Sick Pay Coverage | Statutory Only (some roles) | Enhanced company scheme |
These proposed adjustments aim to modernise Royal Mail’s employment terms and provide fairer conditions across all employee groups.
FAQs about Royal Mail Pay Rise 2025
How much is the National Living Wage in 2025 for Royal Mail employees?
The updated rate is £12.21 per hour for qualifying roles, as mandated by UK law.
Who qualifies for the Royal Mail pay increase in 2025?
All employees earning below the National Living Wage automatically qualified, with additional increases under negotiation for other grades.
Is the CWU still in negotiations with Royal Mail?
Yes, ongoing discussions are taking place, aiming to finalise a deal before the EP Group acquisition on 30 May 2025.
Will part-time workers benefit from the pay rise?
Yes, part-time employees are included in both the National Living Wage update and the broader pay claims being negotiated.
What is the impact of the EP takeover on employee benefits?
The EP acquisition has delayed some negotiations but is also expected to bring structural changes to employment terms.
How does the new pay agreement support job security?
Key focuses include reducing reliance on agency workers, equalising contracts, and introducing incentives to retain talent.
Are there changes in overtime or performance incentives?
Yes, both are being reviewed as part of broader discussions, including new incentive models based on local targets.