An end to the bitter postal workers' dispute is in sight after union leaders ratified a deal on pay and modernisation aimed at halting months of disruption to mail deliveries.
Around 130,000 members of the Communication Workers Union will now vote on whether to accept the agreement and break the deadlocked row which has cost the Royal Mail tens of millions of pounds and hit domestic and business customers across the UK.
Business groups and the Government welcomed the breakthrough, although MPs on a select committee examining the dispute reported "anger" among workers at the way management had behaved.
The Royal Mail said the deal involved a 5.4% pay rise over two years, plus 1.5% next year when agreed reforms to the service are delivered.
The retirement age will increase from 60 to 65 and the final salary pension scheme will close to new members from January, to be replaced with a defined contribution scheme. Pension pots built up before next April will be protected.
Royal Mail said there will be full co-operation on the deployment of new technology, while staff will cover for one another within a unit to help absorb a colleague's absence or an increase in workload.
Chief Executive Adam Crozier said: "All along we have been clear that to become competitive we needed flexibility to modernise and we needed to reform our pension scheme because the costs were crippling the company.
"This deal, which is within the parameters we clearly set for pay this year, gives Royal Mail a fighting chance of success in the future."
CWU deputy general secretary Dave Ward said: "This has been a long dispute but the agreement reflects the fact that change in the company will only be managed with the Union and the workforce. We have made significant gains on pay and related issues and the Union's role in negotiating change in the workplace has been strengthened."
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Business Secretary John Hutton told the Trade and Industry Select Committee the deal was affordable and would help Royal Mail cut costs. He acknowledged the dispute had damaged Royal Mail and lost the firm customers and said he believed industrial action was not justified.
