CWU deputy general secretary Dave Ward said the agreement, which includes a 9% pay offer over three years, had broken new ground in the UK by incorporating extensive legally binding protections for employees alongside a commitment to improve industrial stability. 

“The legal protections for Royal Mail employees come hard on the heels of the privatisation of the company and are unprecedented in delivering the strongest protections for employees,” he added. 

“This is a good deal for the company and customers as well as for employees, but investors should be clear that this agreement commits them to growth and there will be no tolerance of a race to the bottom on services and jobs.”

The three-year pay offer includes a 3% pay rise for 2013/14 backdated to April this year, followed by 3% and 2.8% pay rises in 2014 and 2015 respectively. 

Additionally, a one-off pensionable £200 lump sum (pro-rata for part time staff) will be paid this month to all employees that were in post on 1 October this year, “in recognition of business progress”, while a new employee incentive scheme is to be developed and implemented from April 2014. 

The employee protections include: no zero-hours contracts; the maintenance of existing terms and conditions of employment; a commitment to retain a predominantly full-time workforce; no additional franchising or outsourcing; and an objective to continue to manage change without recourse to compulsory redundancy.

Meanwhile a new industrial stability framework includes the re-launch of industrial relations arrangements and the introduction of mediation procedures alongside new governance arrangements, designed to resolve disputes in a far shorter timescale. 

However, at the time of writing, the CWU was unable to clarify whether the agreement also included the issue of competition from downstream access (DSA) providers.

The agreement, which was proposed last week and formally backed by the CWU yesterday evening, follows months of intensive talks between the two parties.

The dispute began when the former pay deal for postal workers came to an end in March, with both sides failing to reach an agreement on a new contract. It escalated, with threats of industrial action, in the second half of this year as developments progressed towards privatisation of Royal Mail. 

The CWU will now recommend that postal staff accept the new agreement, with union members due to vote on it in a postal ballot set for January 2014.