Postal workers and the Royal Mail have agreed a deal to end a long-running dispute over pay and working practices that sparked a series of walkouts last year.

Staff will receive a 6.9 per cent pay rise over three years from 1 April 2010. Over the same period, the working week will be reduced by one hour to 39 hours. In addition, full-time workers will receive extra payments totalling £1,400 for agreeing to planned changes such as the introduction of new machinery and revised working patterns. The payments will be made pro rata to part-time employees.

Members of the Communications Workers Union (CWU) will be balloted on the agreement in the new few weeks.

Under the deal, postal workers will receive a 2 per cent pay increase this year, followed by 1.4 per cent in 2011 and a 3.5 per cent rise in 2012. The deal also keeps at least 75 per cent of workers on a full-time basis, with no forced move for any worker from full time to part time, or vice-versa. Maternity pay will also be improved from 18 to 26 weeks and paternity pay from one to two weeks.

“This agreement allows Royal Mail to get on with its modernisation and will ensure stability for the next three years,” said Adam Crozier, chief executive for the Royal Mail Group.

The CWU said that the deal delivered on major issues that postal workers had fought for. “We have always said that we couldn’t turn away from change. The agreement recognises the reality of automation, competition and the financial challenges facing the company,” said Dave Ward, CWU's deputy general secretary.