Royal Mail is poised to scrap Saturday second-class letter deliveries across the UK by December, having reached an agreement with the staff trade union on the nationwide implementation of the changes.

This significant overhaul, which will see second-class post no longer delivered on Saturdays and the service adjusted to every other weekday, brings an end to a lengthy dispute with unions. The reforms will initially extend to 240 delivery offices as part of a wider trial, before being fully implemented across the entire 1,200-strong UK network by the end of the year.

The deal struck with the Communications Workers Union (CWU) includes a 4.75% pay rise for staff, alongside improved terms for those who joined Royal Mail on or after 1 December 2022. Employees on legacy contracts will receive a 3% salary increase. Additionally, Royal Mail has agreed that new starters will be offered contracts based on standard 37-hour working weeks, and around 6,000 part-time postal workers will have the option to increase their average weekly hours as part of the changes.

CWU members are now set to be consulted on the agreement.

Alistair Cochrane, chief executive of 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.”

Regulator Ofcom last year gave the green light to Royal Mail’s plans to scale back second class letter deliveries, starting from July 28.

It launched the changes across 35 delivery offices as a pilot, but has yet to expand this nationwide due to a disagreement with the union.

It kicked off intensive talks with the CWU at the beginning of February to resolve the dispute.

Under the Universal Service Obligation, Royal Mail must keep Monday to Saturday deliveries for first class post and maintain the target for second class letters to arrive within three working days.

The group has argued the changes to second class deliveries are crucial to helping it maintain the letter delivery service and ensure it is sustainable for the future.

It comes as Royal Mail has continued to fail to meet delivery targets set by Ofcom and amid MP concerns over practices in the postal service and worries that parcels are being prioritised over letters.

In a cross-party Commons committee session last month, the CWU told MPs the postal service had become “chaotic” with Royal Mail workers being told to leave doctors’ and hospital letters on racks to prioritise parcels.

Royal Mail’s owner Daniel Kretinsky, who was also giving evidence to the committee, insisted there was no “management decision” for parcels to be prioritised over letters and argued the service cannot be fixed until plans for reform of the USO are put in place.

On the agreement with Royal Mail, the CWU said in a statement to its members: “It is now imperative that all branches, representatives and members have the opportunity and time to fully consider this agreement properly, not only on the basis of how we have moved the company significantly on all the key issues, but also in its wider context around why USO reform is necessary and why we must shift our focus to changing the role of Ofcom and create a level playing field with our competitors.

“Delivering change will always be difficult but we are clearly in a stronger position to support our members under the terms of this agreement.”