By Aby Jose Koilparambil
(Reuters) - The dispute between Britain's Royal Mail and its largest labour union flared up again on Monday after the workers' body rejected a new conditional pay hike from the postal and parcel services company, citing "unacceptable changes".
Royal Mail and the Communication Workers Union (CWU) last week agreed to engage in talks through arbitration to resolve the months-long pay dispute and on Sunday the CWU withdrew its planned strike action in Britain in the next two weeks.
Royal Mail's latest offer includes a 7% salary increase over two years, plus a lump sum payment of 2% of pay this year, but was subject to CWU agreeing to several changes including to Sunday working, start times and flexible working.
The CWU, which represents more than 115,000 postal workers at Royal Mail, rejected the offer and said it would vote to take further strike action. Last month it had called for 19 days of strikes across October and November against the over 500-year-old company.
"It (the offer) includes more unacceptable changes and a derisory 7% two-year pay offer that is well below projected inflation for both years," the CWU said in a statement.
British inflation was pushed back into double digits last month after the biggest jump in food prices since 1980, matching a 40-year high hit in July.
Royal Mail, the British arm of parent International Distribution Services (IDS), earlier this month said it could cut up to 10,000 jobs and warned of more layoffs if planned strikes go ahead and warned of deeper losses this year.
Royal Mail has been working on a transformation plan to shift its focus to parcels amid sliding letter volumes, but its proposals to take the pay dispute to arbitration and change its policies had angered the CWU.
Earlier on Monday, Britain said it was no longer intervening in Czech billionaire Daniel Kretinsky's plan to increase his stake in the company, boosting IDS shares.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Shailesh Kuber and David Evans)