The Post Office has abandoned some of the planned cuts to retailer Post Office remunerations worth approximately £7.7m.

The planned cuts were part of the organisation’s Simplification phase two plans (£7m) and cuts to ATM commissions (£700,000). However, the previously announced October commission cuts are still to go ahead.

On top of the U-turn on some of the planned cuts, the Post Office is to pay an additional £900,000 to subpostmasters as a reward for hitting post segregation targets. It will also be improving banking transaction rates in the future with the increased commissions backdated to April 2018.

This is supported by simplified branch processes which the PO claims will save retailers 17 minutes per week, and a further 33 minutes a week if they have a Post Office ATM.

The news was announced to subpostmasters in a letter acknowledging the need to give subpostmasters fairer remuneration.

The PO's CEO of retail Debbie Smith said in the letter, seen by Retail Express: “I believe these changes are fair and reflect the vital importance of having our postmasters engaged in serving our customers to the high standards they expect.”

The company's last annual results showed staff were working longer for less.

Future National Federation for Subpostmasters (NFSP) CEO Calum Greenhow commented: “This news will be a huge relief for subpostmasters, many of whom were facing deep cuts to their income as a result of the previously planned reductions.”

The NFSP  was referenced in the Post Office's letter and the trade body claimed credit for the cuts reversals. However, this was contested by the branch secretary for the Communication Worker’s Union’s postmaster branch, Mark Baker. Baker told Retail Express: “The Post Office letter didn’t say this was a result of the NFSP’s actions and this looks nothing like a successful pay negotiation.”

The CWU branch secretary added that the union’s legal case for “worker status” recognition for subpostmasters had progressed, with ACAS writing to the Post Office for a response due “any day now.” If the CWU win their case, subpostmasters will be entitled to £20,160 per year in pay plus holiday pay and cover, pension contributions and national insurance contributions.