The union has agreed to lift the cap of three pieces of door-drops delivered a week, thus increasing availability to advertisers, and to trial more efficient ways of doing things across the operation.
Alex Walsh, the DMA's head of postal affairs, said the strike threat had been "a dark cloud over the industry's horizon" and the association was glad to see that common sense has prevailed.
Walsh noted that the deal has yet to be ratified by CWU members. The union is preparing to ballot its members on accepting the deal, which it has recommended.
Billy Hayes, general secretary of the CWU, said: "This is a progressive and unprecedented agreement that will deliver significant benefits to postal workers. Royal Mail has responded to our clear vision of higher pensionable pay, job security, pension investment and a progressive attitude towards managing and growing the business."
According to Adam Crozier, Royal Mail's chief executive, the deal is great news for postal workers and customers.
"Our people will see increased earnings and our customers will see greater capacity where they need it. We're getting on with tackling the competition -- not each other," he said.
The agreement confirms the 2.9% pay rise Royal Mail applied in April. It was what the union described as the imposition, without negotiation, of this rise that led it to consider strike action.
It also confirms an additional 1% rise earned through a productivity agreement between the two sides in February, equivalent to over 拢25m across the organisation.
The new element is the provision for further pay rises over the year, which are dependent on the achievement of efficiency savings. According to the CWU, 40% of all efficiency savings of this financial year will be put into basic pay, meaning that workers may receive four pay rises this year.
The union remains "fiercely opposed" to any move to the privatisation of Royal Mail and the deal does not touch upon employee share ownership, according to a CWU spokeswoman.
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