Talks between Network Rail and the RMT union have resumed ahead of a Friday deadline that could intensify the rail dispute that saw three days of nationwide strike action last week.

The two sides met for the first time since the industrial action today, with the focus on contentious plans to modernise maintenance practices.

Network Rail and ministers insist reform of outdated practices that will lead to some redundancies are necessary to cut costs, following a collapse in passenger numbers and rail revenue prompted by the pandemic.

Having rejected an initial pay deal worth up to 3% linked to reforms, the RMT is understood to have prepared proposals of its own to modernise maintenance practices, and is expected to present those today.

The talks are taking place against the backdrop of Network Rail’s threat to begin consultation over redundancies with or without the union’s co-operation, a process due to formally begin on July 1.

Network Rail informed the RMT of its intention to consult on redundancies, under section 188 of the Employment Act, by letter last Monday, a move that prompted the union to walk away from talks that might have averted strike action.

The union says the Section 188 process is incompatible with its demand for a guarantee of no compulsory redundancies. The RMT is also seeking a substantial pay-rise to keep pace with the cost of living and has tabled a request for 7%.

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Rail sources accept that the move to consult on redundancies was “incendiary”, but say it was necessary to show that it is serious about reforming working practices even if it means marginalising unions.

Network Rail, which manages tracks and major stations, says the reforms will inevitably require redundancies, but believes 95% of these can be achieved through a voluntary process.

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If it decides to press ahead with the redundancy consultation process on Friday it would mark a significant escalation of the dispute at a highly sensitive time.

The RMT is due to hold its Annual General Meeting next week, a five-day gathering in Birmingham, during which the executive committee and officials currently running negotiations are stood down.

During that period the AGM is effectively in control of the union, with decision making in the hands of a much larger, and potentially more militant group that may press for further strike action.

Given the circumstances it would be brave, or perhaps foolhardy, for the employer to inflame the dispute ahead of the RMT AGM, meaning an extension of talks, and a delay to the consultation process, is more likely.

Union sources say they have constructive proposals for how to address maintenance reforms and have identified more than £200m of potential savings, including from ending a reliance on sub-contractors.

Network Rail says tackling restrictive working practices is central to making the railways viable post-pandemic.

They cite the example of having to send three teams of single-discipline experts to a fault, two of whom are usually not required, rather than one multi-disciplinary team. This can mean nine people attend a signal failure when three might suffice.

The RMT say multidisciplinary teams already operate to attend to points failures, and dispute claims that teams will not share vehicles. They say multiple vehicles are required for many jobs because of the amount of equipment required.

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Having brought the vast majority of workers out on strike three times last week however they are said to be relaxed about the negotiations and ready to “dig in” for the long haul if required.

If further strike action is scheduled it may come later in July, perhaps timed to coincide with the Commonwealth Games in Birmingham. The TSSA union is balloting its members over strike action, with the vote closing on July 11 and a walkout possible from July 25.

Ultimately ministers will play a role in settling the dispute, with Transport Secretary Grant Shapps setting Network Rail’s mandate for talks and the Treasury taking a close interest.

Mr Shapps and Treasury ministers have been in regular talks with railway leadership during the dispute, insisting on savings to close the £2bn funding gap following the pandemic.

They are also keen to set a precedent of tough negotiation ahead of the wider public sector pay debate, which will see teachers, doctors and nurses, firefighters and other key workers seeking increases closer to inflation, currently running at 9.1%.

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