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Proactive Investors – Royal Mail (LON:) owner International Distributions Services PLC will perhaps be surprised to have been offered a supportive lifeline from its main trade union in its effort to reduce its letter delivery requirements.
The Communication Workers Union appears to have conceded to accept proposals from the company that would abandon its obligation to deliver all letters six days a week under Universal Service Obligation legislation.
But against the background of a £3.1 billion takeover bid from its largest shareholder, ‘Czech Spinx’ Daniel Křetínský, which was rejected but is not expected to be the last, the CWU has accepted that some concessions are needed.
The union’s deputy general secretary conceded that the “USO (NYSE:) as a six-day option is no longer financially viable”, according to a report from the Times.
Union sources told the newspaper that the proposals would still see first-class post delivered on Saturdays, under the proposal from IDS.
The company still needs media regulator Ofcom to accept its proposals, as well as Kevin Hollinrake, the government minister for postal affairs.
Hollinrake told the Times that he was not yet aware of any recommendation from Ofcom to change USO.
The newspaper said an accord between IDS and the CWU could help garner government approval.
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