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(Bloomberg) — Royal Mail’s hopes of ending months of strikes have been dealt a blow after the Communication Workers Union said it was suspending a vote on the company’s latest pay offer due to a “toxic” atmosphere between the two sides.
Workers had been voting on a 10% raise over three years, plus a profit share pact and a £500 bonus. The company, which is part of International Distributions Services Plc, reported a £1 billion ($1.24 billion) operating loss last week and said an agreement with the union was crucial to allow the company to modernize.
IDS shares fell to trade 3% down on the day.
Read More: Royal Mail Plunges to £1 Billion Loss After Fight With Union
Earlier this month Royal Mail was put under investigation by regulator Ofcom for falling short of key targets on deliveries. It also lost its chief executive officer after Simon Thompson said he would stand down later in the year.
The CWU said Wednesday that Royal Mail had “failed to take any responsibility whatsoever” for its plight, and accused it of having a “culture of imposition, command and control.” The CWU made demands including a mass Zoom meeting with all the union’s representatives and managers in the UK.
The labor group has previously said Royal Mail wants to turn itself into a gig economy-style courier dependent on casual labor, meaning thousands of potential job losses. Royal Mail disputes the claims and says it has to adapt to compete in the lucrative parcels market as people send fewer letters.
A spokesperson for Royal Mail said the “need to change is critical so that we can improve our quality of service.” They said the sooner the ballot takes place, the sooner workers will get a raise and greater job security.
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