Royal Mail staff warned company in ‘fight for its life’ as more strikes loom

Management at Royal Mail have told staff that neither the government nor regulator will ride to the rescue of the struggling 506-year-old former monopoly in a last-ditch attempt to convince postal workers to end their strike action over the Christmas period.

“We are now fighting for the life of this business”, workers were told in a letter sent to them last week that was signed by chief executive Simon Thompson and eight other senior managers.

Staff at the former state-owned company, which is struggling to keep up with rival delivery services, first voted for industrial action five months ago in a dispute over pay and working practices. The CWU union has stepped up industrial action with a series of strikes this month with postal workers set to stage another 48-hour walkout on Friday.

“There’s no one else who will save this business,” the letter, obtained by the Financial Times, continued. “The politicians and the regulator have been very clear. It’s up to us.” Royal Mail, which was privatised in 2013, confirmed that the letter was referring to ministers and Ofcom, the communications regulator.

The letter is the latest attempt by management to increase pressure on postal staff, after Thompson threatened last week to bring in more freelance delivery drivers to force through changes opposed by employees.

The group, which has tried to shift its business model to focus on more profitable parcel deliveries as the widespread use of email undermined its traditional letters business, said last month that it appealed to the government for help to stem losses that it said were running at £1mn a day.

But business secretary Grant Shapps said last week he had rejected the request to reduce the legally binding requirement to provide letter deliveries six days a week by dropping Saturday services. This is part of Royal Mail’s “universal service obligation”, enforced by Ofcom, that was imposed by the government when it was privatised.

The long-running dispute, part of the worst industrial unrest seen in the UK in decades, has allowed rivals to snatch more market share. The latest wave of industrial action in the run-up to Christmas has hit Royal Mail at the peak time of year for parcel deliveries with images on social media of sorting offices overflowing with items.

Management is now preparing for the prospect of industrial action stretching into the new year, with a fresh ballot planned by the CWU in January.

The CWU original vote for industrial action in July came as staff rejected an offer of a 2 per cent pay rise, with any further increase conditional on staff accepting conditions such as Sunday shifts and later start and finish times.

Last month, Royal Mail returned with a “final and best offer” of a 9 per cent pay rise over 18 months, along with voluntary Sunday working and a staggered introduction of later hours.

“We would love our workers to [agree to changes],” Thompson said last week. “But if they won’t follow the work, then we’ll look for alternative models to do that, whether it’s an owner-driver model or we get [international partner business] Parcelforce to help.”

CWU secretary-general Dave Ward said the union remained concerned about a “race to the bottom” even after these concessions, warning Thompson that any changes made without postal workers’ consent would plunge the business into “chaos”.

He added: “If they start [forcing through change], it will elevate this to the most serious dispute since the miners’ dispute,” referring to the year-long, bitter strike in 1984-85 during the Conservative government of Margaret Thatcher.

Royal Mail is concerned that prolonged industrial action will lead to the loss of more business to other couriers, several of whom have grown rapidly by recruiting delivery drivers on less generous pay and employment terms.

“It looks to me like the union have been deliberately slowing things to impact Christmas,” Royal Mail chair Keith Williams told the FT, accusing the CWU of deliberately delaying the start of talks at the conciliation service Acas, which finally began in October. He refused to say how much delivery volumes had fallen in the run-up to Christmas, but said the company had put accountants and lawyers on the front line to help get as many parcels as possible to customers.

Ward, who acknowledged the strikes have created “massive backlogs” in deliveries, denied that the union had purposefully targeted Christmas. “We didn’t want to be in this position,” he said, but added: “We are not going to burn members out. We are in this for the long haul.”