Postcomm confirms penalty on UK Royal Mail for failing to protect mail
Postcomm, the independent regulator for postal services, today confirmed a financial penalty on Royal Mail for breaching its licence by failing to properly protect the mail in its care. The penalty – £9.62 million – has been reduced slightly from the £11.38 million originally proposed, following representations from Royal Mail and others.
The penalty follows a review of Royal Mail’s “mail integrity procedures”, during which Postcomm found that some important features of Royal Mail’s procedures were not being applied across the business. The most significant weakness was the poor management of the recruitment and training of non-contract (agency) staff.
In addition, the framework and information systems that Royal Mail had put in place to prevent loss, theft or damage of mail, were not being used effectively, significantly reducing the company’s ability to protect customers’ mail.
Notes for editors
On 10 February 2006, Postcomm published a consultation document proposing a financial penalty of £11.38 million on Royal Mail for its mail integrity failures. After taking account of representations by Royal Mail and other respondents, Postcomm’s Commissioners decided to reduce the penalty to £9.62 million.
The main reason for reducing the penalty was the acknowledgment that all types, weights and classes of mail are affected by Royal Mail’s procedures, not just first class stamped mail, used as the original basis for the calculation of the penalty. This is the largest financial penalty Postcomm has imposed on Royal Mail and relects the seriousness of the licence breach.
Today’s decision follows a penalty of £271,000 imposed on Royal Mail on 26 April this year for poor performance in delivering mail in three London postcode areas. Postcomm is still considering representations on a further proposed penalty following complaints about internal procedures at Royal Mail which could give it an unfair advantage over its competitors.
In December 2003, Postcomm imposed a financial penalty of £7.5 million on Royal Mail after the company failed to meet delivery performance standards for two types of business mail.
Postcomm’s decision is published today in a report: Royal Mail’s mail integrity procedures: proposed variation of penalty (pdf, 238KB). Also issued today is a penalty notice (pdf, 24KB).
