Royal Mail Talks End – No Agreement

As private talks between the CWU and Royal Mail officials come to an end, somewhat unexpectedly, no deal has been reached.

Royal Mail saw significant losses this year after many of its large customers moved their sorting requirements to rival mail handlers, and the losses look set to continue as Royal Mail is left effectively holding the baby – the Universal Service Agreement, Britain’s backbone final mile postal deliveries.

More disturbing perhaps is that whilst Royal Mail struggles to stand its ground after mail liberalization was effectively bulldozed through, there seems to be a hardcore of postal workers that are convinced that working to their times (a more acceptable way of saying ‘work to rule’) will see some divine presence appear from the blackness (presumably in the shape of Gordon Brown) and save them all.

The CWU have lost the battle so far and no amount of strikes or working to rule are likely save jobs or see any big pay rises in a business that is seeing large chunks of its most profitable work eaten up by rivals. It either works smarter and more efficiently or it fails. The likelihood of Royal Mail being broken up to maintain the Universal Service and allow Royal Mail to compete for business mail seems greater than ever.

Was deregulation pushed through too soon? Probably. The whole process has been very much a ‘suck it and see’ approach on the part of Postcomm which has had to adapt to teething problems since liberalization began and with the final phase of deregulation being put back for several European countries to enable them to adjust, a truly level playing field has yet to materialize. Critics argue that the service now provided by Royal Mail has fallen far short of the quality of service promised and the figures/targets used as indicators bear little resemblance to what happens in the real world.

Realistically, if you cut costs things inevitably deteriorate and with a service that relies more than ever on its employees using their own cars to deliver mail, there comes a point where there is simply no room to maneuver.

The CWU have been locked in talks with Royal Mail after bitter strikes in July and August, to get an improved pay offer and see the scrapping of what Royal Mail see as productivity initiatives and the union see as a pay cut in real terms. Royal Mail Chief Executive Adam Crozier, has repeatedly made it clear that 2.5 pct was all it could afford. With Royal Mail no longer able to secure additional funds from the government under EU law, the pot is simply empty. It has to be more efficient than ever if it is to survive.

Whether the union plan more strikes is unclear, but the price of such action is now too high – not just for its workforce but its customers too. Royal Mail says the ‘period of calm is now over’ and intends to press ahead and modernize its service. To be honest, with Postcomm breathing down its neck, it simply has no alternative.