Royal Mail warned over industrial action

Royal Mail is facing the prospect of a second summer of discontent after postal workers rejected its plans to reform its pension fund.

The Communication Workers Union today called for fresh talks on pensions reform after a ballot of 140,000 members voted heavily against Royal Mail’s plans to curb the fund’s GBP 5 bn deficit.

But the deputy general secretary, Dave Ward, warned: “With such overwhelming opposition to their plans, if Royal Mail can’t find an acceptable solution, industrial action will be inevitable.”

Last year Royal Mail was hit by a series of damaging strikes over pay, modernisation proposals and pensions.

Royal Mail insists its pensions reform formed part of the settlement, the union maintains that the issue was “de-coupled” from the other issues.

Royal Mail’s reforms, which came into effect this week, mean that the pension scheme was closed to new employees from March 31 though they will be able to join a new scheme next year. The normal retirement age has been increased from 60 to 65 though it will still be possible to take a pension at 60. From the beginning of April, benefits will accrue on a career average, rather than on a final salary basis, but previous earnings will come under the final salary scheme.

Royal Mail said it could not give a figure for the savings from the changes but added that it was contributing GBP 850m a year to the pension fund. It said that equated to 30 pct of pensionable earning and the reforms would bring that total figure down to 21 pct.

The union said 92 pct of the vote has been against the Royal Mail proposals.

Royal Mail managers voted to reject the pension reforms two weeks ago and the CWU said it would be discussing with their union, Unite, a joint approach to industrial action if it became necessary.