Royal Mail spared £37.2m payout
Postcomm has said that Royal Mail will not have to pay £37.2m in compensation to mailers who suffered from a drop in business due to UK postal strikes during 2009-10. The UK regulator announced that it had accepted in full Royal Mail’s application for relief from the financial impact of failure to meet quality of service targets.
Royal Mail will not be forced to recompense bulk mailers to the total of £37.2m, or to forego ‘allowed revenue’ of £49.2m in 2010-11.
Postcomm said that there was “strong evidence” to the postal operator’s claim that a prolonged period of industrial action was “a direct result of the company’s ongoing transformation of its business”.
Royal Mail had applied for relief from such compensation in February, with Postcomm examining the case since July. Upon giving the ruling, the regulator said that the interests of mail users are best served by accepting Royal Mail’s application and supporting the ongoing transformation of Royal Mail’s business.
A spokesman from Postcomm said: “This process of transformation has been identified by Royal Mail, Postcomm, the Hooper Review and Government as essential and urgent to safeguard the provision of the universal service in the UK.
“Postcomm’s primary duty is to safeguard the universal service. In making this decision Postcomm has therefore been mindful of the financial impact that compensation and forgoing revenue would have on Royal Mail’s financial position and its ability to finance its activities, including the universal service.”
Royal Mail said that it will take into account quality of service failings on the payment of bonuses, a move welcomed by Postcomm.
The first wave of industrial action began in June 2009, with localised strikes taking place, including staff walkouts in London. Royal Mail then suffered from several days of national striking throughout the second half of 2009. A deal improving wages and job security for postal workers was agreed between the Communication Workers Union and Royal Mail in March, bringing an end to the dispute.
Upon giving the ruling, Postcomm said that the interests of mail users are best served by accepting Royal Mail’s application and supporting the ongoing transformation of Royal Mail’s business.
