Consignia fails to sway watchdog

Consignia, the loss-making Post Office group, is likely to be dealt a further blow this week when industry regulators meet to finalise plans to open the postal market to competition. Despite pressure from Consignia directors and some MPs to water down their liberalisation proposals, postal services commissioners are expected to press ahead with plans for a three-stage relaxation of the pounds 5bn market.

Consignia, which loses pounds 1.5m a day, has warned that plans outlined by the regulator, Postcomm, three months ago could wipe pounds 250m off its annual operating profits.

The state-owned company is seeking to lift postal charges to help offset the anticipated hit and was reported yesterday to be pressing the government to hand back up to pounds 1.8bn of past profits to help finance a restructuring. Its calls for a more sedate opening of the market along the lines proposed by the EU have failed to convince Postcomm, however.

At their meeting on Thursday the commissioners are expected to endorse in principle plans to open up about 30% of the market as a first step to full-scale competition.

Full details of the proposed industry shake-up will be announced at the end of the month. Indications yesterday were that commissioners may make some adjustments to the original Postcomm plans, including possible changes to the bulk mail thresholds at which competitors will be al lowed to apply for a licence. Consignia has warned that plans to allow rival operators to handle individual mailings of 4,000 items or more would open up considerably more than the 30% of the market the regulator is looking for.

The Royal Mail and Post Office group, which is looking to slash pounds 1.2bn from its cost base in a restructuring that could cost up to 30,000 jobs, has meanwhile defended itself against union claims that bullying and harassment of workers is costing the organisation pounds 15m a year in sick leave payments alone.

According to a survey by the Communication Managers Association section of Amicus, four out of five staff claimed to have experienced bullying in the past year.

The union, which represents 15,000 managers and professionals within Consignia, claimed the survey of 265 members, disclosed “an institutional culture” of bullying and harassment within the post office. It called for a crackdown by management.

Consignia, which employs 220,000 people, said the onus was on everyone within the organisation, including Amicus, to deal with the issue. A spokesman said the company had a “zero-tolerance policy” towards bullying. “We find bullying totally unacceptable and we take action when cases are brought to our attention including dismissing those responsible. We know that we have a problem in line with other companies and we are determined to deal with it.”