Royal Mail faces anger over 'phantom shares'

Royal Mail, the newly renamed postal group, will today set itself on a new collision course with unions, as it fleshes out the details of an employee incentive programme, which will reward workers with “shares” in the business.

Allan Leighton, chairman, will launch the so-called “phantom share” scheme. Unions, however, will argue that the action could pave the way for a full or part-privatisation in a few years’ time. They will question why the scheme is specifically linked to the creation of shares, rather than an arrangement pegged to a straightforward productivity bonus.

Mr Leighton and the Government have both pledged that there will be no privatisation of the state-owned postal group.

The scheme will be announced as Royal Mail presents its half-year figures. The figures are expected to reveal losses have been stemmed but little headway has been made in returning to the black.

A senior executive of the group, which has been losing Pounds 1 million a day, commented that the business is no longer sinking but that it has not yet turned the corner to recovery.

Today Royal Mail will also face a new threat of strike action when the Communication Workers Union is expected to announce a ballot result overwhelmingly in favour of a series of walkouts at the cash-handling division.

The action is in protest at Royal Mail’s plans to outsource the division, which employs 3,000, to Securicor. The deal has been referred to the Competition Commission and it is possible that a board meeting of Royal Mail next week will decide to scrap the idea.

It is expected that job cuts will be ordered at the division, which delivers cash to post offices, even if the decision is taken to shelve the deal. The pressure is also on Royal Mail to name a chief executive to replace John Roberts who quits at the end of the year. The appointment is seen as pivotal to the future of the business.

Royal Mail is expected to say that about 16,000 jobs have gone in the past six months, with many being Parcelforce drivers who have now become self employed. The organisation wants to axe 30,000 jobs but cuts in mail operations are dependent on a new service system that will see the end of the second delivery to homes and of delivery before 9.30am to many homes.