Postwatch urges UK Royal Mail strike payouts

Royal Mail, the troubled monopoly postal operator chaired by Allan Leighton, is in dispute with the Government-funded post watchdog on whether it should pay compensation to customers inconvenienced by recent strike action. The two organisations need to come to a decision this week, but sources close to the talks said they were still failing to reach agreement as to whether the wildcat strikes that crippled the delivery network constituted “circumstances beyond Royal Mail’s control”. “We understand their problem, but we want to do the best for customers,” said a spokesman for Postwatch, the organisation set up by the Government to champion postal customers’ rights. “The problem is how they could physically cope with millions and millions of claims, and they don’t want to divert people into setting up additional call centres while they are dealing with the backlog from the action.” Royal Mail has said it will take up to three weeks to deal with the backlog, while the wildcat strikes are thought to have cost it tens of millions of pounds. A spokesman for the organisation said there were discussions taking place, but wasn’t prepared to comment on their status. She confirmed, however, that a decision should take place this week. Being forced to pay compensation for the estimated five million items that were delayed during the strikes, centred on London, would cost Royal Mail, which is poised to turn its first interim profit for five years, dearly. Under the organisation’s compensation scheme, it offers 12 times the cost of postage for first-class letters that arrive more than four days after they are posted. If the delay rises to 12 days then compensation could be increased to pounds 10 in exceptional circumstances. Even if only a quarter of the delayed items faced a claim at the standard rate, it would cost Royal Mail an extra pounds 4m (payable in books of first-class stamps) as well as the cost of processing the claims. However, it is understood that the organisation says the compensation process is not relevant because the industrial action was an exceptional circumstance outside Royal Mail’s control. Postwatch disagrees, pointing out that, in January, Royal Mail will be subject to mail regulator Postcomm’s new scheme that specifically states that industrial action is not a valid excuse to suspend compensation. “Postwatch feels that customers deserve a very big apology for this,” said sources close to the talks. “It has to be a monetary apology because that is the only sort that the customers understand.” Postcomm, the mail regulator, has introduced a new code for delayed mail, applicable from January.