Tag: UK

A multi-billion-pound funding package for the cash-strapped Royal Mail is likely to be paid out next month – eight months after it was agreed with ministers. The trigger for the payment of the GBP3bn deal has been the agreement in principle of a share plan for employees of Royal Mail. The new plan is a compromise between the Royal Mail’s plan for actual shares to be given to staff and a more straightforward profit-sharing scheme advocated by the Communication Workers’ Union (CWU).
Under the deal, Royal Mail workers are likely to be issued with “phantom shares” which will track the value of the business and allow staff to share in its value. The hope is that approximately 200,000 Royal Mail workers could be left with phantom shares worth GBP5,000 after five years.
The compromise emerged after months of negotiations between Allan Leighton, Royal Mail’s chairman, and Alastair Darling, the DTI Secretary. Sources close to the talks insisted that no deal was agreed. One said: “There is a lot still to do to agree, but it is a way forward.” Other sources said that Royal Mail would be happy with a deal which gives staff about GBP5,000 worth of shares in the company.

A multi-billion-pound funding package for the cash-strapped Royal Mail is likely to be paid out next month – eight months after it was agreed with ministers.

The trigger for the payment of the pounds 3bn deal has been the agreement in principle of a share plan for employees of Royal Mail.

The new plan is a compromise between the Royal Mail’s plan for actual shares to be given to staff and a more straightforward profit-sharing scheme advocated by the Communication Workers’ Union (CWU).

Under the deal, Royal Mail workers are likely to be issued with “phantom shares” which will track the value of the business and allow staff to share in its value.

The hope is that approximately 200,000 Royal Mail workers could be left with phantom shares worth pounds 5,000 after five years.

Royal Mail had wanted the Government to agree to give a fifth of its shares to its employees.

However, a straight share transfer was strongly opposed by the postal workers union, the CWU, and Left-wing Labour MPs who feared it might be a back-door privatisation of the business.

The postal service, which has a deficit of pounds 5.5bn in its pension scheme, will plough the money into its pension fund, as well as modernising sorting equipment.

Royal Mail has announced a number of new benefits for customers, including discounts for large business mailings using correct addresses.

A new product, Cleanmail Advance, has been launched by Royal Mail as a way to provide a financial incentive to business mailers in ensuring that their mailshots carry the correct addresses.

Through the Cleanmail Advance product, customers will be given easier access to discounts when sending more than 1,000 items with correct addresses that that can be read by machine.

Cleansing databases of old or redundant customer address records, known as ‘dirty data’, is a prime way of reducing wasted mail costs – and reducing unnecessary work for postal service workers.

Another new product is designed to reward businesses that send a minimum of 250 large letter-sized items and ensure they can be easily read by the machines, as part of an initiative by Royal Mail to increase its automation.