9% Royal Mail Pay Offer in Jeopardy

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An improved Royal Mail pay offer of 9% has been made according to the company, but with no agreement yet reached with the CWU, say that this would no longer be affordable if further strikes go ahead.

On 7 November 2022, we entered intensive talks with the CWU to reach an agreement on the current pay and change dispute. The talks, which had been scheduled to conclude on 15 November, are continuing to allow more time for a resolution to be reached.

But time is tight given the notified strikes starting on 24 November. If these strikes go ahead, they will cause more damage to the business and make our improved 9% pay offer over two years less affordable.

– Royal Mail

Royal Mail pay offer

The CWU aren’t that happy as although a Royal Mail pay offer has been suggested and the union recognises progress in recent negotiations has been made in some aspects, they say that Royal Mail management failed to put any commitments into writing.

With talks extended past the 15th of November deadline, CWU General Secretary Dave Ward has accused the Royal Mail Group CEO Simon Thompson and the Board of creating deep financial problems by continually engaging in “dramatic errors of judgement”. The Union say that strikes in the Christmas build-up look set to go ahead.

Current Strike Timetable

Strikes planned for the strikes planned for Black Friday week are now almost certain to take place and will impact:

  • Thursday 24th November
  • Friday 25th November
  • Wednesday 30th November
  • Thursday 1st December

Dramatic errors of judgement have been made, like announcing 10,000 job losses to threaten striking workers, abandoning previous agreements and handing over £567 million to shareholders while neglecting the pay of employees who generated that profit.

Many things remain unexplained, like giving up Royal Mail’s household name in favour of ‘International Distributions Services’, refusing the union’s offer to escalate negotiations and ignoring the unrivalled network of Royal Mail Group to create new financial opportunities.

We firmly believe these reckless decisions have been informed by power struggles in the boardroom, in the full knowledge of a potential future takeover bid – backed up by the government’s green-lighting of VESA to increase their shareholding. “Postal workers need a deal that works for them, the communities they love and the industry they loyally serve, not one that covers up for CEO and boardroom failures

– Dave Ward, General Secretary, CWU

International Distributions Services half year results

Reading Royal Mail’s half year results shows how the business has been devastated. For the first six months of their financial year, International Distributions Services have gone from a $404 million profit to a £57 million loss.

GLS is bubbling along with a £162 million profit compared with Royal Mail who are down 193.2% losing £219 million in the six month period. The group have repeatedly stated they’d rather split the group up than subsidise Royal Mail from GLS profits.

Royal Mail are also pressing ahead with change regardless of what the CWU would like to see. They say they’d prefer to reach an understanding with the Union, but they’re not hanging around waiting for agreement.

We have started to implement the change needed to rightsize Royal Mail which will ensure that it is both better placed to serve our customers’ needs in parcels, as well as letters, bring it back to profitability and provide a sustainable future. We believe that this is the best course of action for the long-term survival of Royal Mail even if it results in short-term disruption. A sustainable future must also include urgent reform of the Universal Service. Government has now been approached to seek an early move to five day letter delivery, whilst we continue to improve parcel services.

The Board reiterates that in the event of the lack of significant operational change in Royal Mail it will look at all options to preserve value for the Group including the possibility of separation of the two businesses.

– Keith Williams, Non-Executive Chair, International Distributions Services

We have always been clear we need change to survive. We have started turning the business around and will do whatever it takes. We have worked hard to deploy our contingency plans to minimise disruption to customers and impact on revenue. Our infrastructure plans are on time and we are now making the operational changes to turn Royal Mail into a thriving business that will provide great service for our customers at a competitive price and long-term job security for our people.

We would prefer to reach agreement with the CWU, but in any case we are moving ahead with changes to transform our business.

– Simon Thompson, Chief Executive, Royal Mail
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