Royal Mail insolvency & strikes one step closer

Category: Operations
2023 Royal Mail Strike Royal Mail insolvency

Talks between the CWU and postal management have collapsed, bringing the possibility of Royal Mail insolvency one step closer – if the union announce further strike dates it’s a real possibility that the Universal Distributions Services board could pull the trigger and throw the problem towards the government who would have to give permission for a special administration.

Royal Mail say that talks ‘concluded’ without an agreement being reached:

After 11 months of talks, including mediation by Sir Brendan Barber and Acas, we are deeply concerned that our talks with CWU have concluded without an agreement.

We made substantial efforts to reach an agreement, including making a number of further improvements to our offer. These improvements were all based on feedback from the CWU, and we were hopeful that the CWU would put a deal to its members.  

We remain committed to reaching an agreement with the CWU. We have been clear throughout the dispute that not transforming our network and working practices is not an option in a business losing more than £1 million a day. In the best interests of the business, our customers, and the job security of our postmen and women, change cannot be delayed any further.

– Royal Mail

However, the Union disagree saying that they were willing to carry on negotiations but Royal Mail made themselves unavailable for further discussion:

Negotiations between the CWU and Royal Mail Group concluded last night without agreement. 

The company advised the union that the directors who have been leading negotiations are no longer available and that the Board will be meeting today to determine their next steps. 

There has been progress in several areas, and the union made it clear last night that we are willing to continue negotiations today and tomorrow to finalise an agreement.  This offer has been reiterated to the company this morning.

We will be consulting with the union’s Postal Executive later today and considering all available options with regards to our next steps.

The company have published selected aspects of their latest offer directly to employees, claiming that the main sticking point is new entrants’ terms and conditions.  This is not true. 

Our members have seen these actions throughout this dispute from the employer and they will not be fazed.  We will engage with all union members on the status of the whole talks, explaining exactly where the differences are, including the unacceptable pressures being deliberately placed on postal workers through imposed revisions that are failing the quality of the postal service and of USO compliance.

– CWU

There are two things that can now happen, neither of which will do anything to stem Royal Mail £1m per day losses or win back the £200m business that’s gone to other carriers due to the dispute. Royal Mail could go for special administration, or they could try simply telling Ofcom they want to hand the Universal Service back… and if they throw the problem back to Ofcom who knows what might happen – there are no viable businesses ready to take on the letter service and Royal Mail know that more than anyone.

It’s possible this is all a high stakes game of poker, having requested permission to change the Universal Service to a 5 day a week instead of 6 day a week obligation, Royal Mail could quite well hope that special administration could result in a 3 day a week service with half the country getting mail Monday, Wednesday and Friday with the other half getting a Tuesday, Thursday, Saturday service. Royal Mail insolvency would in some ways resolve many of their problems with the Union as negotiations and mass redundancies would be viewed in a very different light.

Either way, whatever happens, keep your plans to use alternative carriers on the front burner, and sadly although it will hurt Royal Mail even more into the future, be wary about relying on them to delivery the post for the foreseeable future.

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