Businesses face post chaos as Royal Mail strike looms

With management and unions still apparently miles apart, a national postal strike looks almost inevitable...

Last Updated: 31 Aug 2010

The prospect of a full-scale walk-out by Royal Mail staff moved a step closer today, after the Communication Workers Union asked its 100,000 members to vote on a proposed national strike. The various wildcat strikes across the country in recent weeks have already played havoc with the post – some estimates suggest that up to 20m letters and parcels may be sitting around in warehouses waiting to be delivered, which is bad news for any businesses that rely on the service. Negotiations between management and unions seem to have reached a total impasse – but the worry for both sides has to be that further disruption will only hasten its decline…

The CWU is calling for the official strike – as opposed to the unofficial strikes that have stymied the post in various places from London to Carlisle this week – in protest over pay, job security and equipment. The heart of the matter is the management’s ‘modernisation’ plan, which it reckons the Royal Mail desperately needs to survive. Naturally, this will have to include job cuts, and this is really why the CWU is planning a walk-out – as evidenced by the fact that it’s promising not to strike if the Royal Mail gives up on the idea of redundancies. But in an era where snail mail volumes are in (possibly terminal) decline, it’s a bit hard to see how the company can hope to protect 120,000 jobs.

What’s more, according to management, the unions have already agreed to the redundancies – as part of the agreement that ended the last national postal strike in 2007. MD Mark Higson has accused the CWU of reneging on the deal, calling the proposed strike action ‘wholly irresponsible’. However, the union naturally begs to differ, suggesting there was no specific agreement about job cuts. Either way, they’re likely to walk out next month if the ballot has the expected result.

It’s a depressingly old-fashioned row, of a type that we don’t often see these days, and it doesn’t look like there’s much chance of a compromise being found. If fewer people are using the post, it stands to reason that Royal Mail will have to trim down. The unions insist that they're in favour of modernisation, particularly via investment in new sorting machines and so on - but how can that not lead to job cuts? Besides, it's debatable whether Royal Mail can afford that kind of investment, not least because it has a huge pension deficit (estimated to be in the region of £10bn) to worry about. And since the Government scrapped the idea of a part-privatisation earlier this year, to avoid upsetting its own back-benchers, there’s no viable alternative source of cash.

But what’s certain is that further disruption to the service will increase public antipathy and give customers even more incentive to seek alternatives. So we can’t help feeling that a strike might be short-sighted, to say the least.

In today's bulletin:

John Lewis puts on a brave face as sales slump
Business face post chaos as Royal Mail strike looms
Editor's blog: Poor old Kodak's fall from grace
Burberry needs a little help from its (online) friends
Will recovery be harder than recession for SMEs?

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