Could trouble at Royal Mail signal a winter of discontent?
Emboldened by the rise of Corbynism, the action may be the first in a string of strikes MPS believe. Christopher Williams reports
‘The Royal Mail’s goal is to reduce the risk to its finances posed by ballooning deficit top-up payments’
There were two events that threatened to overshadow the Conservative Party Conference in Manchester on Tuesday. Allies of the Foreign Secretary battled allegations that his speech and the chaotic approach to it was designed to undermine Theresa May. Meanwhile the Communication Workers Union (CWU) was transparent that its own event five minutes from the conference venue was timed to cause maximum impact on the Government.
Postal workers and union officials gathered at Manchester Mechanics, the site where the Trades Union Congress was founded in 1868, to announce the results of a ballot for industrial action against Royal Mail.
In its attempt to secure a mandate for a strike, the CWU had adopted the social media and grass roots campaigning techniques that delivered Jeremy Corbyn’s strongerthan-expected showing at the General Election. The Government raised the bar for legal industrial action last year. As well as a majority in favour of industrial action, unions now require a turnout of at least half their members.
In the end it was not even close. Nearly three-quarters of CWU members voted and of them nine out of ten were in favour of a walkout. Neither side expected much less given a long history of high turnouts for the CWU, but union officials made their point about the new laws.
By the end of the week, the union’s postal executive had met and decided on a two-day strike on October 19 and 20 as soon as it believed was legal. The plans come with a threat of further 48-hour action targeting the Black Friday online retail bonanza in late November and vital contracts with the likes of Amazon and Asos.
To a room stuffed with applauding union reps and a scattering of press on Tuesday, the CWU lead negotiator Terry Pullinger launched a sustained attack on Royal Mail and chief executive Moya Greene.
“The promise of privatisation was that when Royal Mail was in the public sector it was starved of investment. This was the answer to all our prayers. We were going to see a Royal Mail group that was now going to grow its product portfolio, it was going to grow new revenue and protect the universal service obligation,” said Pullinger.
“It was also going to protect, our members were told, their employment, their standard of living and their pension security. Now all of that has gone out of the window.”
For Royal Mail and Greene the attack from a powerful union represents a major crisis. The company has endured a torrid time since privatisation four years ago as intense competition in parcel delivery and the decline of the letters market raises questions over the company’s future. Royal Mail dropped out of the FTSE 100 earlier this year and at around 375p the shares have been sliding towards their 330p offer price from north of 530p less than 18 months ago.
There is an irony in the CWU campaign on pensions and pay. For a post worker on an average Royal Mail salary of around £23,400, the RPI inflation increase demanded by the union is equivalent to just over £900.
At privatisation employees were granted shares that have lost over £1,000 of value since last September, when the company announced changes to pensions. Royal Mail’s challenges are broader than industrial unrest, as more nimble rivals who use self-employed “gig economy” delivery staff target the parcel market, but the company believes much of that decline is due to the CWU ballot. The pensions element of the dispute is more complicated. Royal Mail plans to close its traditional final salary scheme to new accruals from April. Staff were initially offered a defined contribution scheme, which has since been improved to a new, less generous defined benefit structure.
Either way the company’s goal is to reduce the risk to its finances posed by ballooning deficit top-up payments. Longer lives for retired postmen and a decade of rock-bottom interest rates have prompted the Royal Mail to attempt to sacrifice what for the CWU and its members is a sacred cow.
The dispute is now almost certain to go to the High Court next week, with Royal Mail seeking an injunction to block the strike. The company alleges that the union is in breach of a legally binding agreement on the rules of engagement signed pre-privatisation in part to give investors comfort that their new charge would not get bogged down in union rows.
At the time CWU general secretary Dave Ward said the agreement meant “a fresh approach to industrial relations [that] will help create industrial stability”. Royal Mail claims the CWU has not engaged in the required mediation before calling a strike.
A walkout would be illegal until close to Christmas, it argues, when post workers are unlikely to want to miss out on lucrative overtime. A CWU source described the basis of the company’s legal challenge as “desperate”. It says failed talks with the Royal Mail were mediated by a former Acas official. The company says he was a mere observer. The Royal Mail’s prospects this winter rest on such arcane details. But the ramifications are much greater.
At the Conservative conference there was a nervousness among MPS that the CWU action could be just the start. They fear a string of strikes by a trade union movement emboldened by the rise of Corbynism. Claims from the hard Left of a coming “winter of discontent” are overblown, but the Royal Mail is on the front line of an increasingly tense industrial battlefield. It has not yet given up on agreeing a deal, however. Company sources said it would be willing to improve elements of its proposals to avoid a strike. It is attempting to bring the CWU back to the table by threatening to withdraw the offer entirely if workers walk out.
Yet having called for Greene to be sacked, it is unclear how the union can now return to the table.
Mail sacks pile up at King’s Cross Station, London, during the ‘Go-slow’ of 1970; Jeremy Corbyn with Dave Ward, general secretary of the CWU, left