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 Sunday Telegraph - Money & Business - - Front page -

‘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

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