Regulated part of the business to be placed into insolvency if deal cannot be reached
Source - Daily Telegraph - 28/03/23
Royal Mail bosses have threatened to put the loss-making postal service into administration as talks with striking union chiefs become more fraught.
The company has warned that it could place the regulated part of the business – which has a legal duty to deliver post to every address in the country – into a special form of insolvency if a compromise deal cannot be reached.
Bosses have previously claimed the business is losing £1m a day, with strikes so far by the Communication Workers Union (CWU) blamed for pushing it into a £295m operating loss in the first nine months of its financial year.
The threat to put the postal service into administration, which was first reported by the Guardian, is understood to have come as the CWU is poised to announce further industrial action.
A Royal Mail spokesman told The Telegraph that the company had explained its financial position publicly on several occasions, adding that she could not comment on what had been said during negotiations.
The CWU is demanding pay rises for its 100,000 members to combat the impact of inflation. It opposes key parts of the company’s modernisation programme, including what it describes as moves towards “Big Brother” style tracking of staff.
However, Royal Mail bosses, led by chief executive Simon Thompson, say they cannot afford a bigger pay increase than what has been offered and that the business has no future without an overhaul focusing on the growing parcels market.
As talks continue to falter, they are said to have explored putting the regulated postal service into a kind of special administration – similar to that of energy provider Bulb – with administrators appointed by the Government.
Only the parts of Royal Mail bound by the universal service obligation – which requires the postal service to every address, six days a week, for a uniform price – would be involved, the Guardian reported. Other parts of the group’s parcel operations, including Parcelforce, would be unaffected.
The move would require government approval.
A CWU spokesman said: “It is clear Royal Mail Group is in a serious financial situation.
“This is as a direct result of mismanagement and recklessness at the most senior level of the company. Those individuals who have led the company into this crisis have no right to lead us out of it.
“The company as a whole now has a decision to make – do they reach an agreement with the union or do they continue their relentless and daily assault on postal workers in workplaces across the UK?
“There is no positive future for Royal Mail without the support of the workforce.”
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