Royal Mail chiefs to meet staff in bid to avert strike over pay

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The Independent Online

The Royal Mail will this week meet hundreds of senior managers and their union representatives as the state-controlled postal giant seeks to prevent a walkout over pay.

Its chairman, Allan Leighton, and chief executive, Adam Crozier, will meet the staff on Wednesday and Thursday. Dave Ward, deputy general secretary at the Communication Workers Union (CWU), will also be present.

Mr Leighton and Mr Crozier have held meetings with their managers before, but this is the first time that union representatives have been invited to accompany them.

"It will be very different and I'm sure it will get sparky from time to time," said one senior insider. "But I would rather that if it allows us to get everything out in the open. If we strike now, we would lose 10 per cent of our business in the first week. There's now an alternative [to the Royal Mail]. What are companies going to do, not send out their mail?"

The CWU has rejected a 2.9 per cent pay rise, claiming this will not bring salaries into line with the national average. It was further angered when the Royal Mail went ahead and imposed the pay offer on staff, despite the union's rejection.

Talks between management and the CWU are continuing, but workers say that the union plans to notify the Royal Mail tomorrow that ballot papers are being sent out.

The Royal Mail claims it cannot afford to pay any more than 2.9 per cent. However, it has offered to pass a proportion of the savings from its latest cost-cutting drive on to workers. Under the leadership of Mr Leighton and Mr Crozier, the Royal Mail has been returned to the black. Earlier this year, it reported a rise in full-year pre-tax profits to £609m.

It has also won some key concessions from the Government. It was recently granted permission to use a ring-fenced £850m to prop up its pension deficit. In addition, the Government agreed to lend it £900m.

But some challenges remain. The market was opened up to competition on 1 January, ending the Royal Mail's monopoly, and insiders say the company is already losing business as a result. Its pension fund deficit remains significant at £5.6bn, and management recently agreed to raise annual payments to the fund from £480m to £750m.

As well as the increasingly bitter row about pay, the union is unhappy at Mr Leighton's plans to offer shares in the company to staff.