Royal Mail warns of pay freeze

The Royal Mail today became the latest company to warn its workers that they face a pay freeze this year because of the recession.

The company wrote to trade unions saying it did not envisage being able to increase wage rates for any employees, including postal workers, managers and directors.

The company warned it was facing a "very tight financial position" and said its position on pay would affect the entire group.

The letter said: "Given the tough economic conditions and with the retail price index currently being negative, you will undoubtedly be aware that many other companies find themselves in a similar position of having difficulty in affording increases in pay."



The Royal Mail said the approach to pay will apply to all workers across the Post Office, Parcelforce and other parts of the business.

Unions were invited to a meeting with the Royal Mail to discuss the current "financial challenges" faced by the group.

The letter, sent by Jon Millidge, Royal Mail's human resources director, said the global economic turmoil had worsened the decline in postal markets in the UK and around the world.

The UK mail market is now declining at between 8 per cent to 10 per cent compared to a year ago and for every 1 per cent decline in volume, income is reduced by £7 million.

"The structural decline, in the face of competition from electronic communications, has accelerated significantly in recent months - a trend that is widely expected to continue," it said.





The Communication Workers Union condemned the plan to freeze pay as "appalling" and urged the company to reconsider.

Deputy general secretary Dave Ward said: "Postal workers are first class - they don't deserve this second-class treatment.

"The Royal Mail posted its best financial results for years in December and outperformed all of its financial targets.

"Royal Mail is weathering the recession well and has told staff the value of the company has significantly increased, effectively raising hopes for a decent pay rise.

"The people who run Royal Mail have again misjudged an important decision. For Britain's highest paid civil servant (chief executive Adam Crozier) to impose a pay freeze on workers who earn less than the UK average wage is outrageous. This inequality will lead to strife.

"Royal Mail is attacking the public's postal service by reducing hours and services - now this is a threefold attack on services, jobs and terms and conditions which makes industrial conflict inevitable."

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