Royal Mail staff set to strike over pensions blow

Royal Mail workers are on the verge of a historic strike in a huge row over pensions that threatens to jeopardise attempts to modernise the company.

The Communication Workers Union was on Tuesday poised to announce that 110,000 members had voted for industrial action over Christmas – the first since the Royal Mail was privatised four years ago.

Union watchers see the case as the first major test of the Government’s controversial Trade Union Act, which requires strike ballots to have a 50% turnout.

The union was expected to say that it had passed this milestone easily as it fights plans to ditch postal workers valuable final salary pension schemes.

An analysis of the CWU’s own finances, however, suggests it might struggle to fund a strike for very long.

The latest report and account show it ran up a deficit last year of £5.4 million as expenses topped income. The CWU general fund is also £14.5 million in the red.

The accounts reveal that the CWU gave £500,000 to the Labour Party, which some in the delivery sector think ironic since the party hasn’t used Royal Mail for several years, preferring Whistle for its own deliveries.

The union accuses the Royal Mail of a "relentless" programme of cost-cutting to maximise profits.

The union accused the company of "unilaterally" closing its defined benefit, or final salary, pension scheme, with new entrants going into an "inferior" scheme which will leave them in "pensioner poverty".

CWU general secretary Dave Ward said: "Postal workers are under relentless pressure to work faster, harder and cheaper. This has nothing to do with driving growth and innovation, it's all about the tired old thinking of privatisation and asset-stripping.”

A Royal Mail spokesman said: “There are no grounds for industrial action. There is a very good deal on the table. Industrial action – or the threat of it – undermines the trust of our customers. We remain committed to reaching a negotiated agreement with the CWU on pay and pensions, and other issues we have been discussing.”

Royal Mail shares were today steady at 383p. They hit 600p in early 2014.

Royal Mail argues it is operating in the most competitive delivery market in the world, with 16 major competitors including Amazon, which now does one in every ten parcel delivery.

Letter volumes have declined 40% in the last 10 years as people increasingly prefer email. Royal Mail says it has spent £1.5 billion on upgrading its IT systems to cope with the new world of technology.

After one year in the job postmen and women earn £22,764 per year, more than a teacher or nurse.

Royal Mail says under its new proposed scheme, someone aged 50, earning £25,000 per year and retiring at 65 would retire on an annual pension of £12,300 and a tax-free lump sum of £81,800. It says this compares favourably with most other retirement deals.

 

Source: Standard