Royal Mail Strike – End in sight

by Business Case Studies on Thursday 25th October, 2007

Royal Mail Strike – End in sight

The executive of the CWU (Communication Workers Union) agreed on 22nd October to back a deal with the Royal Mail.The offer includes a 6.9% pay increase over 18 months and is being put to a ballot of CWU members.If the members accept the offer, it will bring to a close the first national postal dispute for over a decade and an end to the series of strikes this autumn which has cost the Royal Mail 'tens of millions' of pounds and provoked anger among small businesses (The Guardian, 23rd October 2007).

The dispute arose from issues of pay, pension reform and changes to working practices, which were central to Royal Mail's plans to modernise its operations and make it competitive with other postal operators and other communications media (The Times, 4th October 2007).The CWU had believed it could lead to the loss of up to 40,000 jobs (The Times, 30th January 2006).

Dave Ward, the CWU's deputy general secretary, said the agreement that had been reached reflected:”the fact that change in the company will only be managed with the union and the workforce. We have made significant gains on pay and related issues and the union's role in negotiating change in the workplace has been strengthened”.(CWU, 22nd October 2007)

John Hutton, the secretary of state for Business and Enterprise, urged CWU members to support their union's recommendation.He told the all-party Trade and Industry select committee that:”the dispute had caused 'significant' damage to business and the wider economy”, adding that:”Some bulk customers may receive compensation.In relation to the Royal Mail we will not be clear about how permanent the damage has been for some time”. Forbs.com/AFX News Limited, 22nd October 2007)

Small businesses also welcomed the agreement. Nick Dines, head of communications at the British Chambers of Commerce, said: “This is good news for small businesses in the UK who have essentially been held at ransom by the CWU. The strike has shown that although in theory the monopoly on delivery has been broken, the reality is that there is no cost-effective alternative to Royal Mail. Management and the union must ensure that crippling strikes like this do not happen again”. (The Guardian, 22nd October 2007)

Take a look at The Times 100 case study about Unison to understand the wider role of unions in business.

Sources:

The Times 100 – Unison Case Study Edition 12, Using Effective Communications

The Guardian – Post strike deal nearly sealed and delivered, 23rd October 2007

The Times – Royal Mail strike Q&As, 4th October 2007

The Times – Unions Fear Royal could lose 40,000 jobs to cut costs, 30th January 2007

The Communication Union – CWU Executive Ratifies National Agreement, 22nd October 2007

Forbes – UK postal union ratifies deal to end strike with Royal Mail, 22nd October 2007

Royal Mail – Industrial Action, 24th October 2007

The Guardian – Union Chiefs to Agree Royal Mail Deal, 22nd October 2007

Unison – At Work

Potential Study Questions

  • What effects might arise for the public and the business community as a result of the series of strikes at Royal Mail?
  • What are the benefits to employees of being a member of a union?
  • Discuss the importance to large national companies of good industrial relations
  • Evaluate the effect of the series of postal strikes on a mail order business, both short term and long term.

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