Reasons for the 2009 Postal Dispute from a CWU rep.

2 Conversations

As the resident CWU rep in these parts I have been scanning "ask" for some Royal Mail dispute threads for a while. Of course been pretty busy of late so happy to debate any of these issues with anyone here, but I’m sure everyone will understand that I may not be able to get back to them right away!

In terms of the current dispute notice lots of people say (both here and elsewhere) that they don’t really know the reasons why this is happening so I thought I would take the liberty of explaining it.


Well the core of this argument is what is meant by modernisation and what has been agreed. Anyone following the dispute in the news will have repeatedly heard Royal Mail saying that we “agreed” to the current modernisation in 2007.

For anyone who had sleeping difficulties I am happy to provide an electronic copy of the 2007 pay deal, highlighting the relevant passages. But put simply the deal was in four “phases”, effectively pay in exchange for major change. Each of the first three “phases” were linked to specific measures in changes to working practices on an office by office, or overall business performances which had to be jointly audited and signed off in exchange for basic pay increases.

This happened for * every * office in the UK, having been signed off by Royal Mail HQ, every uniformed member of staff received a letter thanking them for having implemented the changes and all received both phases of the pay and a modernisation related bonus.

What was supposed to happen in “Phase 4” was a number of joint working groups to move forward on issues such as pay and remuneration, new delivery methods, automation, shape and size of the business etc...

This phase would have continued the process of major change in exchange for pay, the underlying principal of how the business and its workers can embark together on radically transforming the business.

What actually happened was that the business walked away from Phase 4 and instead embarked on a massive program of arbitrary cuts that were not agreed with the union by “executive action”. That is where the business says to us “no negotiation this is happening” .

Frankly guys when the business say no talks we are going to impose changes by diktat that will cost some of you as much as £100 a week then at least with my union that is only going to lead to one thing, people outside the front gate. I for one do not apologise for standing up for my rights, pay and job.....

But this runs much deeper; it really is about what is modernisation....

I for one do not see anything particularly modern about us moving from 2 deliveries a day to just one. I do not think it is particularly modern to not collect mail on Sundays, or to deliver mail at three in the afternoon. I do not think it is particularly modern to close thousands and thousands of rural post offices.

What I, and my union, think modernisation entails is bringing in new technology and working practices to give the same or better services for less money. Making the business efficient, whilst at the same time looking after those who will inevitably leave and rewarding those who remain based on the greater productivity of the business.

This is clearly not Royal Mails plan. Royal Mail are simply looking to manage decline, slash and burn and cut service. Bottom line the CWU see the Royal Mail as a service and the royal Mail management do not.

One thing that really p*sses me off is where the govt and Royal Mail continually try to portray us as knuckle draggers who are against change (we are knuckle draggers in some ways mind!). In the last five years nearly 70,000 jobs have gone by a process of agreed change. Anyone who reads the media might imagine some sort of Victorian operation in the way we process mail but “Mail Centres” are incredibly mechanised and in 100 years the CWU and its precursor unions have NEVER taken industrial action of automation.

In fact we are ready and willing to reach an agreement over the introduction of the new “walk sequencing machines” the new technology that will transform the way we delivery mail (and cut tens of thousands of jobs to boot). However Royal Mail has not only not taken us up on this offer, but further they have cancelled orders for the machines.

So the question really is do we want a decent postal service or not?


There is no getting away from the fact that the Royal Mail pension deficit is a massive factor in what is going on in Royal Mail. The deficit is currently at 5 billion and we are expecting that Royal Mail will shortly (at the most appropriate time) announce it has risen to nearly 10 billion. Clearly servicing a debt like this is a huge challenge.

But is there really a ten billion deficit? Frankly no this is predicated on a newish system of assessing pensions. What happens is they look at if tomorrow every penny that was owed had to pay out would there be enough assets in the scheme to cover this.

Firstly this just won’t happen, I have 36 years before I will claim any pension, and many members have longer to go. So actually there is plenty of time to resolve issues around deficit, and it is disingenuous to measure pensions the way we do (thanks Supreme Leader Brown).

Secondly we are measuring the overall value of the pension’s asset in the middle of what has been described as the biggest depression since the 1930s, pension schemes are a long term investment (like I said 36 years before I can claim mine). No one is going to have to write a cheque for £10 Billion tomorrow so this is just being used as a political football.

Thirdly (and I don’t wanna sound like I am whining but....) this isn’t our fault. For 13 years when the pension was in surplus the company took a “pensions contribution holiday”. They didn’t pay their share for a long time and this has contributed to us being in the difficult situation we are in. It seems grossly unfair that we should be asked to pay for errors made by the management and the government.

Fourthly this is an issue that requires a public policy solution, we cannot resolve this with the company, in fact there is a cross party consensus that something needs to be done about the pensions deficit. Just no agreement about what goes with it (more on that later!).

The point needs to be made that we are not asking for a favour here, as is being portrayed in the press. The government are our sole shareholder. As the owner of the company they have responsibility for it. Public coffers benefitted for years from money paid in whilst the pension holiday was taking place. Lastly if and when Royal Mail is privatised then the government would, as they always do, offer a crown guarantee on the pension scheme to make the company sellable. Bluntly they will eventually deal with this so it is a misnomer to imagine that this has to be dealt with at company level with the union.


I’ll keep this brief but there is no point in hiding away from the fact that pay is an issue. Where the business triumphantly pronounce the biggest profit they have ever made, and tell us how for the first time in 20 years all four parts of the business were in profit. Where they reward there chief executive for this profit by making him the highest paid civil servant in the country. Then say “Sorry pay freeze for “you” this is inevitably going to be an issue.

The truth is we have to be realistic about the situation and circumstances, the fact that RPI is negative etc... but Royal Mail were not prepared to talk to us about anything, including the wider benefit package, net working week, or shared efficiencies savings.

On top of this is them expecting us to shoulder increasingly unrealistic workloads for no extra money, or in some cases actually much less. Workload is a really big issue, and one that the company say they are not prepared to talk to us about. They say they want an agreement on a “new delivery methods” but are un prepared to talk to us about what this entails.

We have offered repeatedly to the business for us to agree to an independent assessment of work load, to determine what is fair and reasonable and use this independent assessment as the basis for a new agreement. They have flatly rejected this and say “it is for us to determine what is fair and reasonable.”

Now given that they normally try and ram “bench marking” down our throats at every opportunity I guess there is a reason why they are not keen on this. They are working backward, they want to be able to make budget cuts in offices that are not related to the actually workload that is done. This is not fair, and not sustainable.


A bit of history lesson here...

Back in the distant past of the late 90s a new Labour government was elected. Amongst their number was a young lad who still at this point accepted the need for elections in a democracy called “Peter Mandleson”.

Now our favourite confuser of “mushy peas/ guacamole” had a dream, and that dream was to privatise the post office. This he tried to do, but unfortunately was turned over by the union and the parliamentary labour party who thought this would be unpopular and was fundamentally wrong (funny how history repeats it’s self).

Now “our Pete” wasn’t very happy about this and wanted to create some of the conditions to allow this in the future. A report was commissioned by the now discredited accountancy giant Arthur Anderson which basically concluded competition would not affect service (see an entry I wrote about this a few years ago A1154765).

So it was decided to introduce competition in the UK much earlier than it was due to be introduced elsewhere. Obviously our government wanted to show those awful Europeans that “state aid” was a bad thing by introducing some active state hindrance to show them how it should be done .

Anyhow a regulator Postcomm was set up and Postcomm did some sums and concluded that the postal market would grow year on year for the next 10 years, and that no more than 15% or Royal Mails business would be taken by the competition.

Now this manifestly wasn’t the case, mail volumes were not steady and the competition took far more business and it was clearly undermining the ability of Royal Mail to offer a universal service. So the CWU asked the government to conduct a review into the postal market which they did, getting a chap called Richard Hooper to investigate this.

Now in the middle of last year Hooper released an interim report that basically concluded the obvious, that regulation of the industry was skewed in favour of increased competition against the necessity of universal public service. That this needed to change. That the basis on which the rules were set was based on incorrect assumptions.

Further it stated that the management of the company were not capable of dealing with the industry and the unions, and that industrial relations had to improve for the business to have a future. All pretty fair to be honest.

However and now not so young Mandleson, who had decided that elections really were an overrated nuisance was bought back into government to shore up the position of our dear Supreme Leader who was about to be ousted in a Blairite coup. He became Lord Mandleson and the de-facto deputy prime minister.

One of the first orders of business was to get the Hooper report re-written to remove the stuff about regulation and competition and make it clear that privatisation was the answer. Funny how history keeps repeating.

Anyhow this is where it gets interesting, we said “no” and had the temerity not only to fight privatisation but to actually... gulp... you know win. Old Mandy did not like this, not at all....

So what happened next was effectively Mandleson used the same management he had previously said were incapable of running the company to attack the union as a proxy. When Dave Snooty mentioned militancy had increased since the privatisation was knocked back he was half right. But the truth is this was managed and cheered on by the government. You might have seen a big report on newsnight last week about a leaked presentation proving government collusion with Royal Mail.

Bottom line is IMHO it is not too strong to say that we the CWU are the white whale to Mandlesons Ahab. He really dislikes us, and well this dispute is payback.


Right straight from the top things have to change from us the union. We need to break the cycle of industrial unrest as there is no future for our industry, company or members if something cannot be done to arrest the cycle of industrial unrest.

As a union we have to look at some of the things we do and accept that we have to change the way we do business, it is a fact and one we cannot afford to ignore. But the truth is it takes two to tango, and our employer is determined to cause trouble.

Recognising this we wrote to the company at the turn of the year to offer an industrial relations summit. Given we were both criticised we felt it was an opportune moment to make a fresh start and try and solve some of the issues facing the company together. Royal Mail flatly refused to participate.

Later as the dispute escalated in the summer our conference voted unanimously in June for a ballot for national industrial action (In June mind, did not happen for months as we tried to resolve the issue). We offered Royal Mail what we thought was a fair offer:-

If they would agree to stop imposing change by diktat for three months we would cancel all outstanding industrial action for three months to try and have intense negotiations to resolve the issue. Again Royal Mail flatly refused.

In the middle of July as we came closer to having to call a national ballot, we again repeated the offer this time for just two weeks. Royal Mail once again flatly refused. This is I suggest not the attitude of a company serious about getting a deal.

For weeks we have been saying to Royal Mail and the government that we are happy to go to ACAS to have independent mediation with NO PRE CONDITIONS. But Royal Mail have again refused this, they will only go to ACAS if they can pick and choose what issues will be discussed.

Lastly on Tuesday night at around midnight our negotiators and Royal Mails had agreed an in principal form of words which should have been the genesis of a deal and would probably have allowed us to suspend the IA called for today. First thing on Wednesday we received a letter from Royal Mail’s managing director Mark Higson over ruling the negotiators, and retracted from what had been agreed.

It simply isn’t possible for us to negotiate with people who do not have the authority to speak to us, and it seems that what we have suspected for months, that Adam Crozier, Mark Higson and Lord Mandleson do not want a deal, is the case.

The Question has to be where can we go from here? We don’t want to be in a national dispute it costs our members and our union huge amounts of money. But we have been backed into a corner where we have little choice.

But the truth is our members voted by 76/4% for national industrial action. This is despite some of our members having already take 16 day industrial action that is a massive amount of money to lose. And let’s face it nobody is going to do that without good reason.

I have not even gone into the bullying and harassment of trade union activists and active members, which is a massive issue but hard to explain here. Basically unless there is some will to actually resolve this from Government we are facing an awful and bitter dispute in which there will be no winners.

Bluntly for my two cents I think what Crozier and Mandleson want really is to smash the union, and to de-recognise us. I don’t think Mandleson likes the idea of working people defending their terms and conditions, form their point of view workers are no different from the vans, building, bikes, computers and sorting machines. They don’t negotiate with the articulated Lorries so why do so with the staff....

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