Royal Mail has warned it is set to be ‘materially loss-making’ in the UK this financial year, as its woes are compounded by looming industrial action.
Some 115,000 members of the Communications Workers Union employed by the struggling postal carrier are set to walk out over pay in late August and early September, with no end in sight for the bitter dispute.
Royal Mail is already haemorrhaging the equivalent of £1million in losses every day and it told investors on Wednesday that planned strike action would worsen this situation, which has been primarily driven by a downturn in its letters division and hard-pressed consumers cutting back on non-essential spending.
The CWU rejected Royal Mail's offer of a 2 per cent standard pay rise, with the potential for 5.5 per cent if certain ‘changes’ were agreed, as it argued inflation is soaring much higher than that.
Posties are set to walk on 26 and 31 August, as well as 8 and 9 September, after CWU rejected Royal Mail's latest pay offer
It warned that the most recent pay offer rejected by CWU members would add ‘half a million pounds a day’ to its losses, which ‘can only be paid for with meaningful business change’.
Royal Mail, which said last month it expected to break even in the UK for the year if industrial action is avoided, has stressed the need for modernisation and changes in working conditions.
It said on Wednesday: ‘Royal Mail remains ready to talk with the CWU to try and avert damaging industrial action and prevent significant inconvenience for customers. But any talks must be about both change and pay.
‘Royal Mail has contingency plans in place and will be working hard to minimise disruption and restore normal service as soon as possible.’
The CWU confirmed on Tuesday that 97.6 per cent of voting members had approved strike action on 26 and 31 August, as well as 8 and 9 September.
This was the biggest mandate for strike action reached since the implementation of the 2016 Trade Union Act.
CWU general secretary Dave Ward said: ‘Nobody takes the decision to strike lightly, but postal workers are being pushed to the brink.
'There can be no doubt that postal workers are completely united in their determination to secure the dignified, proper pay rise they deserve.
‘The CWU’s message to Royal Mail’s leadership is simple – there will be serious disruption until you get real on pay.’
In response, Royal Mail described the planned strikes as ‘an abdication of responsibility for the long-term job security of its members’.
‘In more than three months of talks, CWU has failed to engage meaningfully on the business changes required. The negative commercial impact of any strike action will only make pay rises less affordable and could put jobs at risk.
‘The CWU has a responsibility to recognise the reality of the situation Royal Mail faces as a business, and to engage urgently on the changes required.’