Royal Mail Staff Vote in Favor of Strike Action Over IPO
Royal Mail Group Ltd. workers voted for strike action less than a week after the U.K. postal service’s 1.7 billion pound ($2.72 billion) initial public offering, which unions say will put jobs at risk.
Some 78 percent of respondents backed a walkout, which will take place on Nov. 4 unless a deal safeguarding employment is reached before then, the Communication Workers Union said in a statement today. The vote attracted a 63 percent turnout of 112,000 Royal Mail (RYE) workers, the labor group said in a statement.
Royal Mail shares, sold to investors for 330 pence in the U.K.’s biggest state asset sale since British Rail was broken up in the 1990s, have climbed 44 percent to 473.75 pence since the company’s Oct. 11 trading debut. The IPO sparked a public spat, with the opposition Labour Party querying the management of the sale given the sharpness of the gain, and many union members vocally opposing privatization of a profitable business.
“Postal workers have spoken very clearly that they care about their jobs, terms and conditions far more than they care about shares,” CWU Deputy General Secretary David Ward said in the release, referring to stock that’s been allocated to staff for free. “Postal workers will not be the people who pay for the profits of private operators and faceless shareholders.”
One of the country’s largest employers with more than 150,000 staff, 360-year-old Royal Mail has shifted away from letters to package shipping spurred by a trend toward web-based purchasing. The company’s rivals include TNT Express NV (TNTE) of the Netherlands and Deutsche Post AG (DPW)’s DHL Express.
Prime Minister David Cameron “hopes that industrial action won’t go ahead,” the premier’s spokesman, Jean-Christophe Gray, told reporters in London. “It isn’t necessary; it should be talks and not strikes to resolve issues.”
The postal service has a 53 percent share of U.K. parcel deliveries and reported revenue of about 9.1 billion pounds in fiscal 2013. Its operating profit, after some costs, was 440 million pounds.
The CWU union said today it’s seeking a long-term, legally binding agreement to protect job security, pay and pensions.
Workers want guarantees preventing a further breakup of Royal Mail and franchising of offices and delivery routes. The CWU also wants measures to limit part-time working and warned against the introduction of two-tier employment contracts that could introduce cheaper employees under different terms.
“Any action, or the threat of disruption, is damaging to our business, especially in the run up to Christmas, our busiest time,” Royal Mail said in a statement. The company said it has offered the union a three-year legally-binding and enforceable contract, as well as an 8.6 percent increase in salary, allowances and overtime payments during that period.
Royal Mail’s IPO was the largest in Europe since April 2011, when Glencore Xstrata Plc (GLEN) raised $10 billion in its London listing, according to data compiled by Bloomberg. The sale of the postal service was fully subscribed within hours of opening on Sept. 27.
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