National postal strike: Counting the costs

Industrial relations at the Royal Mail have always been fraught, but the modernisation programme initiated by the organisation in 2002 to address losses that were running at £1m a day has seen unions and management drift further and further apart.

This week’s announcement of national strike dates by the Communication Workers Union (CWU) hasn’t helped the situation. This latest dispute centres around the CWU’s claim that the Royal Mail is imposing changes onto postal workers, cutting jobs and pay – which, it says, is leading to a worsening service.

But the Royal Mail, which employs 176,000 staff, of whom 121,000 are frontline postmen and women, insists that managers are merely implementing an agreed deal between the two sides to modernise the service that was drawn up after the last national dispute in 2007.


In what it described as a “last-ditch attempt” to avoid a national strike, the CWU wrote an open letter to Royal Mail managing director Mark Higson on 13 October, demanding assurances on issues including consultation on the modernisation programme, workload, pay, and bullying, and calling for third-party mediation to resolve the dispute. But the Royal Mail claimed the move was merely a “fresh set of demands” and the national walkout looks set to begin on 22 October.

The lack of trust between the two sides was illustrated by the union’s suggestion that Royal Mail has been recruiting agency workers in several parts of the country to stand in for postmen and women in the event of national strikes going ahead. Royal Mail rejects this, insisting that extra workers are always hired in the run-up to Christmas. The union is also calling on the government to deal with the Royal Mail’s multi-billion pound pension deficit.

But whatever the rights and wrongs of the argument, the dispute is undoubtedly having a negative impact on the reputation of both sides. Last week, a British Chambers of Commerce (BCC) survey of 250 small and medium-sized companies revealed that almost 90% were concerned about the planned postal strike, while 75% were looking elsewhere for a more reliable service. Meanwhile, major customers including John Lewis, Argos and Amazon have confirmed they are considering alternative delivery options.


And while posties can generally count on the goodwill of the public, mountains of undelivered mail – particularly in the run up to Christmas – will see that quickly ebb away. The BCC described the CWU’s call for strike action in the run-up to the busy Christmas period as “akin to a death wish”, while business secretary Lord Mandelson said it was “a suicidal act”.

One mail industry source told Personnel Today that the CWU was playing a “politically dangerous game”. “Every negotiation turns into a question of ‘how much are you going to pay for change’,” the source said. “But a different government will take a different view. If the union does not do a compromise deal with this government, it will find itself with much less control if and when the government changes.”

Negotiating with union officers is just one of the challenges that the Royal Mail HR team faces when these disputes occur. With an estimated 18 million letters going through the system every day, any strike leads to a massive backlog, and it is up to the HR team to work with managers to organise the resources to clear it – without the option of turning to overtime (which would, in effect, be a reward for striking) or agency workers (which is seen as illegally undermining a strike).


The dispute highlights how tough it can be for HR departments to handle large-scale change, with the key lesson being improving communication, according to Angela Baron, adviser on engagement and organisational development at the Chartered Institute of Personnel and Development.

“It’s about making sure that, at every stage, you provide really good communication to employees on exactly how the change is going to affect them, as they are going to be frightened and nervous about the future,” she said. “This way they are more likely to stay with you. You need your staff to perform when going through change so they need to be engaged.”

Baron concedes that keeping staff on-side at a time when job cuts are being made was a “tricky tightrope”, adding that it was not surprising that so many organisations make mistakes.

And while the CWU has faced some fierce criticism for the timing of its ballot, Baron said that unions “exist to protect the rights of individuals, in particular protecting jobs”. She added: “Protecting jobs shouldn’t be too far away from what employers themselves want.”

But there is little sign that the CWU and the Royal Mail will be on each other’s Christmas card list anytime soon, and, unless compromise can be reached, the only way to resolve the dispute will be “the fight of all fights”, according to the mail industry source. “At some point, the government will have to take them on, like the miners.”

Potential cost of a national postal strike

  • UK economy: £1.5bn
  • Online retailers: £220m
  • HMRC: £920m, if forced to waive a £100 penalty per person for nearly one million expected late tax returns
  • Smaller or less financially stable companies could go under, according to the Centre for Economics and Business Research
  • 25% of businesses will have to find alternative means of sending business items, incurring higher costs.

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