Royal Mail to freeze pay for all staff

All Royal Mail staff will see their pay frozen this year as the postal service attempts to cut costs during the recession.

In a letter to trade unions, the company admitted its “very tight financial position” might render it unable to offer any staff a pay rise this year.

In his letter, Royal Mail’s HR director, Jon Millidge, said: “Given the tough economic conditions and with the retail price index currently being negative, you will undoubtedly be aware that many other companies find themselves in a similar position of having difficulty in affording increases in pay.

“We do not envisage being able to increase pay rates for any colleagues (including all directors and managers) across the group.”

Millidge added that previous commitments on pay would still be honoured.

Dave Ward, general secretary of the Communication Workers’ Union, said the decision was “outrageous”.

He said: “Postal workers are first class – they don’t deserve this second-class treatment. Royal Mail posted its best financial results for years in December and outperformed all of its financial targets. Rewarding staff with a pay freeze is appalling. The people who run Royal Mail have again misjudged an important decision.

“For the UK’s highest-paid civil servant to impose a pay freeze on workers who earn less than the UK average wage is outrageous.”

Ward added the decision will make industrial action “inevitable”.

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In February, the government announced plans to part privatise the postal service – selling up to 30% of the business – to ensure its survival and to allow it to compete with private rivals.

In the same month, Royal Mail was forced to deny it was planning a wave of redundancies after managers were sent a letter calling for 10% efficiencies to be made.