Royal Mail bosses threaten to declare insolvency as pay talks near collapse
Long-running talks between Royal Mail and the Communication Workers Union are on the brink of collapse, with the company’s board thought to have threatened to put the loss-making postal service – the regulated UK entity that delivers to every address in the country – into a form of administration if a deal cannot be agreed.
A politically explosive move to declare the postal service insolvent is regarded by Royal Mail’s board as a last resort but has been raised with the union already.
“We are aware of the speculation,” said a Royal Mail spokesperson. “If we have anything to add to our previous financial statements, we have an obligation to do so.”
Royal Mail is on course to make operating losses of £350m-£400m this year, its parent – the recently renamed International Distributions Systems (IDS) – has previously said.
After 18 strike days in 2022, talks reopened in the new year and the union paused industrial action, saying the company had made “significant moves” towards a potential settlement. Brendan Barber, a former general secretary of the TUC, was brought in as a facilitator for the talks.
But hopes of a deal have faded over the past week. Sticking points include not only pay but also changes to working practices, with the company arguing the two are interdependent.
“This dispute is truly at a crunch point,” the CWU’s official account tweeted last week. If talks do fail, the union’s national executive is due to meet in the next few days to consider more industrial action, for which a mandate was overwhelmingly secured in February.
It is thought the boards of Royal Mail and IDS still regard a negotiated settlement as the preferred way out of crisis, but a special administration under the Postal Act has been explored. This
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