Britain's Royal Mail avoids staff boycott, for now

By Neil Maidment

LONDON, June 28 (Reuters) - Britain's Royal Mail said it hadreceived an undertaking from the postal workers' union not toinduce its staff to boycott competitor mail, avoiding apotential headache ahead of its forthcoming privatisation.

Royal Mail had sought an injunction against a possibleboycott after members of the Communication Workers Union (CWU)voted 92 percent in favour of supporting such action in aconsultative ballot earlier this month.

The union said on Friday it had accepted legal advice not toundertake a boycott based on the ballot result alone, but wasconsidering how action could be taken in future.

The CWU believes private sector rivals such as TNT Post,owned by Dutch mail group PostNL and which wants tolaunch a full rival UK service in five years' time, couldundermine Royal Mail's ability to maintain a universalnationwide service by creaming off the most profitable services.

Postal regulator Ofcom has said it would intervene if directcompetition threatened Royal Mail's universal service.

A boycott could have involved 26 million items a day -including bills, statements and business mail contracts won bycompanies including TNT Post and UK Mail - goundelivered, dealing a serious blow to Royal Mail's business.

An initial public share offer (IPO), which could value RoyalMail at between 2 billion pounds ($3 billion) and 3 billion, isexpected later this year and banks have been appointed to runthe flotation.

The CWU opposes the privatisation, arguing it will lead to aworse deal for customers and staff.