RMG.L Regulatory News (RMG)

Royal Mail plc

(Incorporated in England and Wales)

Company Number: 8680755

LSE Share Code: RMG

ISIN: GB00BDVZYZ77

LEI: 213800TCZZU84G8Z2M70

22 September 2022

UPDATE ON INDUSTRIAL RELATIONS IN ROYAL MAIL

Royal Mail is today providing an update on industrial relations. After five months of talks, including three dispute resolution procedures, no agreement has been reached with the Communication Workers Union (CWU).

As previously announced, Royal Mail made a loss of £92 million in the first quarter, equivalent to approximately £1 million a day. Royal Mail needs to adapt much faster to adapt to changing customer demands in a highly competitive market. The CWU has blocked any meaningful discussion on the change agenda the company has set out, and has not put forward any viable alternatives that will fund further pay increases. 

Given the lack of progress made, and the ongoing damaging impact of industrial action on the business and customers, Royal Mail has today taken two steps to break the impasse and ensure it can move ahead with its transformation at pace:

· Firstly, Royal Mail has written to CWU to propose that talks should be taken to Acas (the Advisory, Conciliation and Arbitration Service) in a further attempt to find a resolution.

· Secondly, Royal Mail has informed CWU that it wants to modernise the ways of working with them. As part of this, Royal Mail will review or serve notice on a number of historic agreements and policies which are currently being used by the CWU to frustrate transformation, and intends to move to a more modern industrial relations framework designed to make the business more agile, and able to compete more effectively.

Over many decades, a complex web of CWU agreements and structures has developed at Royal Mail. For example, the Agenda for Growth agreement, signed at the time of privatisation, is the only agreement of its kind in the UK that includes certain legally binding undertakings. This was designed to ensure long term stability and growth, including industrial stability. The agreement entitles Royal Mail to give notice on certain undertakings in the event that CWU takes national scale industrial action. To date, CWU has taken national industrial action on three dates - 26 August, 31 August and 8 September 2022, and has announced two further strike dates on 30 September and 1 October 2022. 

Royal Mail is not changing quickly enough, a reflection of the unique, complex, costly and highly restrictive union agreements and structures built up over many years. By taking steps to modernise agreements and ways of working with CWU, it will allow Royal Mail, among other things, to:

· speed up decision making on a daily basis - currently CWU Reps in units across the company negotiate and allocate overtime, annual leave and the hours that people work;

· trial and introduce new technology more quickly - Royal Mail has invested tens of millions of pounds in new technology to improve the customer experience, but has been restricted from using the information to improve performance and safety;

· revise attendance policy to address persistent instances of short term absence;

· reduce complexity and cost - we will review the commercial and IR agreements governing the current CWU structures in Royal Mail to ensure arrangements are fit for purpose;

· remain competitive and retain our position as the best employer in our industry, with the best pay, pensions and conditions.

To do this we want to work with CWU on what new, modern, ways of working between the two will look like. These changes are important steps towards modernising the industrial relations framework. They will allow Royal Mail to move from a system where the CWU has many powers to veto and block change, to a more consultative relationship.

The business can then move forward on its change agenda to remain competitive for the long term, a necessary step to securing Royal Mail's future.

Enquiries:

Investor Relations

John Crosse

Email: investorrelations@royalmail.com

Royal Mail investor relations line: 020 7449 8183

Media Relations 

Mark Mann

Phone: 07483 144 684

Email: mark.mann1@royalmail.com

Jenny Hall

Phone: 07776 993 036

Email: jenny.hall@royalmail.com

Royal Mail press office: press.office@royalmail.com

Company Secretary

Mark Amsden

Email: cosec@royalmail.com  

FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements concerning the Group's business, financial condition, results of operations and certain Group's plans, objectives, assumptions, projections, expectations or beliefs with respect to these items. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should', 'expects', 'believes', 'intends', 'plans', 'potential', 'targets', 'goal', 'forecasts' or 'estimates' or similar expressions or negatives thereof.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Group's actual financial condition, performance and results to differ materially from the plans, goals, objectives and expectations set out in the forward-looking statements included in this document.

All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to the Group or any persons acting on its behalf are expressly qualified in their entirety by the factors referred to above. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. No assurance can be given that the forward-looking statements in this document will be realised; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Subject to compliance with applicable law and regulation, the Group does not intend to update the forward-looking statements in this document to reflect events or circumstances after the date of this document, and does not undertake any obligation to do so.