Dave Ward appeals direct to Royal Mail shareholders

Postal, Royal Mail Group (EMP) January 24 2023

CWU leaders put their case direct to Royal Mail investors yesterday, urging them to question the company’s strategy and push for a resolution to the ongoing dispute…

In a webinar hosted by Tom Powdrill, head of stewardship at corporate governance consultancy PIRC (Pensions & Investment Research Consultants), people from the business sector heard a detailed summary of the issues at stake and the reasons why the union has been forced into action.

Our general secretary Dave Ward and acting deputy general secretary postal Andy Furey set out the union’s case, supported by head of research Bill Taylor, who presented a series of slides with the facts and figures of the situation. These reminded the audience of the record £758 million profit announced by Royal Mail Group last year, the fact that, even with international division GLS removed from the equation, Royal Mail UK still made £416m and that, last May, the company forecast that profits would fall slightly in 2022/23 but still remain at a healthy £303m.

But that profit forecast fell in October to a predicted loss of between £350m and £450m – a sharp drop which followed a £567m giveaway in dividends and a share buyback during the 2021/22 financial year. The slides also highlighted the high levels of total remuneration received by Royal Mail’s CEO and CFO – £753,000 and £1.3m respectively. These totals included bonus payments of £142,000 (to the CEO) and £847,000 (to the CFO), despite missing important quality of service targets.

The slide presentation set the scene for the conversation to follow, in which our general secretary expanded on the key points at issue. On the change aspect of the dispute, he explained that the company had provoked this by walking away from the Pathway to Change – a national agreement, which was signed up to in March 2021 by our DGSP Terry Pullinger on behalf of the union and by CEO Simon Thompson for Royal Mail.

“But the CEO who signed that agreement has walked away from it,” said Dave, adding that walking away from the Pathway to Change agreement showed “a lack of integrity.”

The union recognised – and has always recognised, our general secretary continued, that this industry cannot face away from change. “And the workforce understands this as well – the CWU has often been at the forefront of pushing to develop new products and services and we’re in favour of change and modernisation. But what the company leadership has recently been putting forward is not modernisation. They’re putting all their eggs in one basket in seeking to become parcels only and looking to shrink the company’s infrastructure.”

This represented a significant point of difference between the CWU and the company leadership, Dave explained, saying: “Where we see the infrastructure Royal Mail has as a competitive advantage which should be used to grow revenues, increase shareholder value and build success for Royal Mail – they see it as a disadvantage.”

The proposed later starts for delivery workers was a key example of this ‘infrastructure-reducing’ perspective, which would mean, he said: “Abandoning the ‘am’ delivery period. And once Royal Mail abandon what is currently its ‘sweet spot’, then competitors will move in on that slot. Letters will not disappear.”

While the union opposes the abandonment of the early-morning period, and of the letters market, it does fully support the development of afternoon shifts, the ‘one-parcel-network’ concept, Sunday working and ‘24/7’ operation in principle. But, our general secretary continued, the company’s current plans to bring in a new workforce on lower pay, worse terms and conditions, and to increase owner-driver and agency resource are staunchly opposed and will not be agreed to.

Once again, it was explained that the already agreed Pathway to Change – with its nine sub sections covering every function of the business and setting out how change is to be discussed, decided upon, implemented, deployed, reviewed and improved – provided a clear way forward through all of this and, once again, it was remarked upon that the company should not have walked away from that agreement. It was the company leadership’s decision to renege on that agreement that had sparked the ‘change’ aspects of this dispute – not change itself.

On pay, Dave pointed out that the company’s claim that it had offered a 9 per cent increase was not quite what it was being presented as – and he reiterated the union’s position that, if a genuine, straightforward 9 per cent pay offer was put forward by the business, this would be taken back to the membership for their endorsement.

Tom Powdrill then fielded questions from the online audience – which ranged from whether the company had been incautious in its financial decisions of last summer, to the impact across the economy of the current dispute, the way that Royal Mail leaders engage with the union and with the workforce, had an error of judgement been made, and was there now a question mark over the leadership of the company?

Dave Ward thanked people for attending the webinar and for their many and varied points and he and Andy Furey responded to each. Dave suggested that the increased share holding by one capital investment group last year – and the heightened speculation around this – may have impacted on the company’s financial decision-making, that a Royal Mail dispute was highly significant in terms of the overall economy, that competitor companies were, to a certain extent, gradually starting to close the gap with Royal Mail on employee remuneration and that “we want to see pay, terms and conditions up right across the sector.”

With regard to the questions on engagement, our general secretary said that the CWU believes that the company’s senior bosses were “taking advice from union busters” and “they’re not seeing their workforce as an asset.” He added: “We would urge investors to ask questions of the company on this.”

One shareholder asked directly: “What is it that you think we can do? What do you want from us that can help to come to a resolution?” and Dave thanked him for his question and replied: “We would want you to raise concerns, do everything possible to get the company to reach a settlement.”

The settlement reached must, he reiterated, align the interests of workers and the company and the customers.