Monday, 19 October 2009

Don't bash the posties

The answer to Royal Mail's problems is not to bash the workers The increasingly bitter mail dispute reached a new low recently when the Communication Workers Union (CWU) announced it would be taking national strike action.The dispute has been escalating since the summer with sporadic strikes across the country. Ironically, the dispute began when the Government announced acceded to the union demand that it would not be proceeding with its plans for part privatisation.
At that time the union offered to sit down and talk with Royal Mail (RM) over a set period with no strikes in order to try and resolve differences over modernisation and the development of new products. RM refused and relations between management and workforce have got increasingly worse ever since. The CWU have accused RM of breaking previous agreements, imposing cutbacks and deploying bullying tactics. RM accuse the union of breaking agreements and opposing change. The dispute has not actually been about any demand for more money.As the situation has deteriorated so strikes have mushroomed with London being particularly hard hit. As a result a massive mail backlog has built up in warehouses around the land. Public support for the postal workers is not thought to be high, due in part no doubt to the way that much of the media has reported the dispute. The narrative has largely been one of unreasonable workers opposing modernisation of the business at time of economic recession. The pressure that the mail strike is putting particularly on small businesses is regularly quoted, with vital payments and products not getting through. This claim is no doubt true but on the other side of the equation, postal workers earning less than £15,000 a year do not go on strike for nothing. They will lose money, putting their families under pressure, so there must be substantive issues at stake. The vote of 76 per cent in favour on a 67 per cent turnout suggests that a lot have been driven to the brink.The lack of sympathy among the public also locks into another media driven truth that public sector workers are in a priveliged position with better pay, terms and conditions. The recession has been used as a prop to argue that these benefits need to be taken away from the public sector to bring them down to private sector levels rather than the other way round. For mail workers this would mean getting the minimum wage and having all security of employment destroyed. Lower paid workers both in Britain and Ireland it would seem are increasingly expected to take up a disproportionate amount of the pain for an economic crisis caused by reckless bankers. The bankers meantime seem to continue with business as usual.Much has also been made of alternative companies coming into take over RM business. This is pretty much a total myth. Since the mail market was opened up to competition in 2006 private companies like DHL, TNT and Business Post have come in but only to take business mail. Business mail is where the profits are to be made, residential deliveries are loss making. Previously, RM would use the profits from business mail to subsidise the loss making residential delivery side. The private companies were allowed to come in and cherry pick the best contracts without picking up any of the universal service obligation to deliver mail across the board. This development, together with the historic £4 billion plus pension deficit, underlies many of the problems that RM has at present. However, despite the opening up of the market, the final mile of delivery for the private companies is still done by RM. So a private company will pick up mail from the customer but then deliver it to RM which for a price delivers at the other end. So the idea of there being lots of alternatives to send mail via is a complete illusion. There are obviously courier style services but at £20 plus a go it seems unlikely that any business small or large could employ them for routine deliveries and stay afloat for long.Another underlying problem with RM is that its management under the leadership of former Football Association chief executive Adam Crozier has been committed to privatisation of the business. Privatisation would see many senior managers being rewarded handsomely and the failure of the most recent plan to go through has no doubt added to the resentment that many feel toward the CWU.It is against this background that the postal dispute continues to escalate. Mail remains a largely manual industry that is gradually becoming more automated. Both RM and the CWU accept that this has to happen, the outstanding question remains how. The management believe it is their perogative to manage, while the union want to be part of a genuine consultative process. The whole RM business though is being penalised by the preferential treatment being given to the private companies that can take their pick of the business post without taking any of the obligation to deliver loss making products. If this situation were resolved and Government picked up the RM pension deficit – made largely as a result of a 13 year pension holiday during the 1990s and stockmarket downturn - then the company could compete and no doubt provide a better service for the public. A management that was committed to providing the service in the public sector and not constantly looking for privatisation would ofcourse help.The present mail dispute is certainly not intractable. All the sides need to get round the table to talk but there also need to be fundamental changes made to RM management and a resolution to the pension deficit issue if things are to genuinely move forward rather than splutter along to the next dispute

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