RM TO ANNOUNCE PAY FREEZE

[BELIAL]

Why should RM give a pay rise this yr? thankfully everyone has a secure job and pension which is alot compared to most people at present. The profit made by the RMG was not alot once you take into account the POL subsidy so its probably the right decision given that the cost of inflation &RPI is falling.

:lfo

[TrueBlueTerrier]

Why should RM give a pay rise this yr? thankfully everyone has a secure job and pension which is alot compared to most people at present. The profit made by the RMG was not alot once you take into account the POL subsidy so its probably the right decision given that the cost of inflation &RPI is falling.

Because the last pay rise was in effect a pay cut - 1.7% when inflation was at 3.5%

RM want their cake and to eat it, and then when there done they raid our larder as well. Welcome to profit is king and service is a pawn.

Still who is surprised that our Share in Success is another kick in the teeth. :cfo :mfo :lfo

It does annoy me though why is it the right decision for a pay freeze or below the rate of inflation pay increase for workers, yet business "leaders" are still getting amazing bonuses and severance packages. Both cant be fair.

[lovejoy]

RMs Brief to staff....................


Briefing
Pay 2009/10
April 24 2009

Key messages
• Today, Royal Mail Group has written to the unions (CWU and Unite CMA) informing them that we do not envisage being able to offer any increase in pay this year for any colleagues (including directors and managers) across the Group.
• This is due to the impact of the economic recession and the accelerating decline in letter volumes.
• Many companies, including our competitors, have made the same decision, especially in light of the retail price index declining sharply (RPI is currently negative). It is not a decision that has been made lightly.
• While it is true that across Royal Mail Group we did reasonably well financially last year, volumes continued the earlier trend of decline in the first nine months and the trend worsened because of economic factors during a difficult fourth quarter.
• Despite our scale and size the Letters business is the least profitable business in the Group and we expect this year to be even more difficult.

Why?
There are huge challenges that face us this year and beyond:
• All over the world mail markets are falling sharply as customers use cheaper communication methods such as email and text.

• Overall the amount of money we received from our customers in Royal Mail Letters has reduced compared to the previous year, despite a tariff increase.
• Going forward, we expect a further decline in volume as the recession hits. Addressed mail volumes in the UK have fallen by 8-10% in the final quarter on 2008/09 and they are expected to continue to fall
• Every 1% decline in mail volumes reduces our income by £70m per year.
• We are seeing and expect to continue to see growth in packets - but this simply won’t make up for the short fall in more profitable mail.

What does this means for us?
• We will continue to pay the ColleagueShare dividend and all agreed incentive and bonus schemes for 2008/09 if we have hit our targets and following publication of the report and accounts.

• The 2008/09 ColleagueShare dividend payment for everyone will be £400 if Letters and Group hit their profit targets.

What next?
• We recognise that people will be disappointed by this news.
• We will continue to discuss the issues and challenges facing our business with the unions

[TrueBlueTerrier]

THEY HAVE ALSO MADE A PRESS RELEASE AS WELL:

24/04/2009


Royal Mail Group has today written to its unions about the company’s current position on pay. The text of the letter to the Communication Workers Union is given below. A similar letter has been sent to Unite.

-----------------------------------------------------------------------------------

Dave Ward
Deputy General Secretary
Communication Workers Union


Dear Dave

PAY IN ROYAL MAIL GROUP

I am aware that you and your colleagues have written to the different business units with your requests for changes to pay with effect from the beginning of April. Each business unit will respond, but I thought it was appropriate for me to outline the current issues facing the whole group at this time as a result of the current worldwide economic downturn.

The global economic turmoil has exacerbated the structural decline in postal markets in the UK and around the world, with the UK mail market now declining between 8-10% compared to last year. You will be aware from our briefings to you that every 1% decline in volume reduces our income by £70m pa. This structural decline, in the face of competition from electronic communications, has accelerated significantly in recent months - a trend that is widely expected to continue.

For Post Office Ltd, the volatility in the financial services market is clearly taking its toll on our new range of financial service products whilst at the same time our traditional core products (including mail services and benefit payments) continue to decline.

The worldwide parcels market has also come under severe pressure from over capacity and the economic situation depressing volumes. These two factors have caused prices and margins to decline sharply.

Against this backdrop, despite the improved financial performance in the year just finished, the company is facing a very tight financial position and we do not envisage being able to increase pay rates for any colleagues (including all directors and managers) across the group as a result of this coming year’s pay review.

Given the tough economic conditions and with the Retail Price Index currently being negative, you will undoubtedly be aware that many other companies find themselves in a similar position of having difficulty in affording increases in pay.

We will however honour commitments previously given as part of the 2007 deal in Post Office and any other specified increases already agreed.

This approach to pay will apply to all colleagues across Post Office, Parcelforce, Royal Mail and the Group Centre.

We will also honour our commitment to pay the ColleagueShare dividend and to honour agreed incentive schemes for colleagues for 2008/09 assuming that the targets have been achieved, and following the publication of our results.

I am sure that each of the business units will wish to discuss this with you but in the meantime I will invite you to a meeting with Ian Duncan [Group Finance Director] and myself to discuss the current financial challenges that the group faces.
Yours sincerely,


Jon Millidge
Group HR Director

-----------------------------------------------------------------------------------

Ends

Issued by Royal Mail Group:
148 Old Street
LONDON
EC1V 9HQ
http://www.royalmailgroup.com" onclick="window.open(this.href);return false;

[DGP1]

Any chance of a shorter working week if we're not going to get a payrise

[redgateman]

Just seen this on my local CWU website

ROYAL MAIL GROUP ANNOUNCE PAY FREEZE
A letter has been received today from Jon Millidge, the Group HR Director, confirming that the Royal Mail Board has decided to enforce a pay freeze for all employees and all managers across the company.
The Union has told Royal Mail there is no possibility of us accepting a pay freeze. Royal Mail is using the external environment as an excuse to continue to attack our members’ terms and conditions.
The company can afford to improve our members’ terms and conditions for the following reasons:
The Company recently posted its best financial results for years and out performed all of its financial targets.
Royal Mail recently wrote to all employees saying the value of the company has significantly increased.
The Government has now accepted that it will take on the pension’s legacy deficit. This will bring about an incredible transformation in Royal Mail’s finances. Previously, Royal Mail signed into funding approximately £280 million per year, for the next 15 years. This money can now be released and reinvested into improving our members’ terms and conditions.
Royal Mail has confirmed that its modernisation programme is fully funded from the previous Government loan.
The company will achieve significant cost reductions as a result of the introduction of automation.
The Government’s regulatory proposals provide the company with a great opportunity to now operate on a level playing field with its competitors and further improve its financial prospects

[brothermagrew]

If true then afraid it doesn't come as a surprise it's been on the cards for a longtime.

[fmrPOSTIE]

Why should RM give a pay rise this yr? thankfully everyone has a secure job

Must have imagined the 10% budget cuts and the fact that about 1 in 5 in my office could be going. Job security. Don't think so

Erm yes you do have job security, nobody is forced out of Royal Mail we all know that! Most private sector companies have imposed a pay freeze this year. And perhaps if you did accept a pay freeze with negotiations then RM may be in a better financial position in the future. The profit made was measley given the subsidy by the govt.

[TrueBlueTerrier]

Why should RM give a pay rise this yr? thankfully everyone has a secure job

Must have imagined the 10% budget cuts and the fact that about 1 in 5 in my office could be going. Job security. Don't think so

Erm yes you do have job security, nobody is forced out of Royal Mail we all know that! Most private sector companies have imposed a pay freeze this year. And perhaps if you did accept a pay freeze with negotiations then RM may be in a better financial position in the future. The profit made was measley given the subsidy by the govt.

Thats the trouble there were no negotiations it was announced today with no previous contact with the CWU or the work force.

As in it was imposed not agreed

[tcblue]

To be honest nothing surprises me anymore about the way royal mail treats it's staff to be honest we seem to be a hindrance to the company and their goal to get 100% part time duties

[darth]

Thats the trouble there were no negotiations it was announced today with no previous contact with the CWU or the work force.

As in it was imposed not agreed

too true .it isnt exactly engaging the workforce.it will now be very interesting to see end of year figures.

[stevenshm]

just seen this on the bbc website

Royal Mail warns of pay freezes

Government ministers say Royal Mail needs urgent modernisation
All Royal Mail staff face a pay freeze this year as the postal service tries to cut costs to ensure its survival.

In a letter to trade unions, the company warned it was in a "very tight financial position" and might not be able to increase wages for any worker.

The government announced plans to sell off part of Royal Mail earlier this year, arguing this was the only way to safeguard the service.

One union leader has said that any pay freeze would be "outrageous".

Royal Mail is facing increasing competition from overseas private postal operators.

And Business Secretary Lord Mandelson has proposed selling 30% of Royal Mail, but the government has said any such scheme would not be a sell-off but a "partnership".

'Tough conditions'

The pay letter, sent by Jon Millidge, Royal Mail's human resources director, said: "The global economic turmoil has exacerbated the structural decline in postal markets in the UK and around the world, with the UK market now declining between 8-10% compared to last year.

"Given the tough economic conditions and with the retail price index currently being negative, you will undoubtedly be aware that many other companies find themselves in a similar position of having difficulty in affording increases in pay," his letter continued.


Postal workers are first class - they don't deserve this second-class treatment

Dave Ward, deputy general secretary, Communications Workers Union
As a direct result, "we do not envisage being able to increase pay rates for any colleagues (including all directors and managers) across the group," it concluded.

Mr Millidge did, however, stress the fact that any previous commitments on pay would be honoured.

Pension deficit

Dave Ward, deputy general secretary of the Communications Workers Union, described any pay freeze as "outrageous".

"Postal workers are first class - they don't deserve this second-class treatment," he said.

"The Royal Mail posted its best financial results for years in December and outperformed all of its financial targets," he added.

In the nine months to Christmas last year, all four Royal Mail businesses were profitable for the first time in almost 20 years.

Royal Mail Letters, the Post Office, Parcelforce Worldwide and the European parcels business GLS contributed to an operating profit of £255m.

But despite the improved performance, the Royal Mail remains short of cash, which is why the government is pressing ahead with plans to sell part of the service.

Prime Minister Gordon Brown has said that the service's £25bn pension deficit in particular makes outside investment imperative.

But the government has maintained that the company will remain publicly owned.

[ldsposti]

no surprise to me been expecting it they just wanted an excuse not to give us a rise, the biggest laugh will be in the morning all the arse lickers will be sucking up to managers as useual summer cuts more work for less money its time we all stood together and say no rise no cuts !!!!!!!!!!!!

[Lounge Lizard]

"Retail Price Index currently being negative" - so have postage prices been held ? No, First class up 8.33% from 36p to 39p, Second class up 11.1% from 27p to 30p.
"UK mail market now declining between 8-10% compared to last year" - so that's why we've got fewer, lighter pouhes each day But if it really was declining 8 to 10% that would be covered by the 8 to 11% postage price rises, so no reduction in revenue.

[themoog]

You see I was expecting this, so I have adjusted my finances by giving up smoking, not going to the pub as often, moving nearer to work (within cycling distance), taking a pack up into work with me, getting cheaper car insurance etc etc.

All in I'm more than £200 better off now than I was before xmas, and a basic wage pays me enough now.

I am officially pay freeze AND recession proof!