LTB331/16 Post Office: Supply Chain - Exiting the External Market and Emergency Motion E3 - Update

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LTB331/16 Post Office: Supply Chain - Exiting the External Market and Emergency Motion E3 - Update

No. 331/2016

26th May 2016

POST OFFICE: SUPPLY CHAIN - EXITING THE EXTERNAL MARKET AND EMERGENCY MOTION E3 - UPDATE


Dear Colleagues

Further to LTB302/16 dated 17th May.

Supply Chain National Briefing – Monday 23rd May

A successful National Briefing was held in London on 23rd May, which was attended by Branch Secretaries with Post Office members, CViT / Cash Centre Unit Reps, Post Office Territorial Reps, Supply Chain and Post Office Area Reps (including Deputy Area Reps), and Regional Health & Safety Reps. A good number of Postal Executive members were also in attendance.

A detailed presentation was given in relation to the Post Office’s plans to exit the external market in Supply Chain, leading to the potential closure of 8 Depots and 1 Cash Centre as well the closure of the Newcastle Centre of Excellence with the loss of 12 jobs. In addition, the Coin operation at Hemel Hempstead would move into Midway House (Birmingham).

It was important to advise all Branches and Representatives that the Post Office’s proposals would affect the whole of the Supply Chain network, not just the 9 Units earmarked for closure. This is because losing the external customers would lead to many job losses across the remaining 15 Units which would result in revised duties and will impact on earnings with significantly less opportunity for Scheduled Attendances.

In total the proposals would lead to the potential loss of 515 CWU grade roles, a reduction of 45% as follows:

• 123 jobs in the units which are closing
• 392 jobs in the remaining Units

In terms of grades, the potential job losses are split as follows:

• 371 Crew
• 50 Postal Officer
• 92 Postal Assistants
• 2 LA1s

The slide presentation used at yesterday’s briefing is attached to this LTB for your information.

 
Post Office Business Case – Not Proven

The Post Office’s rationale for the proposals is that the Supply Chain external market costs c.£29m to serve, yet it only brings in c.£19m, leading to a loss of £10m per annum. The Post Office also claims there is:

• a consistent failure in the quality of service to external customers
• overcapacity in the market
• a general decline in the market for CViT and cash processing as cash usage in society is reducing

The Post Office’s business case and the above rationale has not been proven; consequently we wrote to Paula Vennells, Chief Executive seeking access to the full accounts in order to establish whether the reported £10m p.a shortfall is accurate or exaggerated. In the absence of us being able to verify the numbers in a transparent way we can only be suspicious of the validity of the claim from the Post Office. In a letter to me dated 16th May, Paula Vennells states we “will have the opportunity to present alternatives” yet if we do not have full access to the books, how can we possibly make a realistic counter-proposal?

On a positive note, we have today received confirmation that the Post Office has committed to taking the Union through a fully transparent and detailed examination of the financial case underpinning the proposal to withdraw from the external market in Supply Chain. This activity is due to take place week commencing 6th June.

Post Office Letter to External Customers

Subsequent to the publication of LTB302/16 it was reported to me that the Post Office was intending to write to all external customers serving notice on their contracts. Accordingly, I wrote to Paula Vennells, Chief Executive, on 17th May seeking confirmation of this position as this action would seemingly render the 90 day consultation over redundancies (governed by legislation) meaningless.

Mark Ellis, Supply Chain Director, responded the same day to confirm the Post Office was indeed writing to its external customers; however, he stated the letter “does not serve notice but instead informs them of our proposals and states that we will notify our customers formally should our plans be confirmed”. Whilst this is not a formal letter of notice to cease the contract, it is highly likely the vast majority of customers will perceive this as the Post Office encouraging them to find an alternative provider, which is an outrageous position given the legislation covering the 90 day consultation which reads as follows*:

“(2) The consultation shall include consultation about ways of—
(a) avoiding the dismissals,
(b) reducing the numbers of employees to be dismissed, and
(c) mitigating the consequences of the dismissals, and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives”

*quotation from Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 part IV – Industrial Relations, Chapter II – Procedure for Handling Redundancies.

Mark Ellis’ correspondence and the associated letter to customers are attached to this LTB for information.

Next Steps

The Postal Executive met at its statutory meeting on Tuesday 24th May, and received a comprehensive report from myself following which a lengthy discussion took place with regards to the “future of Supply Chain” and also next steps. The debate centred around the imperative for instigating further dialogue with the Post Office in line with Emergency Motion E3 (attached) with a view to reaching an “Overarching Agreement” covering:

• Major challenges facing Supply Chain
• Pensions (the Post Office has confirmed its consultation will close on 31st May)
• Crown Office pay
• Crown Office network (franchising)

It is of course our primary objective to reach an “Overarching Agreement” involving the above key issues.

Guarantee Required for the Future

In addition, should the Post Office’s proposals go ahead in regard to exiting the external market, the Postal Executive has endorsed the idea of seeking a long term guarantee (up to ten years) for the future of Supply Chain. This would protect the remaining members who will continue to service Post Offices, Royal Mail, Clydesdale and Bank of Ireland. Essentially this policy is necessary in order to stop or avert a potential outsourcing of the Post Office’s internal work.

Compulsory Redundancies – Conference Policy, Motion 89

In line with Motion 89, the Postal Executive also supported the policy of holding further discussions with the Post Office to ensure we do everything possible to avoid Compulsory Redundancies should the Post Office press ahead with their plans to exit the external market in Supply Chain.

This policy would include an objective in seeking improvements to the compensation terms via a number of MTSF “enablers” to make any VRs more attractive. With the scale of the job losses, the possibility of Compulsory Redundancy is increasingly likely and this is something the Union cannot tolerate under any circumstances. It is therefore imperative to secure enhancements to the terms of MTSF for both short service and long service members.

Pensions

In regard to pensions, it is highly significant that over 50% of our Supply Chain members are aged 55 and above. The current proposal is that the Defined Benefit scheme will close on 31st August. Accordingly, many of our members aged 55 and above will be potentially worse off in the event the DB scheme closed prior to any VRs taking place.

Our key objective is therefore to ensure that the DB scheme remains in place for AT LEAST the period when the last of the proposed VRs in Supply Chain is due to take place. This does not mean that we support the closure of the DB scheme, and pensions will hopefully be integral to the “Overarching Agreement” negotiations.

Political Campaigning

As outlined in LTB302, we will be campaigning to put further pressure on the Government and the Post Office as part of our “Peoples Post” campaign. Dave Ward, General Secretary has written to Sajid Javid MP, Secretary of State for BIS, calling for the government to intervene to stop the job cuts and asking for an urgent meeting. Dave Ward has also written to Baroness Neville-Rolfe,



Minister for Postal Affairs to inform her we have requested a meeting with Sajid Javid to discuss what the government can do and requested her help in facilitating this.

We also received supportive statements from both Jeremy Corbyn, MP, Leader of the Labour Party and John McDonnell MP, Shadow Chancellor, via Twitter: example as follows:

“Jeremy Corbyn MP ‏@jeremycorbyn • May 17
Tory cuts mean another 600 Post Office job losses. Tories must work out strategy with stakeholders to safeguard Post Office's future & jobs”

A short but positive statement was also released from the office of Angela Eagle, Labour’s Shadow First Secretary of State and Shadow Secretary of State for BIS on the morning of 17th May as follows:

Subject: NEWS FROM LABOUR: Hundreds of Post Office workers will be deeply concerned by this news - Angela Eagle

Angela Eagle MP, Labour’s Shadow First Secretary of State and Shadow Secretary of State for Business, Innovation and Skills, speaking following the news of 600 job losses at the Post Office, said:

“Hundreds of Post Office workers will be deeply concerned by this news, and worried for the future of their jobs. It follows the announcement of the potential closure of dozens of Crown Post Offices, and the consultation on the closure of the pension scheme. It’s a triple whammy for the workforce.

“The Post Office is a British institution which provides a vital service to communities up and down the country. But it faces an increasingly uncertain future.

“The Tory Business Secretary needs to do more - working in partnership with the Post Office management and the workforce - to ensure it has a sustainable future.”

Ends

Membership Meetings / Recruitment

Branches and Representatives were urged at the National Briefing to call membership meetings in all workplaces over the next 3 weeks. These meetings, some of which have already taken place, will be supported by the 3 Area Reps (Supply Chain), 4 Territorial Reps and CWU Headquarters. Ideally these meetings are to be completed by Monday 13th June. If attendance is required at the meetings from a Postal Executive member, or myself, please contact Lea Sheridan: lsheridan@cwu.org to check availability.

Branches and Representatives were also asked to urgently recruit as many non-members as possible. In this regard, Area/Unit Reps (or the Branch Secretary where appropriate) were given a copy of the current membership records list for their Unit and are required to obtain mobile numbers and email addresses for all members so that timely communications can be sent directly to members from HQ. Please could all membership listings with amendments / additions etc. be returned to Lea Sheridan at CWU HQ as soon as possible, either by post or by email to lsheridan@cw.org

Further developments will be reported.

Yours sincerely

Andy Furey
Assistant Secretary