LTB 481/13 Royal Mail Privatisation - Government Announcement
No. 481/2013
Ref:21003
Date: 10th July 2013
TO: ALL BRANCHES WITH POSTAL MEMBERS
Dear Colleague
ROYAL MAIL PRIVATISATION - GOVERNMENT ANNOUNCEMENT
Branches will be aware that the Government has today updated their plans for privatisation. The detail of their announcement remains to be clarified but effectively this consists of:
1. A share flotation of the company which has no clear figure on the percentage to be sold.
2. 10% of shares to be distributed free to the workforce.
3. No definitive timetable for the sale.
The lack of overall clarity on the Government plans demonstrates a nervousness and reflects that our campaign is having an impact. On the subject of employee shares, up until very recently the Government had told us that employees would have to buy shares at a discounted price. The move to free shares is a direct reaction to both our campaign and the result of the CWU consultative ballot.
Today's announcement only reinforces our determination to continue and intensify the campaign including all our postcard and online activities. It is also crucial that we continue to place the long term protection of our members' jobs, pay, pensions and terms and conditions at the forefront. We will soon be writing to CWU members updating them on all these issues. We have also attached today's press release and a copy of an open letter that was sent to Michael Fallon setting out the Union's position. It is important that this letter is distributed to all Representatives and where possible members in the workplace.
Further information will follow in due course.
Yours sincerely
Dave Ward Billy Hayes
Deputy General Secretary (P) General Secretary
ANNOUNCEMENT : ALL OF ROYAL MAIL'S EMPLOYMENT POLICIES (AGREEMENTS) AT A GLANCE (Updated 2021)... HERE
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Royal Mail Privatisation - Government Announcement
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fishtank
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Royal Mail Privatisation - Government Announcement
good times, bad times you know I've had my share
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fishtank
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Press Release
10th July 2013
For immediate release
Communication Workers Union today reacted to the announcement of a flotation of Royal Mail as illogical and impractical
Billy Hayes, CWU General Secretary said 'for the secretary of state to describe this decision as logical is unbelievable. Royal Mail is profitable, has modernised and can be successful in public ownership. The logical step is for the government to consider the unions proposal to keep the company in public ownership whilst putting in place a not-for-dividend structure that allows profits to be put back to improving service. it is easy for the government to set up a management structure that allows for the company to raise capital whilst in public ownership.
It is political dogma that leads government thinking, not Mr Cable's claim that it is practical and logical'.
'The sale is unwanted by the public, customers and the workers. We will continue to fight it' added Billy.
Dave Ward, CWU Deputy General Secretary said 'the flotation announcement has ignored the views of the workforce and the British public. The workforce agreed a modernisation programme with Royal Mail 3 years ago and it didn't include privatisation. They have worked hard to modernise the company and deliver the profitable organisation Royal Mail is today. They have recently voted in big numbers against the sale and they will be angered by todays announcement'.
'CWU will continue to fight the sale and without worthwhile and legally binding assurances on terms and conditions, strike action is inevitable'.
For immediate release
Communication Workers Union today reacted to the announcement of a flotation of Royal Mail as illogical and impractical
Billy Hayes, CWU General Secretary said 'for the secretary of state to describe this decision as logical is unbelievable. Royal Mail is profitable, has modernised and can be successful in public ownership. The logical step is for the government to consider the unions proposal to keep the company in public ownership whilst putting in place a not-for-dividend structure that allows profits to be put back to improving service. it is easy for the government to set up a management structure that allows for the company to raise capital whilst in public ownership.
It is political dogma that leads government thinking, not Mr Cable's claim that it is practical and logical'.
'The sale is unwanted by the public, customers and the workers. We will continue to fight it' added Billy.
Dave Ward, CWU Deputy General Secretary said 'the flotation announcement has ignored the views of the workforce and the British public. The workforce agreed a modernisation programme with Royal Mail 3 years ago and it didn't include privatisation. They have worked hard to modernise the company and deliver the profitable organisation Royal Mail is today. They have recently voted in big numbers against the sale and they will be angered by todays announcement'.
'CWU will continue to fight the sale and without worthwhile and legally binding assurances on terms and conditions, strike action is inevitable'.
good times, bad times you know I've had my share
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fishtank
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Michael Fallon Letter
Headquarters 150 The Broadway | Wimbledon | SW19 1RX
T 020 8971 7200 | F 020 8971 7300 | http://www.cwu.org" onclick="window.open(this.href);return false;
From the office of Billy Hayes | General Secretary
Email bhayes@cwu.org | Direct line 020 8971 7251
Our Ref : DW/AC 21003
9th July 2013
Rt Hon Michael Fallon MP
Minister of State for Business and Enterprise
Department of Business Innovation and Skills
1 Victoria Street
London SW1H 0ET
Sent by email and post
Dear Michael
Following our recent meeting we said we would write to you restating our position on a range of issues associated with the Postal Services Act.
Privatisation
As you know the CWU remains fundamentally opposed to privatisation. It is not the answer to the long-term success of Royal Mail and neither will it secure the future of the Universal Service.
The Government has framed its arguments for privatisation as though Royal Mail is in imminent danger and a sell off is the only way it can survive. This is simply not true. The Royal Mail does not have to compete with the NHS or education services for sparse Government funds. There are alternative ways for the company to access capital and more innovative business structures that really would align the interests of the workforce, customers and the company.
We have spoken about these social business models at various meetings and it is disappointing that Government dogma continues to stand in the way of any serious debate about an alternative. It is patently obvious that from the outset this Government has never been interested in any new ideas - instead it relies on the tired old thinking of the past.
To ensure our position is not misrepresented in the ensuing public debate, we are reaffirming that the CWU would support an alternative business model based on the following:
· The Royal Mail Group should be a 'not for dividend company' with profits reinvested back into services and the workforce. It would operate for public good, balancing its social obligations with commercial opportunities.
· The company would be able to access capital by borrowing on the commercial markets without this contributing to Government debt. Network Rail is a perfect example of this. By creating a new Board structure it has been able to borrow over £27 billion in recent years. A fully modernised Royal Mail with proper employee alignment will also be able to self finance some of its own investment. Neither the Government nor the company can put forward any rational argument as to why this type of structure is not viable. Such a structure would protect over 300 years of Royal Mail heritage as one of the last Great British institutions and still achieve Government objectives.
· There would be a company charter set out in legislation that would confirm Royal Mail as the USO provider and act as a locking mechanism against any further attempts to alter the structure of the company. The charter would set out a list of ethical principles and values that the company would be bound by, including its approach to employee and industrial relations.
· There would be an overhaul of the governance structure and the main Board representatives would be balanced between appointees with social, commercial and ethical responsibilities. The Unions could nominate a small number of Board members, but not from within their organisations.
· The company would implement the High Pay Commission recommendations with a fixed pay differential between what Board members, Senior managers and the workforce earn.
· The company would operate single status benefits from the top to the bottom. Incentive schemes would relate to a fixed percentage of people's overall salary.
It is entirely possible to develop the aforementioned social business structure and we would urge you to consider such an alternative. To continue to ignore the views of 96% of the workforce will only serve to destabilise and reverse the progress made on modernisation.
Assurances on Future Terms and Conditions
As you know the Union is engaged in negotiations with the company to secure an agreement on assurances over the future terms and conditions of CWU members' in the event of privatisation and the growing threat of End to End competition.
As we discussed, these negotiations are reaching a crucial stage and CWU are seeking an agreement that would be legally binding on both parties and any potential new owner. Assurances on future terms and conditions without a binding legal framework would not be worth the paper they are written on. The Government has a central role in bringing talks to a successful conclusion. However, if the Union cannot reach an acceptable agreement in the near future then we will ballot our members for National Industrial Action. We expect the Industrial Action policy to be ratified at a Conference of the Union on 31st July 2013.
Pensions
We have discussed the latest pension developments with you and it is now essential that the Government intervene in this matter. As you know the Union has engaged our Lawyers to check the legitimacy of these latest pension changes in light of the previous Government settlement and the European State Aid ruling. The Government should be in no doubt that this development is likely to be part of a National dispute unless we can find an urgent solution. CWU members were promised that their pensions were secure and believe the Government has a legal and moral responsibility to uphold its promises.
Employee Share Ownership
The Union has been consistent when asked about our views on Employee Ownership. These have been stated in evidence before Parliament during the passage of the Bill and were set out in a broader context in our letter to you of 9th May 2013, a copy of which is attached for ease of reference. We have also exchanged views on this matter in our regular meetings. Nevertheless, to again ensure our position is not misrepresented in public, we are happy to restate the points we have consistently made:
1. If this is really about engaging employees and giving them a real say over the future, then there are far better ways of achieving this than the narrow thinking the Government has restricted itself to on Employee Shares. For example the alternative social business model concept with a properly negotiated incentive scheme would be far more effective.
2. Please remember the starting point is the failed Government Colleague Share Scheme. Postal Workers still believe they are owned around £2500 each and they expect their Union to pursue this.
3. Postal Workers are more concerned about their basic pay, pensions and proper bonus arrangements that relate directly to their efforts at work.
4. If despite our views, the Government just press on regardless then we would make the following points about an Employee Share Scheme:
- The employee stake should be maximised. As a minimum it should at least hit the threshold of 25%.
- Employee shares should be held in a Collective Trust and the CWU should have a formal role on the Trust Board.
- Employee shares should be free. The majority of postal workers do not have spare cash to buy shares, even at discount prices.
- Employee shares should not be tradable. If this were the case the majority of employees would sell them at the first opportunity. We fail to see how anybody can suggest that tradable shares will align the workforce with the objectives of the company.
- Instead of dividends there should be options for an incentive scheme to top up pensions.
5. If as we expect, the Government announce the detail of an Employee Share Scheme this week, based on what you told us at our last meeting, then this will be another missed opportunity. Incidentally are you aware that the company are now presenting Employee Shares as an integral part of their three year pay offer? They have told us that these shares will replace all future bonus/incentive arrangements. Can you let us have your views on this aspect as CWU members will want to know if this has been agreed with Government.
Could you also confirm that under your proposal employees will automatically receive free shares unless they opt out? This is the position that was explained to us by your Team and we would like complete clarity on this process.
Summary
In recent years Postal Workers have gone through an unprecedented amount of change. This was based on an agreement that set out a shared vision of modernisation. Privatisation was never part of that vision. Even at this stage we urge you to consider an alternative approach and continue dialogue with the Union on all the issues covered in this letter.
Yours sincerely
Billy Hayes Dave Ward
General Secretary Deputy General Secretary (Postal)
cc Rt Hon Vince Cable, Secretary of State
T 020 8971 7200 | F 020 8971 7300 | http://www.cwu.org" onclick="window.open(this.href);return false;
From the office of Billy Hayes | General Secretary
Email bhayes@cwu.org | Direct line 020 8971 7251
Our Ref : DW/AC 21003
9th July 2013
Rt Hon Michael Fallon MP
Minister of State for Business and Enterprise
Department of Business Innovation and Skills
1 Victoria Street
London SW1H 0ET
Sent by email and post
Dear Michael
Following our recent meeting we said we would write to you restating our position on a range of issues associated with the Postal Services Act.
Privatisation
As you know the CWU remains fundamentally opposed to privatisation. It is not the answer to the long-term success of Royal Mail and neither will it secure the future of the Universal Service.
The Government has framed its arguments for privatisation as though Royal Mail is in imminent danger and a sell off is the only way it can survive. This is simply not true. The Royal Mail does not have to compete with the NHS or education services for sparse Government funds. There are alternative ways for the company to access capital and more innovative business structures that really would align the interests of the workforce, customers and the company.
We have spoken about these social business models at various meetings and it is disappointing that Government dogma continues to stand in the way of any serious debate about an alternative. It is patently obvious that from the outset this Government has never been interested in any new ideas - instead it relies on the tired old thinking of the past.
To ensure our position is not misrepresented in the ensuing public debate, we are reaffirming that the CWU would support an alternative business model based on the following:
· The Royal Mail Group should be a 'not for dividend company' with profits reinvested back into services and the workforce. It would operate for public good, balancing its social obligations with commercial opportunities.
· The company would be able to access capital by borrowing on the commercial markets without this contributing to Government debt. Network Rail is a perfect example of this. By creating a new Board structure it has been able to borrow over £27 billion in recent years. A fully modernised Royal Mail with proper employee alignment will also be able to self finance some of its own investment. Neither the Government nor the company can put forward any rational argument as to why this type of structure is not viable. Such a structure would protect over 300 years of Royal Mail heritage as one of the last Great British institutions and still achieve Government objectives.
· There would be a company charter set out in legislation that would confirm Royal Mail as the USO provider and act as a locking mechanism against any further attempts to alter the structure of the company. The charter would set out a list of ethical principles and values that the company would be bound by, including its approach to employee and industrial relations.
· There would be an overhaul of the governance structure and the main Board representatives would be balanced between appointees with social, commercial and ethical responsibilities. The Unions could nominate a small number of Board members, but not from within their organisations.
· The company would implement the High Pay Commission recommendations with a fixed pay differential between what Board members, Senior managers and the workforce earn.
· The company would operate single status benefits from the top to the bottom. Incentive schemes would relate to a fixed percentage of people's overall salary.
It is entirely possible to develop the aforementioned social business structure and we would urge you to consider such an alternative. To continue to ignore the views of 96% of the workforce will only serve to destabilise and reverse the progress made on modernisation.
Assurances on Future Terms and Conditions
As you know the Union is engaged in negotiations with the company to secure an agreement on assurances over the future terms and conditions of CWU members' in the event of privatisation and the growing threat of End to End competition.
As we discussed, these negotiations are reaching a crucial stage and CWU are seeking an agreement that would be legally binding on both parties and any potential new owner. Assurances on future terms and conditions without a binding legal framework would not be worth the paper they are written on. The Government has a central role in bringing talks to a successful conclusion. However, if the Union cannot reach an acceptable agreement in the near future then we will ballot our members for National Industrial Action. We expect the Industrial Action policy to be ratified at a Conference of the Union on 31st July 2013.
Pensions
We have discussed the latest pension developments with you and it is now essential that the Government intervene in this matter. As you know the Union has engaged our Lawyers to check the legitimacy of these latest pension changes in light of the previous Government settlement and the European State Aid ruling. The Government should be in no doubt that this development is likely to be part of a National dispute unless we can find an urgent solution. CWU members were promised that their pensions were secure and believe the Government has a legal and moral responsibility to uphold its promises.
Employee Share Ownership
The Union has been consistent when asked about our views on Employee Ownership. These have been stated in evidence before Parliament during the passage of the Bill and were set out in a broader context in our letter to you of 9th May 2013, a copy of which is attached for ease of reference. We have also exchanged views on this matter in our regular meetings. Nevertheless, to again ensure our position is not misrepresented in public, we are happy to restate the points we have consistently made:
1. If this is really about engaging employees and giving them a real say over the future, then there are far better ways of achieving this than the narrow thinking the Government has restricted itself to on Employee Shares. For example the alternative social business model concept with a properly negotiated incentive scheme would be far more effective.
2. Please remember the starting point is the failed Government Colleague Share Scheme. Postal Workers still believe they are owned around £2500 each and they expect their Union to pursue this.
3. Postal Workers are more concerned about their basic pay, pensions and proper bonus arrangements that relate directly to their efforts at work.
4. If despite our views, the Government just press on regardless then we would make the following points about an Employee Share Scheme:
- The employee stake should be maximised. As a minimum it should at least hit the threshold of 25%.
- Employee shares should be held in a Collective Trust and the CWU should have a formal role on the Trust Board.
- Employee shares should be free. The majority of postal workers do not have spare cash to buy shares, even at discount prices.
- Employee shares should not be tradable. If this were the case the majority of employees would sell them at the first opportunity. We fail to see how anybody can suggest that tradable shares will align the workforce with the objectives of the company.
- Instead of dividends there should be options for an incentive scheme to top up pensions.
5. If as we expect, the Government announce the detail of an Employee Share Scheme this week, based on what you told us at our last meeting, then this will be another missed opportunity. Incidentally are you aware that the company are now presenting Employee Shares as an integral part of their three year pay offer? They have told us that these shares will replace all future bonus/incentive arrangements. Can you let us have your views on this aspect as CWU members will want to know if this has been agreed with Government.
Could you also confirm that under your proposal employees will automatically receive free shares unless they opt out? This is the position that was explained to us by your Team and we would like complete clarity on this process.
Summary
In recent years Postal Workers have gone through an unprecedented amount of change. This was based on an agreement that set out a shared vision of modernisation. Privatisation was never part of that vision. Even at this stage we urge you to consider an alternative approach and continue dialogue with the Union on all the issues covered in this letter.
Yours sincerely
Billy Hayes Dave Ward
General Secretary Deputy General Secretary (Postal)
cc Rt Hon Vince Cable, Secretary of State
good times, bad times you know I've had my share
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celerycelery
- Posts: 675
- Joined: 20 Sep 2007, 16:44
Re: Royal Mail Privatisation - Government Announcement
Need to do something now whilst its on every news bulletin. In a week, 2 weeks or a month this will be old news. Union cant ballot staff as it will be too late and any public interest will have waivered. Need to walk out now. Nowt to lose have we?
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knackeredneedadayoff
- Posts: 342
- Joined: 05 Nov 2009, 18:19
- Gender: Male
Re: Royal Mail Privatisation - Government Announcement
Dont worry they have been on a bus sightseeing around london,Royal Mail and the government are quaking with fright.Why oh why dont they get a proper spokesman giving the truth that we all know,Dave was rubbish on sky news and the majority of the country wont know whats happening. CWU earn your corn and stand up nationaley for your members
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Danelectro
- Posts: 1058
- Joined: 13 Apr 2008, 01:02
Re: Royal Mail Privatisation - Government Announcement
As we discussed, these negotiations are reaching a crucial stage and CWU are seeking an agreement that would be legally binding on both parties and any potential new owner. Assurances on future terms and conditions without a binding legal framework would not be worth the paper they are written on.
Did this not come up in during BT2010? is there such a thing as a legal framework that can be enforced on a new owner that is worth the paper its written on?
Did this not come up in during BT2010? is there such a thing as a legal framework that can be enforced on a new owner that is worth the paper its written on?
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fishtank
- Posts: 19732
- Joined: 28 Sep 2007, 17:22
- Gender: Male
Re: Royal Mail Privatisation - Government Announcement
In a word...No.Danelectro wrote:is there such a thing as a legal framework that can be enforced on a new owner that is worth the paper its written on?
Terms and conditions are protected by collective strength,not lawyers.
If it was that easy we could just dump the CWU and employ Simpson Millar on a retainer.
Anything either the CWU or Royal Mail put forward as legal protection will just be a sop to the membership.
good times, bad times you know I've had my share