Report slams 'dire' Royal Mail

Its bad image lost the Royal Mail £4m in contracts

The "frankly dire" state of industrial relations at the Royal Mail could kill the business off, according to an independent report.

A series of crippling strikes has been "enormously damaging" to the firm, a subsidiary of postal giant Consignia, and has resulted in the cancellation of orders worth £4m and a disastrous image problem.

The perception of Royal Mail as strike ridden and unreliable makes it deeply vulnerable to competitors

Report on Royal Mail

"The perception of Royal Mail as strike ridden and unreliable makes it deeply vulnerable to competitors and to action by the regulator," said the report, which was commissioned jointly by Royal Mail and the Communication Workers Union (CWU), and led by former Labour Party general secretary Lord Sawyer.

"We have no doubt that unless the problem of industrial action, and the underlying state of industrial relations which it reflects, is effectively resolved there is little hope for the future success of Royal Mail."

Six of one...

Both employer and unions came under attack in the report.

Sadly, the service is not always first class

Post office managers were blasted for their autocratic approach, and fostering of a "them and us culture".

"There is a clear divide between managers and staff which is exacerbated by the lack of trust and respect for each other," the report said.

Postal workers felt undervalued and were not respected, while mail centres resembled "old fashioned factories".

The report also said that postal workers were still very badly paid.

On 13 July, Consignia confirmed that it was laying off 2,100 staff - although mainly in administrative and managerial positions.

... half-a-dozen of the other

Employees, meanwhile, were attacked for the frequency of industrial action and the unions for their inability to control wildcat unofficial strikes.

"There is no interest in resolving issues, and representatives are happy to keep relations constantly destabilised."

Ironically, as the report was being distributed on Friday, a strike was being planned elsewhere in London, aimed at highlighting poor industrial relations.

Good to talk

The review recommended that both sides adopt alternative dispute-resolution methods, including independent troubleshooting teams, which could be called in to help.

Building trust is now vital, said Lord Sawyer.

"[Management and unions] are very good at knocking spots off each other but they do not engage in a dialogue of trust."

The report recommended that a special arbitration panel should be set up, with an independent chairman, to provide a rapid ruling to help resolve disputes.

Cautious welcome

The report was cautiously welcomed by both sides.

"The CWU will play its full part in seeking solutions to problems facing our industry," said the union's general secretary, Billy Hayes.

Consignia chief executive John Roberts said the firm needed more time to study the details of the report before taking action, but that it had made its case forcefully.

"The report confirms that the stakes are high - the challenges to the business from regulatory actions and increasing competition are real and far reaching and will, unless we stop striking, cost business and jobs," he said.