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Royal Mail union offered £28.50 a week for staff to push one button

·9-min read
Royal Mail's new automated warehouse for parcels in Warrington - Paul Cooper
Royal Mail's new automated warehouse for parcels in Warrington - Paul Cooper

Royal Mail workers are in line for an extra £1,500-a-year for staff to push one button on a parcels sorting machine.

Union leaders are understood to want a “jam buster allowance” for their members being willing to press a machine reset button – and avoid the need to call out a skilled engineer even when one parcel is just slightly askew.

The demand comes as Royal Mail bosses brace for the outcome of a ballot of 115,000 members of the Communication Workers Union (CWU) next Tuesday.

Union leaders are planning to cripple the privatised postal monopoly in a row over working conditions and pay.

They have rejected a pay rise of up to 5.5pc – 2pc is fixed and the rest is contingent on union chiefs agreeing to sweeping reforms to working practices.

Industry sources said that more than 1,000 local agreements at sorting, delivery and other Royal Mail offices up and down the country need to be renegotiated.

Talks to resolve just one issue, such as the “jam buster allowance”, take at least 30 days. It is understood that the company has offered staff an extra £28.50 per week if they are willing to reset automatic parcel sorting machines themselves – equivalent to nearly £1,500 extra annually.

Simon Thompson, Royal Mail’s chief executive, said that Royal Mail is in the middle of an “emergency” and “fundamental change” is needed.

He intends to transform the former FTSE 100 company into a seven-day-a-week parcel delivery firm and cull Saturday letters for the first time in Royal Mail’s 500 year history.

“We have the opportunity here and we need to take it,” he said.

“We need to make sure that we have a duty pattern that covers seven days of the week. We need later start times so that we can have these later deliveries in the day.

“If we're doing six-day letters versus five-day letters, it means that we've got less focus and investment opportunity to do seven-day parcels: which is what customers want.”

The Royal Mail ballot, of 115,000 members across 1,500 workplaces, will be the biggest of this year’s “summer of discontent”.

CWU deputy general secretary Terry Pullinger has said the CWU wants an "inflation-based, no-strings pay award" for its Royal Mail members.

"The company has imposed a 2pc pay award, miles away from where inflation is, totally inadequate."

The CWU said it was standing in “full support” of railway workers that are walking out in their own row with employers over wages and changes to working conditions.

The union must give two weeks’ notice before industrial action can take place.

‘We need fundamental changes – it is now an emergency’

Royal Mail chief Simon Thompson in the Mount Pleasant sorting depot - Jeff Gilbert
Royal Mail chief Simon Thompson in the Mount Pleasant sorting depot - Jeff Gilbert

Growing up in the north-east market town of Darlington, Simon Thompson has fond memories of attending the nearby Durham Miners’ Gala in the 1970s and 1980s.

For many working class families, the annual trade union jamboree was - and remains - a highlight of the social calendar.

“My grandfather was one of [Arthur] Scargill's boys,” the Royal Mail chief executive says.

“He was a huge [trade] unionist. I remember when I was a kid, they always used to have Durham Miners’ Gala. With all the banners. I haven’t been for years, but I remember it very well,” he adds with a small chuckle..

Convincing many in the working classes of the merits of change is serious business - as Thompson witnessed first hand growing up.

“My grandad and my dad had a bit of a tenuous relationship. My dad decided that he wanted to go to further his education; he became an accountant. I think he was the first one that stepped away from what his father would have thought [was normal].”

With Margaret Thatcher dominating at the ballot box, politics was an even more sensitive topic.

“Whenever there was a general election going, my dad and my grandad never used to see each other for months,” he says.

Four decades later, following a career including stints at Apple, Ocado, Honda - and as managing director for the NHS test and trace programme - Thompson is witness to another industrial row. But far from an innocent young bystander, he is right at the centre.

On Tuesday, 115,000 members of Communication Workers Union (CWU) are expected to support strike action at the former state-owned postal monopoly. They are opposing reforms to “Amazon-ify” Royal Mail and demanding steep pay rises.

Speaking from Royal Mail’s headquarters above the sorting office in Islington, North London, the 55-year-old refuses to be drawn on the “what ifs” of the voting results.

It is no secret the company has been stuck in the dark ages for far too long – as Thompson’s predecessors have been at pains to point out. Since being privatised by the coalition government under David Cameron in 2013, the fortunes of Royal Mail have been volatile – usually determined by the support, or lack thereof, of powerful trade unions determined to hold on to working practices of a bygone era.

“There are things that we are doing now, they're absolutely on the [cutting] edge. And yet there are other things that when you walk around and you see you're just like: ‘Oh come on!’,” he says.

“During my time here as chief executive we’re not going to have our Kodak moment.”

Thompson doesn’t mean that in the positive sense. Rather, he is referencing the American photograph company’s refusal to accept the digital age, which shifted Kodak from household name to corporate has been.

The same fate awaits Royal Mail if the unions get their way, he argues: “We have the opportunity here and we need to take it.”

“Our whole working patterns in delivery are based on what we used to do for letters,” he says. “We start at the same time, we end at the same time, and we do a six days week. But that's not what our customers want.

“We need to make sure that we have a duty pattern that covers seven days of the week,” Thompson adds. “We need later start times so that we can have these later deliveries in the day.”

Automated but unused

A brief tour of the Mount Pleasant site, once the biggest sorting office in the world, reveals some of Royal Mail’s working practices conundrum.

Royal Mail's Mount Pleasant sorting office in 2017 - Simon Dawson/Bloomberg
Royal Mail's Mount Pleasant sorting office in 2017 - Simon Dawson/Bloomberg

There is an all-electric fleet of postal vans awaiting deliveries. Yet one floor up, every single parcel is sorted by hand. In a seemingly paradoxical situation, every parcel delivered in London leaves in a state-of-the-art zero emissions vehicle, while automatic sorting machines lie fallow.

Mount Pleasant has one such machine which will process between 6,000 and 7,000 parcels per hour but it is yet to be plugged in. Every tiny change must be cleared by the unions – and this machine will put 30 people out of work, Thompson explains.

“When I wake up every morning, I’ve got 140,000 in the team. And we have to make sure that those 140,000 people still have long term job security in the future.

“The reality is if you look at what we pay and what some of our competitors pay - [it is] somewhere between 29pc and 40pc more.

“Now, no-one is going to pay 29pc or 40pc more for parcels are they? We might get a bit of a premium because of our brand and the fact we are trusted. But they are not going to pay 40pc more.”

Thompson has the air of a headteacher. There is something slightly staged about the way he greets members of staff around the complex, enthusiastically asking them how things are going.

Simon Thompson with a Royal Mail worker - Jeff Gilbert
Simon Thompson with a Royal Mail worker - Jeff Gilbert

Yet rules are rules. At one point, Thompson spots a worker in a grey t-shirt and blue shorts. “Got your high-vis with you?” Thompson asks. “Can you pop it on?”

Later on, he notices a group of executives from Nike having a tour and runs to the other side of the building to greet them. Nike currently uses DPD and Evri – formerly known as Hermes – and Thompson is desperate to seize the American sports brand’s business away from rivals.

Seven-day operation

Central to the industrial dispute Thompson is up against are the changes to rostering, which will transform Royal Mail from a six-day to full week operation.

“What the customers told us is that they want a seven-day parcel service that goes everywhere for the same price,” Thompson explains.

Royal Mail is celebrating the first anniversary of its Sunday service launch - the first time it has delivered on the seventh day in its 500-year history.

“Sunday working is not a natural reality for our team. As it stands today, about half of our deliveries on a Sunday are done through temporary workers.

“That's not sustainable,” he says, adding that productivity by the core team would be “around about double”.

“The reality is, if we're stuck in a six-day working pattern, I don't want the team to work seven days. It isn't going to work. It's not fair, is it? So we need different duty patterns.”

Meanwhile, the Saturday letter service is up for the cull. The move would require the consent of parliament and has already sparked opposition among MPs. Thompson is confident that he can win around critics in Westminster.

“If it's what the customer wants, then we should give them what they want. If we're doing six-day letters versus five-day letters, it means that we've got less focus and investment opportunity to do seven-day parcels: which is what customers want,” he says.

“Somewhere along the line we need to have the change so we can focus our energies and our efforts on our investments and what they want.”

The chief already has one eye beyond the current industrial logjam. Delivery companies’ green credentials are the battleground of the future. He has told his team that the carbon footprint of an average parcel must be reduced to that of a cup of tea with milk - some 50g versus roughly 200g currently.

Nevertheless, Thompson knows the green agenda will come into play if Royal Mail can unblock its industrial impasse. Once again, it is all about change: “We do need fundamental changes. And it is now an emergency.”

Thompson says there “is more on the table” in terms of pay rises if the unions agree to sweeping changes to working practices.

“But we need the changes, we need the changes to compete,” he says. “We need to change so people can have long term job security. Change is not optional.”