Royal Mail privatisation pledge may affect strike ballot

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The government's announcement that the privatisation of the Royal Mail is to be begin next week will attract a range of views for and against the move - but it it may also affect the strike negotiations of a union already at loggerheads with the government and Royal Mail managers.

Not all of the service's shares will be sold, but ministers will publicly list a majority of them and the initial public offering (IPO) will see ten per cent given free to the firm's 150,000 employees, who will have priority to apply for more shares before the rest are made available to the general public at a minimum application of £750 worth each.

The announcement that the Royal Mail is to be privatised is not new in itself - business secretary Vince Cable revealed plans for this in July - but only now has the date been named.

It comes as the Communication Workers Union (CWU) - which opposes privatisation - considers further industrial action in its long-running dispute with the Royal Mail over issues including a pay freeze, job cuts and the closure of Crown post offices.

A ballot in August voted overwhelmingly (88 per cent) in favour of industrial action falling short of strike action and a vote over possible strike action is to be taken on October 3rd. In addition to this, two days of walkouts by staff working in Crown Post Offices have already taken place, either side of the August bank holiday.

This latter step was condemned by the Royal Mail in a statement on September 2nd, which said: "Royal Mail is very disappointed that the CWU has issued a timeline for a national ballot for industrial action, if an agreement is not reached in ongoing talks."

With the IPO imminent, it may be that the CWU position hardens. Indeed, the pay issues over which a strike may be called and the privatisation plan were linked by the union's deputy general secretary Dave Ward in an address at the Trades Union Congress (TUC) annual conference this week.

He commented: "The government has announced its intention to privatise Royal Mail. But we had our own announcement last week -we will be balloting our members for strike action."

The CWU proposed a motion against privatisation, which was seconded by the Unite union and passed unanimously by delegates. This is hardly a new development, since the TUC and the Labour Party have already made their opposition to the move clear. However, coming in the conference season, the timing of the IPO will ensure it gets extra attention, with the Labour Party having the most public of platforms to reiterate their opposition.

Ministers and Royal Mail management may hope that the Liberal Democrat and Conservative party conferences will send out a positive message to Royal Mail employees about privatisation and the benefits to them of the free shares. However, in doing so they will be appealing to CWU members over the heads of the union's leadership.

So while the Royal Mail prepares for the IPO, its hopes of making positive progress in ongoing pay talks with the CWU and avoiding strike action may have suffered a significant blow.