Union explores plan for workers' trust post privatisation

[TrueBlueTerrier]

Royal Mail union explores plan for workers' trust post privatisation

http://www.telegraph.co.uk/finance/news ... ation.html" onclick="window.open(this.href);return false;

Union leaders are considering plans to set up a workers' trust in Royal Mail, using the 10pc share stake being allocated to employees, as a way to increase their influence after privatisation.

The Union of Communication Workers has been reviewing its privatisation strategy and, while still opposed to the flotation, has been attracted by the approach adopted by employees in Eircom, the Irish telecom monopoly sold off in 1999.

Employee shares were used to create a trust and dividends set aside to buy more shares with the result that the employee shareholding is now around a quarter of the Eircom equity. Some CWU leaders feel a similar approach at Royal Mail would in time provide a powerful negotiating block but there is strong support for short-term action that could embarrass the Government and delay privatisation planned for October.

Postal workers are being balloted next month over industrial action in the dispute with Royal Mail over an 8.6pc three-year pay offer and changes in the final salary pension scheme. The prospect of a series of stoppages in the run-up to the share offer is increasing the pressure on Royal Mail to reach a settlement.

The CWU is set to increase the tempo in a separate dispute involving the Post Office, now independent from Royal Mail, involving closures, pay and jobs.

Nine one-day stoppages by Post Office staff have so far failed to produce any negotiating change, but the CWU is balloting members on action short of all-out strikes, such as a work-to-rule or disrupting counter business by refusing to sell insurance or other products.

Post Office managers are also being balloted by Unite, their union, over strike action in a move seen as an attempt to widen disruption.

The Post Office has been attempting to reduce the impact of the one-day strikes by ferrying managers around the country to limit the
damage to services.

[TrueBlueTerrier]

Trade unions plan postal trust to manage workers' 10 per cent stake in Royal Mail

http://www.thisismoney.co.uk/money/news ... ds-newsxml" onclick="window.open(this.href);return false;

Trade unions are trying to tighten their grip on the Royal Mail by setting up a new ‘workers trust’ to manage their 10 per cent stake in the firm.

The trust would control the stake the Government has promised for staff when the postal giant is floated on the London Stock Exchange later this year.

Unions will use the workers’ trust to influence votes on pay, pensions and conditions for 150,000 staff.

The Communication Workers Union is opposed to the £3billion float and is balloting its members next month over whether to strike over planned cuts to the final salary pension.

Most postal workers will not be allowed to sell the shares for three years, but Ministers are looking at allowing those near retirement to cash in shares immediately.

[DavidUK]

The Union certainly won't be getting it's hands on my shares if and when they are issued.

[cloherty1976]

Only 7.5% are union members do they expect the other proportion to give them there shares when they are clearly not members?

[borders]

Only 7.5% are union members do they expect the other proportion to give them there shares when they are clearly not members?

you seriously need to re- do your maths.
115,000 CWU members out of a workforce of 150,000 RM employees is a tad more than 7.5% !!

[cloherty1976]

Let me explain we are only getting 10% of shares to the workforce and when you take the non union members away that will be about a quarter leaving 7.5% of shares held by union. Hope this explains what I meant borders.

[borders]

yes thanks that does explain.

[wandle]

cloherty1976, your figures are wrong. All employees who are eligible to receive shares will receive them, regardless of whether they are CWU members. If the CWU are serious about this idea, they should be busting a gut to recruit the non-members before the privatisation.

Alas, there are too many employees that will just flog their shares at the first possible opportunity, three years after the floation (even though they will pay tax if they do this). Then another load will be flogged five years after the flotation (when you can sell with no tax liability). So, in five years time, I would guess that less than a tenth of employees will still be shareholders of Royal Mail plc. Meaning less than 1% of the total shares of the company will, by then, be held by CWU members.

If the CWU really want to gain some power within Royal Mail, they should - if they are unable to prevent the flotation going ahead - encourage as many members as possible to buy additional shares in Royal Mail (we will get preference in allocation, ahead of the general public). They should certainly be educating people into not selling the shares shortly after the 3-year period has ended. Shareholders have voting rights at Annual General Meetings (AGMs). This means that if the new company proposes things that we do not like, e.g. increasing the chairman/woman's salary by 20%, we can all collectively vote against it. Shareholders also receive income, in the form of dividend payments. At the moment, these dividends go to the government, as they own all the shares in Royal Mail. Post-privatisation, those dividends will be paid to all shareholders, including of course, all of us.

Selling shares as soon as it becomes permissible to do so is understandable, if they are worth say £1500-£2500. But when any individual offloads their share allocation, the shares are not purchased by the company. They will end up in the hands of some other investor, possibly one who intends to build up a stake in Royal Mail as a precursor to launching a full takeover bid for the company! You could, quite literally, be selling-out your future job when you offload your shares. If everyone is educated and persuaded to hold onto their shares, no bidder could ever attain complete control of the company, if 10% of the shares continued to be held by employees.

(also, on a practical note... if thousands of employees all simultaneously try to sell their shares on the 3rd and 5th anniversaries of the flotation, what will be the effect? A flood of sellers will depress the share price, meaning the amount people receive will be reduced )

[cloherty1976]

Wandle very well put but you miss my point. How can the union hold the shares of the 35000 non members unless they give there permission is all I was trying to get across. This is if you want to be more exact is nearer 2.3% ?

[TrueBlueTerrier]

Its a moot point and a bit of a monty python parrot - http://www.royalmailchat.co.uk/communit ... st#p580666" onclick="window.open(this.href);return false;