Royal Mail – Consequences of Privatisation?

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The privatisation of the Royal Mail will cause a disengaged workforce that is continually worried about job security, according to shadow financial secretary to the treasury, Chris Leslie writes Tom Newcombe for HR Magazine.

Yesterday, the Government confirmed the privatisation of the Royal Mail “will begin in weeks”.
As part of the planned sale, about 15,000 UK-based Royal Mail employees are set to receive up to £2,000 worth of shares.

Speaking to HR magazine, Leslie said he is “worried” these shares will become “synonymous” with concerns over long-term job security and will create an “unhappy work environment”. He would rather employees stakes were associated with a positive involvement in the company.

“I think a lot of the workforce will be very confused and unsure what this shareholding will imply, but most attention will centre around how secure their jobs are going to be in the longer term,” he told HR.

Leslie was speaking to HR magazine after a discussion in central London yesterday with business leaders about employee share ownership.

He said the shares could be used as a “sweetener” for a transition period “any worker would be suspicious of”.

“£2,000 is not a level that will give employees security they want. This privatisation doesn’t feel like it is being driven at all in the interests of the staff,” he said.

Public betrayal

The Communication Workers Union (CWU) called the privatisation plans a betrayal of the British public and vowed to press ahead with a planned strike ballot on 20 September.

Billy Hayes, CWU general secretary, said: “This isn’t about what’s best for the Royal Mail, it’s about vested interests of Government ministers’ mates in the City. Privatisation is the worst way to access to capital, as it’s more expensive than borrowing under public ownership.

“Privatisation would put jobs and services at risk and lead to higher prices for customers. We’ve seen it happen time and again in other industries,” said Hayes.

On 2 September the CWU announced it would ballot for a national postal strike of Royal Mail workers, the first national strike ballot since 2009.

Other issues in the dispute include a 2013 pay claim and changes to pension terms. 

This month’s ballot will go out to 125,000 Royal Mail workers and if a yes vote is reached the first strikes could take place from 10 October. The results of the ballot will be announced on 3 October.

Business minister Michael Fallon said the privatisation was about securing the future of a business threatened by competition and the rise of the Internet.

“The six-day service will be protected. The six day-a-week, same price anywhere is protected by an act of Parliament. The only way it can be changed is by an act of Parliament and I cannot imagine a party campaigning on that,” he said.

Fallon added that it was “extraordinary” Labour shadow ministers were criticising the privatisation plans while refusing to commit to whether they would re-nationalise Royal Mail in the event of electoral success in 2015.

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