The Communication Workers Union (CWU) is worried about plans to transform Royal Mail Group's (RMG) express parcels arm, Parcelforce Worldwide (PFW), into a separate limited company, underlining that it has not received the assurances it has sought, notably with regard to job security.
Parcelforce operates a hub and spoke collection and delivery system with 54 depots across the UK feeding three highly-automated tracking and sorting centres. Its international operations centre processes 35,000 parcels (import and export) per day to 240 countries and territories worldwide.
In the year ending March 2019, PFW increased its global parcel volumes by 1% to 100 million parcels, compared to 2% growth in 2017-18 financial year, largely due to a customer withdrawing from the online retail market during the year.
In a statement on Parcelforce's future strategy, CWU noted: “Parcelforce informed the union in early 2019 that they wished to explore a scenario where they had more managerial and commercial autonomy within the Group and could differentiate their future strategy from the widely reported Royal Mail Parcels strategy, announced on Capital Markets Day (CMD), which we are aware caused a degree of uncertainty amongst our PFW members and activists.
“Informal discussions have taken place with the business on a strictly commercially confidential basis. The business was explicit at the outset that they were not presenting a proposal but wished to engage in informal scoping discussions, which the union agreed to on a without prejudice basis. Following those informal talks, in April 2019 the union advised the business that we would not be in a position to support any proposal which entailed the creation of a limited company and the requirement for TUPE ('Transfer of Undertakings, Protection of Employment regulations).”
The union said that RMG's CEO, Rico Back, then informed it in July that the business intended to proceed with the change and a formal proposal was received on 29 July 2019. Further discussions have since taken place.
CWU's statement continued: “The union’s prime intention in these talks was to understand whether there was the necessity to establish a separate limited company to achieve the greater commercial and operational freedom within Royal Mail that PFW desires. We also sought to achieve the most robust commitments from both Royal Mail and Parcelforce on a range of issues, to ensure that any change activity would provide the maximum protections for our PFW members and not result in any detriment to Terms & Conditions and job security, either now or in the future.
“As a priority, we sought assurances that RMG would not sell, divest or enter into a joint venture in relation to Parcelforce Ltd now or in the future and that it would remain an integral part of RMG. We also sought a commitment that the plan did not signal the breakup of the group and that no further plans exist now or in the future to create further limited companies within RMG.”
The CWU said the company’s responses had failed to convince it of the requirement to create a limited company and invoke TUPE in relation to PFW employees. Nor did they provide what the union considered “acceptable responses” to the assurances that were sought. “We also believe that the proposal is a breach of the spirit and intent of the Legal Contract between Royal Mail Group and the CWU.”
As a result, the union wrote to Parcelforce earlier this month informing them that the proposal is now the subject of “a National Disagreement,” and invoking the Dispute Resolution Procedures (DRP) contained in the Legal Contract between RMG and the CWU.
No one was immediately available to comment at RMG today on the topic of Parcelforce.
Separately, more than 100,000 Royal Mail staff are to be balloted for possible strike action this autumn in a dispute over job security and terms and conditions of employment. Members of the Communication Workers Union will vote in late September, with the result due on 8 October.
The CWU says an agreement reached with management last year to raise pay and reform pensions is not being honoured.
In a brief statement last week, Royal Mail said: “We have not received formal notification of a ballot from CWU. We are disappointed that they have set out a ballot timetable while discussions are ongoing.
“We are committed to open and constructive engagement with the CWU. We all want a successful and sustainable company that provides good quality jobs, fairness in workloads, and continues delivering the Universal Service.”
