Post Office accounts for two-thirds of industrial action in Britain

Labour relations at the Post Office are 'nothing short of a disaster', with the organisation accounting for an amazing two-thirds of all industrial action in Britain, according to ministers. MPs believe its strike record could be the biggest barrier to it exploiting the commercial freedom that was yesterday promised by the Government. Barrie Clement, Labour Editor, reports.

The Post Office has quietly abandoned its plan to introduce team-working for delivery and sorting staff, the issue at the centre of eight damaging 24-hour strikes. Despite a demand by management that employees' leaders should discuss the issue as part of the settlement of the dispute, no consensus has emerged and after 18 months the talks have run into the sand.

Meanwhile, management has been involved in scores of industrial skirmishes with the Communication Workers' Union at a local level, although management argues that the atmosphere has improved considerably in recent months.

In a report published yesterday the all-party Commons Trade and Industry Committee repeated a call for the Post Office to remain in public hands and reiterated its view that it should enjoy more scope to raise money and compete in new markets. The document, however, adds: "A demonstrable and sustained improvement in industrial relations is required for the Post Office to be able to enjoy the anticipated benefits of the commercial freedom it seeks."

Industrial relations at the organisation were described as "poor" and the committee said that the problems should be addressed with urgency. "There is mutual suspicion and frustration at the inability to reach an agreement on the matters which led to the very damaging 1996 industrial action," the report said.

A spokesman for the Post Office insisted that there had been a "dramatic improvement" in labour relations and that industrial action at the organisation now accounted for about one-fifth of all days lost through strikes. He said official figures showed that in 1996-97, some 811,000 days had been lost, almost exclusively at the Royal Mail and predominantly because of the national 24-hour stoppages. The year before the figure was 63,000 and in 1994-95 it was 38,000. In the nine months to the end of December only 1,761 days had been lost, he said.

The spokesman confirmed that negotiations over team-working had come to a halt, but said the Post Office kept in contact with the union. Management was still keen to discuss new working methods and productivity with the CWU. "We hope we will be talking soon," he said.

Having taken it to task over the management of employees, the report ventured that the Post Office could now "reasonably look forward" to obtaining some of the commercial freedom it was seeking. The committee expressed surprise that the Department of Trade and Industry took until last November to complete its consultation exercise on the future of the business. Speedy progress was needed, the report said.

The monopoly on delivering letters should not be undermined, but the system of financial controls should be modernised.

Ian McCartney, trade minister, said he wanted to give the Post Office fresh opportunities. "The Government's review aims to give the business greater commercial freedom, to meet the demands of customers in the rapidly developing and increasingly competitive international postal market."

It is understood, however, that the Government will insist on continued 100 per cent ownership by the state. That means that joint ventures with other companies would be problematical because they would automatically be underwritten by the Government and potentially in breach of European competition law.

The Treasury is also keen that the business remains within the Public Sector Borrowing Requirement and that it should not be granted an ability to raise money in private capital markets.

Mr McCartney added that the Government remained committed to a universal postal service and the nationwide network of post offices. Both the Post Office and the union welcomed the general thrust of the Commons document. John Roberts, chief executive of the Post Office, said that a positive decision on the future of the organisation was "more critical" every day.

He said that while he would welcome the immediate extension to the Post Office of short term concessions, there could be no substitute for radical structural reform.

The chief executive said that five foreign post offices had set up sales offices within 20 miles of central London in the past five years. That was an indication of the "relentless pressure" of increasing competition.

Derek Hodgson, joint general secretary of the union, said he welcomed the committee's report.

"I am delighted that the committee have taken a positive and radical approach which we endorse in so many areas. It gives me great hope for the DTI review," he said.