UK postal workers’ union issues strike warning to Daniel Křetínský

The UK postal workers’ union has issued a strike warning to Czech billionaire Daniel Křetínský if he fails to meet their demands in his Royal Mail takeover bid, raising the threat of industrial action that has dogged the company in the past.

Dave Ward, general secretary of the Communication Workers Union, said the group had decided to “take whatever steps necessary to protect” employment conditions and Royal Mail’s universal service obligation to deliver letters and parcels across the country for the same price.

“There are certain things that if they are attacked, we would take industrial action. We would call a ballot of our members,” he told the Financial Times, adding the union would also challenge a separation of the group’s struggling letters’ business and its more profitable parcels operation.

Ward’s comments come after Křetínský’s EP Group, the largest investor in Royal Mail owner International Distributions Services (IDS), made a £5bn offer including debt for the group.

This is despite long-simmering tensions between management and postal workers that have exacerbated Royal Mail’s struggle to turn a profit and maintain service levels in recent years.

IDS on Wednesday said it was “minded to recommend” the offer to acquire Royal Mail and its separate Netherlands-based parcels business GLS after rejecting EP Group’s initial bid in April.

Analysts have suggested a takeover of IDS could lead to a break up of the business that would isolate Royal Mail, which faces falling letter deliveries and strict regulatory targets, from the more profitable parcel group GLS.

Křetínský has made clear in negotiations his intention not to separate Royal Mail from GLS or touch the group’s pension scheme surplus and to avoid compulsory redundancies, people familiar with the matter have previously said.

However, shares in IDS were trading at 322.8p on Friday, significantly below EP Group’s latest offer of 370p a share earlier this week, signalling some investor scepticism over the prospects of a deal, particularly as a general election looms.

“The market price is telling us that investors are sceptical as to whether this offer will succeed,” said one top IDS shareholder.

Jeremy Hunt, the chancellor, said on Friday that a bid for Royal Mail would be subject to “normal” scrutiny on national security grounds.

“As a rule, we welcome international investment in British companies,” he said, according to Reuters.

“But we do always look at national security considerations to make sure that in terms of our core infrastructure, there are no risks to those going forward and any bid for Royal Mail will go through that normal process.”

Ward’s warning over industrial action threatens to repeat an 18-day walkout in 2022 over management’s plans to adapt employment terms in line with its competitors, handing rivals such as Amazon and DPD the opportunity to grab market share from the former state-owned mail service.

Although Royal Mail and the CWU reached a deal last year on pay and employment terms, Křetínský’s offer has reignited the union’s fears over the company’s direction as it faces competition from rivals who recruit delivery workers on lower-paying and more flexible contracts.

IDS on Wednesday said EP Group had agreed to offer a “set of contractual undertakings to protect key public interest factors and recognise Royal Mail’s status as a key part of national infrastructure”.

These included protecting employees’ rights and continuing to recognise unions, protecting Royal Mail’s name and brand, and maintaining the company’s base in the UK. Royal Mail’s “one-price-goes-anywhere service” and delivery of first-class letters six days a week would also be maintained under the proposals, IDS said.

After meeting IDS chief executive Martin Seidenberg and chair Keith Williams, UK business and trade secretary Kemi Badenoch welcomed the contractual undertakings agreed with EP Group. But she said details of these would be for the government to consider and agree.

The top IDS investor added: “The new bid is an improvement on the previous one. There are clearly some trade-offs though — if the company is asking for commitments from the bidder, then one would expect those ‘costs’ to be reflected in the price being paid.”

Ward warned “we have to balance [Křetínský’s reported assurances] with the reality of this guy as a business person”.

“We need more than assurances . . . We will need a very detailed discussion with Křetínský and his people about what are their plans for the future.”

A representative of Křetínský declined to comment.