Royal Mail is facing strike action after four weeks of negotiations on pension reforms ended in stalemate.

In the same week the company was relegated from the FTSE 100 to the FTSE 250, the CWU said it is yet to decide whether to ballot members on industrial action.

A CWU spokesman told MT: “We have finished four weeks of talks with no resolution and so the executive will meet tomorrow (5 September 2017) to decide whether or not to ballot members on industrial action.”

Broker Liberum recommended Royal Mail shareholders sell their shares this week.

In a brokers note, Liberum’s transport team warned that any industrial action at Royal Mail will accelerate the ongoing shift from letters to email and result in it losing share in the parcels market.

It added: “Even if corporate customers do not abandon Royal Mail altogether, once competitors have a share of a customer’s business, they are better positioned to continue to take market share. Furthermore, a key selling point of Royal Mail's service has been its reputation for operational robustness and reliability, which can only be tarnished by industrial action.”

Liberum also pointed to a recently published opinion piece by CWU general secretary Dave Ward, which calls for Royal Mail to be renationalised, as evidence that the dispute could escalate.

In the opinion piece Ward said privatisation had resulted in “hundreds of millions of pounds being paid out every year to hedge funds” and called for political change.

He said: “Royal Mail should be brought back into public ownership. We cannot allow unelected regulators to take their cue from the city in pushing socially destructive business models.

"And we need a bold new deal for other workers in the sector that brings an end to the exploitation that should have been consigned to the Victorian era.”

Responding to Ward’s piece, Liberum said: “Expanding the dispute to include issues beyond Royal Mail’s control, such as renationalisation, regulation and the downstream access arrangements that require Royal Mail to deliver mail on behalf of other companies, point to an attempt to engineer a dispute that management cannot resolve.

"In our view, this points to a high probability of industrial action.”

However, a spokesman for Royal Mail said: "Royal Mail is very committed to actively negotiating with CWU on pay, pensions and other issues.

“We believe there are no grounds for industrial action. Any potential ballot in the future does not mean there will be industrial action. Industrial action – or the threat of it – undermines the trust of our customers.

“Under its proposals, as part of the ongoing negotiations, Royal Mail would continue to provide the best pay and terms and conditions in the industry. There would be no change to our core terms and conditions, such as sick pay, holiday pay and our commitment to permanent employment for the vast majority of the workforce.”

The operator added that the changes were about meeting customer needs.

“They include adopting new working methods, new technology and a new labour model that makes the best use of our resources. A more flexible and adaptable Royal Mail is the best way to secure as many high quality jobs as possible at the company now and in the future,” the spokesman added.

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