Royal Mail pay talks with union collapse

Talks to resolve a long-running row between Royal Mail and staff members over pay and conditions have collapsed.

Royal Mail says it is "deeply concerned" discussions concluded without agreement and claimed it made "substantial efforts" to reach a deal.

The Communication Workers Union said it was willing to continue negotiations.

Royal Mail said it remained "committed to reaching an agreement with the CWU" and said "not transforming" the company was "not an option".

The company said that it had increased its pay offer, offering 10% over three years plus a one-off payment.

Royal Mail said it also shifted on issues such as start times, profit shares for employees and allowances. The CWU said: "There has been progress in several areas and the union made it clear last night that we are willing to continue negotiations...to finalise an agreement."

Royal Mail has warned that a return to industrial action by the CWU could result in Royal Mail going into administration.

The company is concerned that further industrial action could lead to large customers - such as retailers - pulling multi-million-pound contracts.

In a letter to the union, Royal Mail said: "In talks, you suggested to us that you were 'becoming more comfortable' with the risk of administration.

"If so, that is very misguided. It is important that everyone is clear that, if our finances come under worse pressure, the legislation does not provide for re-nationalisation, but instead a system called special administration."

The government would have to approve a move into administration. This could mean all of the Royal Mail business - including the universal service obligation to deliver to every address six days a week - and Parcel Force declared insolvent.

Royal Mail says the strikes have cost the company £200m in lost business and in covering striking staff.

The CWU said it will engage with its members regarding its next steps, including the "unacceptable pressures deliberately being placed" on members through "imposed revisions" that could lead to a "failing quality of service".

The long-running dispute has led to several staff walkouts, including a strike over Christmas, the busiest time of the year for postal deliveries.

Part of the changes proposed by the Royal Mail include later shift start and end times for staff and revisions to mail delivery routes.

Recently, Royal Mail was the target of a cyberattack which disrupted mail sent overseas.

The firm was also referred by MPs to communications watchdog Ofcom for prioritising parcel deliveries over letters, which would be a failure to fulfil its legal obligations.

Workers across the UK continue to strike, mainly over pay which is not rising in line with the cost of living. Workers in sectors including nursing, the civil service, junior medics and rail have been holding periodic strikes since June last year.