The executives of Royal Mail have reportedly considered the possibility of placing their struggling postal business into administration due to an ongoing dispute with the Communication Workers Union (CWU).
This move is seen as a last resort, as the business is expected to incur losses between £350mln and £400mln this year.
Despite some progress made earlier this year in negotiations with the CWU, talks have recently stalled over issues related to pay and changes in working practices. In the event that discussions break down, the CWU’s national executive will meet to discuss further industrial action.
While Royal Mail and its parent company, International Distributions Services PLC, are still in favour of a negotiated solution, reports indicate that special administration under the Postal Act is being explored.
This move would only involve those parts of the business that are subject to the universal service obligation, meaning that Parcelforce and some parcel operations would be unaffected. However, this could lead to additional job losses for Royal Mail’s 140,000-strong workforce.
Approval from the government would be required for any such decision, and it is unclear who would be appointed as administrator to oversee the postal service if this were to occur.
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