EXCLUSIVE: Post Office retailers vote for industrial action over PO refusal to increase pay

Post Office says it 'cannot afford' pay increase despite beating its sales targets in first half of 2022

Fascia Post Office

Hundreds of Post Office (PO) branch owners are planning wildcat industrial action in response the company’s refusal to increase remuneration at its half year business update last week.

The event also saw the PO announce the rollout of new mails services with different carriers.

Referencing ‘worsening’ trading conditions, Nick Read said at the event: “Whilst the first half has been good, with the uncertainty we face we cannot prudently make further remuneration increases now.”

Instead, Read called on branch owners to write letters to their MPs to ask for continued government energy bill support for their branches beyond the current March 2023 cliff edge.

Better Retailing understands campaign group Voice of the Postmaster, representing more than 700 branch owners, has polled its members on potential industrial action if no improvements were announced, with 94% voting in favour. A further vote as to what actions members support is underway, with ‘work to rule’ currently leading the poll.

If carried out, this would mean potentially hundreds of PO branches refusing to carry out ‘unpaid tasks’ such as back office work during the crucial December peak trading season.

Describing the business update, a spokesperson from the group told Better Retailing that postmasters had expected improvements including ‘a new banking incentive’ but were instead ‘offered more work with no pay increase.’ They said this came despite above forecast results in the results announced last week.

In its first half financial results, the PO saw its total sales increase by 10% to £412m while remuneration for branches increased by 6% to £202m. This included a package of support from the PO to branch owners in August including increased remuneration levels on some products and a one-off payment equivalent to 7% of each branches travel and mails income.

While banking, travel and bill payments were all up year on year, the key mails and parcels segment fell by more than 10%, which was described as ‘worrying and worsening’ as the year progresses by group chief finance officer Al Cameron. Cameron forecast that ‘unhelpful’ Royal Mail’s industrial action, increased competition and the economic downturn means the gains in other areas would be more than wiped out by continued decline in mails and parcels.

Group chief commercial officer Owen Woodley described the PO’s mails and parcels proposition as ‘no longer sustainable.’

Improvements underway

The half-year update also revealed new services, equipment and tools being developed for branch owners in order to cut costs and increase revenues.

The largest PO investment is its replacement for the scandal-hit Horizon till system. Read revealed trials of the replacement system begun at two sites in October, one in London and another in Yorkshire. “There will be further testing in 2023 before we have a system ready to rollout nationwide in 2024,” he said.

In mails and parcels, chief commercial officer Woodley outlined steps to ‘reduce our dependence’ on Royal Mail (RM) and mitigate the impact of RM’s upcoming ‘incredibly damaging period of industrial action’.

By mid-2023, branches will be able to sell RM tracked 24 and tracked 48 products in store. With other carriers, PO is to expand its pick up and drop off (PUDO) service with Amazon and/or DPD to 8,000 branches by March 2023. In click and collect, DPD Ireland and DHL will be launching a pilot with PO in January.

For the first time in the history of the PO, it will also start selling non-RM products in store before Christmas in around 50 branches. The sites are to be kitted out with Evri Parcel Shop self-service devices. Another pilot will see PO branches paid for accepting non-RM parcels and returns bought by customers online through a 30 branch test with DPD.

Other improvements for branches include ‘branch MOTs’ following a pilot in the East Midlands. Under the scheme area managers equipped with ‘tools to make improvements to workforce planning, sales and opening hours’ visit sites and make recommendations. “We’ve been able to demonstrate clear scope to improve branch profitability,” said Read.

Elsewhere, fuel cards have been provided for mobile PO operators, generating savings averaging £80 per route per month. Teller cash recycling machines are also being deployed in branches doing the most banking volumes. 13 are already installed with are target of 50 in branch by April and 100 by October 2023.

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