Negotiations to resolve a long-running dispute between Royal Mail bossses and workers are close to collapse, the BBC has reported.
The Royal Mail board has reportedly threatened to put the company into administration if an agreement is not reached.
The company has blamed strike action for its financial troubles, but the Communication Workers Union (CWU) has insisted the situation is down to “mismanagement and recklessness at the most senior level of the company”.
Is Royal Mail going into administration?
The BBC reported on Monday that talks between Royal Mail and unionised employees were “precarious” with the next 24 to 48 hours key to reaching an agreement. If a deal is not reached and more strikes are called, administration is a “real possibility”, a source said.
A Royal Mail spokesperson said the firm was “doing all we can” to reach an agreement with the CWU, but said the long-running strike action had been “damaging” to the company’s finances.
However, a union spokesperson insisted Royal Mail Group’s financial situation was down to “mismanagement and recklessness at the most senior level of the company”.
The CWU said progress has been made in the talks, but negotiations have not yet reached a point where an agreement can be recommended to the union’s membership.
More strikes would be called if the company refused to change course in negotiations and listen to workers’ demands on pay and conditions, the union warned.
This is a “hugely significant moment” where the “stakes have never been higher”, union leaders said in an update to CWU members.
What would it mean for post?
The Royal Mail board would have to seek approval from the Government before putting the company into administration. If the action were taken, it would mean that Royal Mail, including Parcelforce, could be declared insolvent.
In this case, the less profitable letter side of the delivery business could be split from the parcel side. i has previously reported how Royal Mail has been struggling to deliver letters with the business in its current state, with piles of post being left behind as staff contend with a higher workload.
The company has previously denied prioritising letters over parcels, but staff say their managers have told them to leave letters in sorting frames, or bring them back at the end of the day if they do not have time to complete the delivery.
This would mean the Universal Service Obligation, which requires Royal Mail to deliver letters to every address in the UK six days a week, is not always being met. The company is also obliged to deliver parcels five days a week under the regulations.
Why are Royal Mail staff striking?
Postal workers are looking to gain a pay rise which is in line with current inflation rates, but the walkouts are also over jobs and conditions. Royal Mail has said it needs to cut as many as 10,000 jobs by August.
The company is looking to transition more towards parcel delivery and away from delivering letters, which have dwindled in popularity. It previously made a request to the Government to stop delivering letters on Saturdays, which was denied.
Mr Ward has said: “We believe there are thousands and thousands more jobs at risk than the 10,000 the company has put forward. They are waging war on the current workforce. Psychological warfare to make the job not worth it. To force people out and replace the workforce.”
A Royal Mail spokesperson said: “Throughout the dispute we have highlighted the need for Royal Mail to transform, and been very clear about the damaging impact of strike action.
“We remain committed to getting the right deal, which secures the future of Royal Mail and its workforce – that would be the best outcome for our people, our customers and our shareholders.”