Royal Mail talks over pay on brink of collapse

Talks to resolve a long-running row with Royal Mail staff over pay and conditions are close to collapse.

Discussions are "precarious" and in their "last throes", with the next 24-48 hours key to settling the dispute, a source close to the talks said.

The Royal Mail board is reported as threatening to put the firm into administration if a deal is not done.

The BBC understands that there may be movement on the current pay offer to unions to try and resolve the issues.

"Administration is a real possibility for Royal Mail if the industrial action continues. It is not a negotiating ploy," the source told the BBC.

A separate source said that Royal Mail is in "uncharted territory" in terms of what would happen if it went into administration, but the unprofitable letter delivery part of the business would likely have to be split from the parcel delivery part.

A Royal Mail spokesman said the firm is "doing all we can" to resolve the dispute, and that the firm is "committed to getting the right deal".

But he said the firm has been "very clear about the damaging impact of strike action".

A CWU spokesman said it was "clear" that Royal Mail Group are in a "serious financial situation", but that this was due to "mismanagement and recklessness at the most senior level of the company".

"There is no positive future for Royal Mail without the support of the workforce," he added.

The government would have to approve a move into administration.

This could mean Royal Mail, including Parcelforce, is declared insolvent.

The dispute is not just over pay. Royal Mail is also trying to make changes to the way postal staff do their jobs including changes to start times and sick pay.

The long-running dispute has seen workers and management at loggerheads, leading to industrial action including a strike over Christmas, with further possible strikes.

The company has been beset by recent problems, including the prospect of further strikes, and a cyber attack which disrupted overseas mail.

'Crunch point'

Royal Mail has said it is losing £1m a day and that it is projected to lose more than £350m for the financial year ending in April.

It has said the strikes have cost the company £200m in lost business and in covering striking staff.

Talks between the company and the Communications Workers Union (CWU) have been ongoing since the end of last year.

In the past few days, Sir Brendan Barber, the former head of the TUC and ex-chair of conciliation service Acas, has been brought in to help facilitate the talks.

There is currently a pay offer of 9% over two years starting in April, including a 2% offer for 2022/23.

The business says modernisation is essential if the company is to improve its parcel delivery service.

The firm has been trying to move away from letter delivery, which it has said is unprofitable, but it is obliged to deliver letters to all parts of the UK.

The CWU has previously said that Royal Mail's management was trying to "casualise" the postal service and that they "want to turn it into an Uber-style employer".