Proposals for employee ownership of the Post Office

In February 1997, the trade union representing postal workers put forward proposals for employee ownership as part of giving the UK Post Office commercial freedom. In September, it was reported that this may be among the options the Government is considering.

Previous UK Governments had considered how best to privatise the public sector Post Office, but following the election of the Labour Government in May 1997, a review of the Post Office and its functions was announced in order to find other ways of bringing about commercial freedom. The Government has ruled out the previous options of privatisation or the breaking up of some of the post office services, but is looking at other ways of achieving what both management and staff are looking for.

Post Office senior management has asked the Government for a two-stage approach:

  • first, the commercial freedom which all parties seem to be agreed upon, and which would not require any immediate legislative changes by the Government; and
  • second, taking employees out of the sphere of public sector pay because management believe that staff are underpaid, compared with other communication workers, and introducing employee ownership to encourage the workforce. This would require some legislation, and includes turning the Post Office into a public corporation.

Employee ownership was one of the proposals in a consultative paper produced by the postal workers' trade union, the Communication Workers' Union, in February 1997 (UK9702106N)

All parties are aware of the need to improve employee relations within the Post Office. Bouts of strike action over recent years have accounted for a significant percentage (12% in 1996) of the UK's total days lost through strikes. In 1996, the unions carried out a series of one-day strikes over plans to introduce teamwork, and it is thought that similar action may take place in 1997 over the same issue.

Ian McCartney, Minister of State at the Department of Trade and Industry (DTI), said that employers and employees must "come together with a common approach and common objectives". Employee ownership is thought to be one way of achieving this. The proposal is thought to be that of offering employees a 49% share of the business, while the state would retain the overall control. Employees would then receive a share of Post Office profits, which in 1996-7 amounted to GBP 577 million. Another option under consideration is a profit-sharing scheme.

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