Royal Mail boss could be ‘quietly released’ within months after delivery group strikes deal with unions
The beleaguered Royal Mail boss could be gone within months after the delivery group struck a deal with employees to end a long-running dispute that paralyzed the company.
Simon Thompson has been trying to push through plans to modernize the company despite fierce opposition from the Communication Workers Union (CWU), which represents about 115,000 posts.
The dispute sent workers on strike for 18 days last year and wreaked havoc on the company’s finances, with Royal Mail warning it was losing more than £1m a day.
The 507-year-old company also said it would have to bring in administrators if the situation didn’t improve.
Busy: Royal Mail boss Simon Thompson (pictured) tries to push through plans to modernize the company, despite fierce opposition from the Communication Workers Union
A breakthrough in the dispute, which has been going on for almost a year, was secured over the weekend when the two sides announced they had reached an agreement ‘in principle’.
The news helped up shares in Royal Mail parent IDS by 6.6 per cent, or 15.2p, to 246.8p.
CWU bosses met yesterday and will meet again today to discuss the proposals before deciding whether to put them to a vote by union members, the Mail understands.
But a source close to the case said Thompson’s name would not appear in the tentatively agreed deal between the two parties.
They added that there was a “mutual understanding” between both the company and the CWU that the embattled CEO’s reputation “no longer carries much weight.”
The source also expected Thompson to be “quietly let go in the coming months,” but did not speculate on who could replace him at the top of the company.
He came under fire from MPs last month when the House of Commons affairs committee accused him of “an unacceptable level of incompetence or an unacceptable level of ignorance” in his business operations.
The commission also said Thompson ‘deliberately or unintentionally’ misled MPs and called on watchdog Ofcom to investigate – leading to a further broadside from the regulator saying the company’s postal service was ‘well short of where it should be’ .
Victoria Scholar, head of investment at Interactive Investor, said: ‘The agreement marks an end to the group’s period of heightened uncertainty.
“If the agreement ends the recent strike action, it will be a big win for the company as it looks to move its employee conflict to the rear-view mirror.”
But analysts at broker Liberum were more skeptical, noting that it was “not guaranteed” that CWU members would approve the deal if put to a vote.