Royal Mail workers vote to strike in blow to UK postal service

[LONDON] Royal Mail Plc workers voted to strike, potentially throwing the world's oldest postal service into disarray and jeopardising attempts to drive growth.

About 110,000 workers could take part in the walkout, the UK's Communications Workers Union said on Tuesday. More than 97 per cent voted in favor of the action. The labour group did not immediately say when it plans the stoppage.

Royal Mail, which was publicly owned for almost five centuries, is battling with the shift to online messaging from letters and is seeking a greater share of the growing market for parcels. In May, the London-based company slashed its dividend to free up £1.8 billion (S$3.14 billion) for a planned overhaul after earnings fell.

The CWU has accused Royal Mail of not honouring an agreement it reached last year that covered issues such as shorter working weeks, pensions and job security.

Royal Mail was state-owned until 2013, when then Chancellor of the Exchequer George Osborne sold the service to reduce the nation's debt. The initial disposal of a 60 per cent stake was heavily criticised for underestimating demand and therefore under-pricing the company, and the stock at first soared above its initial public offering price of 330 pence.

The shares have since slumped, and are down 20 per cent this year.

BLOOMBERG