June 28, 2013 / 1:56 PM / 5 years ago

Britain's Royal Mail avoids staff boycott, for now

LONDON, June 28 (Reuters) - Britain’s Royal Mail said it had received an undertaking from the postal workers’ union not to induce its staff to boycott competitor mail, avoiding a potential headache ahead of its forthcoming privatisation.

Royal Mail had sought an injunction against a possible boycott after members of the Communication Workers Union (CWU) voted 92 percent in favour of supporting such action in a consultative ballot earlier this month.

The union said on Friday it had accepted legal advice not to undertake a boycott based on the ballot result alone, but was considering how action could be taken in future.

The CWU believes private sector rivals such as TNT Post, owned by Dutch mail group PostNL and which wants to launch a full rival UK service in five years’ time, could undermine Royal Mail’s ability to maintain a universal nationwide service by creaming off the most profitable services.

Postal regulator Ofcom has said it would intervene if direct competition threatened Royal Mail’s universal service.

A boycott could have involved 26 million items a day - including bills, statements and business mail contracts won by companies including TNT Post and UK Mail - go undelivered, dealing a serious blow to Royal Mail’s business.

An initial public share offer (IPO), which could value Royal Mail at between 2 billion pounds ($3 billion) and 3 billion, is expected later this year and banks have been appointed to run the flotation.

The CWU opposes the privatisation, arguing it will lead to a worse deal for customers and staff.

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