(Reuters) - Royal Mail (RMG.L) and the Communications Workers Union have appointed Lynette Harris of Britain’s Central Arbitration Committee to mediate in a row over plans to replace the company’s defined benefit pension scheme.
The talks, which will cover pay, pensions and other issues, will run for seven weeks and could be extended in order to reach a deal, Royal Mail said in a statement on Wednesday.
The CWU has been at odds with Royal Mail since April over its plans to save billions of pounds on its pension contributions and has attempted to call a strike.
Earlier this month Royal Mail won a High Court injunction that scuppered CWU’s plan to call a 48-hour strike during the crucial pre-Christmas delivery period.
Royal Mail said that mediation could take up until Christmas, or longer, to complete and that the CWU would still have to give a minimum of two weeks’ notice before striking.
Uncertainty over the outcome of pensions negotiations have long held back Royal Mail’s stock, which is lost about a fifth of its value in the last year, and its shares were down 1.3 percent at 378.3 pence at 1213 GMT.
CWU Deputy General Secretary, Postal, Terry Pullinger said in an email that the union, which has more than 100,000 members in Royal Mail, would reconsider striking if mediation failed.
“Our aim is to reach agreement but we will have no hesitation in naming strike action dates to defend our members and the service they provide if mediation fails,” he said.
Royal Mail, which was privatised in 2013, is trying to modernise after years of underinvestment and has taken steps such as reducing layers of management, upgrading its technology and selling off property.
However, its domestic parcels business has faced increased competition and uncertainty following Britain’s vote to leave the European Union has accelerated the rate of decline in its letters business, leaving the business struggling in 2016.
The company will report half-year results on Nov. 16.
Reporting by Esha Vaish and Noor Zainab Hussain in Bengaluru; editing by Alexander Smith