The Communication Workers Union (CWU), which represents Royal Mail Group workers, has voted by 97.6%, on a 77% turnout, to take action. This represents the biggest mandate for strike action ever reached since the 2016 Trade Union Act was implemented.

The union is demanding that Royal Mail group enters into negotiations to secure a “straight, no-strings” pay increase for workers.

But CWU said company management decided to executively impose a 2% pay rise on its employees, who were designated key workers at the height of the pandemic, in an economic climate where RPI inflation has soared to 11.7%.

Any strike dates are yet to be decided. Should strike action take place, it would likely be the biggest industrial action taken by workers this summer.

CWU General Secretary Dave Ward said: “This stunning result is a testament to the phenomenal efforts made by CWU members across the country. It is also a vote of no confidence in Royal Mail’s CEO and board, who should seriously consider their futures in our industry.

“Crucially, the vote can leave no doubt that postal workers are united, and that they are demanding the proper pay rise they deserve. While bosses rake in £758m in profit and shareholders take £400m, workers are expected to take a serious real terms pay cut.

“Postal workers won’t accept their living standards being hammered by bosses who are typical of business leaders today – overpaid, underqualified, out of their depth.

“In our country right now, corporate failure gets rewarded over and over again. It’s pathetic that CEOs take home lottery win salaries then offer real terms pay cuts to people who made them their profit. It’s unacceptable that bosses use Swiss banks while workers use food banks.

“The CWU’s message to Royal Mail’s leadership is loud and clear – not a single postal worker in this country will budge until you get serious and give them a dignified, proper pay rise.”

CWU Deputy General Secretary Terry Pullinger said: “Today’s vote was a terrific demonstration of the power and unity of CWU members. It shows that our members know full well what they are worth, and that they are willing to fight for the no strings, real terms pay rise they’re entitled to.

“This union never wanted to be in this position. Since the beginning of this dispute, we wanted discussions and negotiations with management. But this was rejected by management, who have left us with no choice but to fight their disgraceful imposition.

“This was a miscalculation on their part, and there were never going to be any question of our members accepting this assault on them.

“Our members deserve a pay rise that rewards their fantastic achievements in keeping the country connected during the pandemic, but also helps them keep up during this current economic crisis. We won’t be backing down until we get just that.”

In response, a Royal Mail spokesperson said: "We are disappointed that CWU members have voted in favour of industrial action.

“We offered a deal worth up to 5.5% for CWU grade colleagues, the biggest increase we have offered for many years, which the CWU rejected. We can only fund this offer by making the changes that will pay for it and ensure Royal Mail can grow and remain competitive in a fast-moving industry.

“Despite nearly three months of talks, the CWU have not engaged in any meaningful discussion on the changes we need to make to adapt.

“Ensuring we can change, at pace, is the route to protecting well-paid, permanent, jobs long term and retain our place as the industry leader on pay and terms and conditions. That is in the interest of Royal Mail and all its employees.

“In the event of industrial action, we have contingency plans to minimise customer disruption and will work to keep people, businesses and the country connected.”

Royal Mail noted that a ballot result for industrial action does not necessarily mean there will be industrial action. It said there will be a minimum notice period of 14 days between notification and the beginning of any strike.

Meanwhile, ahead of its AGM this morning Royal Mail Group released its Q1 results today (20 July), which showed that revenue at the group’s Royal Mail business fell by 11.5% year-on-year in the first quarter, reflecting weakening retail trends, lower test kit volumes, and a return to structural decline in letters.

It recorded an adjusted operating loss of £92m, reflecting inflexibility in the cost base to adjust to lower volumes and disappointing performance on delivery of further efficiencies.

Total parcel revenue at Royal Mail dropped by 15.1% year-on- year in Q1, with international parcel revenue hardest hit at 20.7% down. Letters revenue was down by 6.7% in Q1.

Progress on the company’s Pathway to Change initiative has stalled, creating an £100m risk to £350m of benefits identified for the financial year 2022-23, but other cost saving programmes are on track, albeit with headwinds from recent increases in absence due to Covid-19.

The group said Royal Mail’s Q1 performance emphasises the need to act now to make the most of its new infrastructure, find more flexible ways of matching resource to workload, and ensuring it has a more agile and sustainable relationship with the CWU.

Looking ahead for the 2022-23 financial year, the company is anticipating a weaker parcels market and lower than anticipated efficiency savings in-year. It said that providing progress can be made on the above actions, the business is now likely to be around breakeven at adjusted operating profit level, excluding any impact from industrial action.

Volume in the group’s overseas parcels business GLS declined by 3% year-on-year in Q1, although it saw revenue growth of 7.8% in Sterling, (9.8% in Euros), including acquisitions, and benefitted from better pricing and higher freight revenues. It recorded an operating profit of £94m (€112m), which was broadly in line with the prior year.

Royal Mail Group said the holding company Royal Mail plc is set to be renamed International Distributions Services plc to reflect the group structure of the two separate companies (Royal Mail and GLS).

The group said its intention “is to have clearer financial separation with no cross subsidy, reflecting the increased importance of GLS to the group and our position in the wider logistics and distribution markets”.

It added there will be no impact on Royal Mail and GLS brands and that in the event significant operational change within Royal Mail in the UK is not achieved, the board said it would consider all options to protect the value and prospects of the group, including separation of the two companies.

Royal Mail’s share price was down 2.97% at the time of writing at 276.52p, a slight recovery on its position of 267.6p in early trading.