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Royal Mail gets early Christmas present as Court of Appeal backs interim injunction against strike action

On 13 November 2019, the High Court ruled that a postal ballot of Royal Mail employees for industrial action was unlawful

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Christmas came early for Royal Mail PLC (LON:RMG) on Thursday, after the mail delivery group confirmed that the Communications Workers Union (CWU) has been unsuccessful in its application to the Court of Appeal to overturn an interim injunction against strike action granted by the High Court

On 13 November 2019, the High Court ruled that a postal ballot of Royal Mail employees for industrial action was unlawful and granted an interim injunction.

The injunction prevents any industrial action being taken before the completion of a lawful ballot, resulting in a vote in favour of industrial action, and formal notification to the company of any action.

In a brief statement released after the London market close on Thursday, Shane O'Riordain, the company’s managing director of Regulation and Corporate Affairs said: "Royal Mail is pleased that the Court of Appeal has upheld the High Court's decision to grant an interim injunction against CWU meaning that no industrial action can be taken before the completion of a lawful ballot. This decision still stands.”

He added: “We did not take the decision to go to the High Court lightly. We sought to reach resolution outside the courts. It is vital that our colleagues are able to vote without any constraint imposed upon them by any other party.”

O'Riordain concluded: “We want to reach agreement. As previously announced, we have written to CWU to say we want to enter into discussions without preconditions. Following this offer, we are hopeful that we can now follow on with meaningful discussions with the union to resolve this dispute.”

In a note on Friday, analysts at Peel Hunt said that although the ruling was helpful for Royal Mail, they did not see the ongoing dispute with the CWU as “conducive to the cost reductions that Royal Mail must make in order to offset expected mail volume pressures”.

Analysts added that they did not expect the union to settle the dispute quickly, as it would allow workers to “make a lot of threats over future strikes and disruption, particularly ahead of the general election”.

Meanwhile, analysts at Bernstein have downgraded the company to 'market perform' from 'outperform'.

In early trading on Friday, Royal Mail's shares were down 1.2% at 215.2p.

--Adds broker comment, changes and share price--

Quick facts: Royal Mail PLC

Price: 227.4 GBX

LSE:RMG
Market: LSE
Market Cap: £22.74 m
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