Royal Mail employees are to be offered shares worth up to £2,000 as part of the organisation’s privatisation process.
Vince Cable, business secretary, has confirmed that the government will give Royal Mail staff 10% of shares in the organisation, following its proposed flotation on the the London Stock Exchange.
The government intends to award the free shares under a tax-advantaged share incentive plan (Sip) and Royal Mail will communicate more details to its employees in the coming months.
Eligible Royal Mail employees will automatically receive an equal number of shares, irrespective of their grade, and there will be a pro-rata allocation for part-time employees.
Employees will also have the option to opt-out of the scheme if they wish and have the option to buy extra shares through the retail offer, as well as be given priority when shares are allocated.
Cable explained that the scheme, which means employees’ shares will be locked in for at least three years, will ensure that Royal Mail staff have a stake in the organisation.
Cable said: “The government’s decision on the sale is practical and logical. It is also consistent with developments elsewhere in Europe.”
But Chuka Umunna, Labour’s shadow business secretary, said the government’s decision is confusing and that the Royal Mail is being ‘sold off on the cheap’.
Moya Greene, chief executive officer of the Royal Mail Group, said: “Royal Mail aims to combine the best of the public and private sectors. Our employees will have a meaningful stake in the company and its future success.
“As we move into the private sector, the current legal position is that all terms and conditions that apply to Royal Mail employees would remain in place, on the same basis.
“To provide further reassurance, we will create a legally-binding and enforceable contract with the [Communications Workers Union] CWU. Pay and protections could not be changed for the period of the contract without CWU agreement.”