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RMH(11)114
ROYAL MAIL HOLDINGS pic BOARD
COMPANY SECRETARY’S REPORT
1. Information Rights Update (FOI & DPA)
Information Commissioner and Information Tribunal Cases
In September the Information Commissioner issued a Decision Notice requiring Royal Mail
to disclose anonymous data showing the total remuneration and pay bandings for the
unnamed top 15 highest paid employees in 2007/08 and 2008/09.
Information Rights Casework Performance
Freedom of Information Requests
Month Percentage of FOI requests Percentage of Internal Reviews
received processed within 20 working days I processed within 40 working days
May 2011 100% 100%
Jun 2011 95% 100%
Jul 2011 100% 100%
Aug 2011 *98% 100%
Sep 2011 *100% *100%
2011 +979 *4009
(to date) 97% 100%
* includes some cases which are still in progress.
Data Protection Subject Access Requests
Month SAR Applications Closed within 40 % Target Met
received Received Calendar days
May 2011 20 20 100%
Jun 2011 13 13 100%
Jul 2011 16 16 100%
Aug 2011 13 13 100%
Sep 2011 16 16 100%
2011 + *4009
(to date) 162 156 100%
* includes some cases which are still in progress.
2. Attacks, fraud, litigation
The regular reports on attacks against our people, and on major fraud and litigation cases,
are at annexes A and B.
3. Governance
The updated membership of the Chief Executives Committee and the Group Executive
Team is at Annex C.
Jon Millidge
Company Secretary
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October 2011
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ANNEX A
CRIMINAL ATTACKS ON ROYAL MAIL GROUP PERSONNEL AND AGENTS
Numbers of robberies and physical assaults on RMG staff for the year to date are outlined in
the table below.
2009/10 I 2010/11 I Variation I 2011/12 I Variation
P6 P6 P6
Royal Mail Robberies and 29 12 -17 21 +9
attempted Robberies
Royal Mail Assaults 100(33) I 97(20) -3(-13) 65(29) I -32(+9)
PFWW Robberies & 4 10 +6 6 4
Assaults
POL Robberies and 114 95 -19 51 -44
attempted Robberies
(= Causing harassment/alarm/distress)
Notes
+ Robberies are successful robberies and attempted robberies
+ Assaults are violence against the person. These exclude malicious communications, however, for 2009/10 onwards include
verbal assault, intimidation and harassment resulting in higher totals than for previous years
+ Royal Mail is Royal Mail only NOT Group
+ The figures in brackets are the number of assaults which do not include verbal assault, intimidation and harassment
Details of serious incidents since the previous report, including those involving firearms,
attacks on Cash in Transit crews and major cash losses are provided below:
Incident Reporting Period: Periods 5 and 6
Injuries Sustained to RMG Employees or Customers
2 August. Upper Holloway Delivery Office, London, N19. As the postman approached the
Post Office in Hornsey Road to make a delivery, he was punched on the side of the face by
one man who snatched the Special Delivery remittance pouch from him and ran off. The
postman was taken to hospital and it was found that he had a hairline fracture to his skull.
Following 2 weeks sick absence the postman returned to work and reassigned to light
duties. The stolen remittance pouch contained £5,000 in cash within two SD items. Police
enquiries continue.
1 September. East Belfast Delivery Office, Northern Ireland. A driver postman parked the
RM vehicle in a car park by a shopping centre and went to the rear of the vehicle to obtain
the items due for delivery. As he opened the rear doors, he was hit several times on the
back of the head by one person before being bundled into the rear of the van. The robber
proceeded to steal 9 Special Delivery items and normal mail before running away. The
postman attended hospital for a check up and was released later that day.
16 September. Winchmore Hill and Palmers Green Delivery Office, London, N21. A
postman on delivery heard an elderly member of the public shouting for help as his house
was being burgled. As the postman went to assist, four men ran from the house and one of
them hit the postman in the face causing a split lip.
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Suspect Package Incidents
During Periods 5 and 6, a total of twenty five suspect packet incidents were recorded in
accordance with the “Be aware stay calm” process. Following initial risk assessment twenty
one incidents were classed as neither suspicious nor malicious. Four packets were
identified as deliberate hoaxes and are the subject of police investigations, with none
harmful to staff minimum disruption caused.
Recoveries
During Period 5, Royal Mail Security successfully concluded sixteen prosecutions and
recovered a total of £13,000 to the Business, which brings the total recoveries Year to Date
to £70,000.
During Period 6, Royal Mail Security successfully concluded twenty six prosecutions and
recovered a total of £26,000 to the Business, which brings the total recoveries Year to Date
to £96,000.
Note: Recovery costs include Compensation, Proceeds of Crime Act and Investigation costs.
Large Cash losses
There were 4 high cash loss incidents in the Post Office Network where amounts over
£10,000 were taken. The total amount of identified cash loss is £154,443.43 plus stock at
£13,785.03.
Incident Date Office Cash Loss I Stock
ATM Ram 9 August Northborough Road, Streatham I £34,790.00
Raid
Burglary 10 August Brandlesholme SPSO, Bury £86,870.55 I £13,785.03
Armed 15 August Ryton on Dunsmore SPSO, £21,317.71
Robbery Coventry
Robbery 2 Fallowfield Sub Post Office 11,465.17
September
Although the sub postmistress was tied up during the Ryton on Dunsmore incident and
received minor bruising to her arms and legs, there were no other injuries sustained during
any of the incidents detailed above.
During the incident at Fallowfield Sub Post Office, a CiT delivery officer was threatened and
cash stolen — further details at the section entitled Cash in Transit.
Cash In Transit
There were 5 incidents in total during the reporting period with three of these incidents
resulting in a cash loss of £28,897.59. One of the incidents was an attempted snatch and
further details in relation to two of the incidents are detailed below.
2 September. Fallowfield Post Office. Three men entered the secure area after threatening
the counter assistant and waited for the CiT delivery. As the CiT delivery officer entered the
secure area, one man threatened to douse him in petrol if he didn’t hand over the iBox
containing £1,000. The iBox together with working cash from the Post Office was stolen
before the men fled the office.
2 September. Farringdon Road Crown Office, London, EC1. The CiT escort had collected
4
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several bags from the office when he returned to make further collections. As he
approached the siphon door, he was confronted by one man brandishing a large knife. The
escort stood back and the suspect entered the siphoned area and grabbed 3 RM sacks
containing Special Delivery items before fleeing the office to a waiting vehicle. Although
both the Post Office staff and the CiT crew member were shaken, there were no injuries
sustained during the incident. The three stolen SD sacks contained 62 items with a
compensation loss potential of £155,000. Police enquiries continue.
Audit Shortages
Since the last report, audit activity across the Post Office network has identified shortages
at 13 branches totalling £162,124.63. Of the total shortage amount, £ 27,279.35 has been
recovered and 7 members of staff have been suspended pending further investigation.
These figures are likely to increase as one office, Bruce Grove, suffered a fire destroying
information and the audit shortage figure is yet to be determined.
Other Incidents to Note
7 September. Milltown Sub Post Office, Belfast. An attempt to obtain cash from the office
by staging a hoax hostage situation was safely resolved without any injuries or cash losses.
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ANNEX B
MAJOR THEFT and SERIOUS FRAUD CASES
New Cases Raised
Short Name Description Status
Date Opened
Bacup Major intentional delay of over 10,000 1 RM Offender, : ; arrested by Police on 30" August.
August 2011 postal packets dating back to 2006. Released from bail pending legal services advice on charges. To proceed by
summons.
Warrington Major theft of mail bags. Theft of Special I Apprehended on 9" September 2011 following a
September 2011 Delivery items (mostly containing testing and surveillance operation by RM investigators. 2 mail bags recovered
jewellery) since 2010. containing 45 SD items. No comment interview. File being prepared for submission
to Criminal Law Team, Legal Services.
Station on 25" November 2011.
Oldham Major theft and intentional delay of postal I1RM Offender: _ ___...._ GRO ipprehended on 13” September following a
September 2011 packets. Over 30,000 items of mail testing and surveillance operation. Case subject to Legal Services advice around
suitable charges. To proceed by summons.
Edgware Revenue Fraud, major evasion of postage, I2 x External suspect “}Directors of
October 2011 estimated at up to £300k company; GRO ; who have posted Special Delivery items for 2 years through
a Branch Office without being invoiced by RM. Arrested on 3” October 2011. Bailed
to return to Police station on 24" January 2012. RM prosecution.
Cases Concluded
Sandhurst Major theft and intentional delay. Over 60,000 Tnx RM.Offender:I_ GRO}
September 2010 postal packets and a further 20,000 door to GRO charged with theft and appeared at Maidenhead on 29" November 2010.
door items recovered including 32,500 ‘Casé Committed to Reading Crown Court for plea and direction hearing on 9" March 2011.
damaged and over 500 mistreated, with Case postponed to 23" March 2011
contents missing. Not Guilty plea entered. Case warned for Trial at Reading Crown Court w/c 23 May 2011.
Withdrawn from Warned List as Defence have requested psychological report. Case
{GRO pleaded guilty to all charges and case adjourned to 22" August for sentencing, then
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further adjourned to 19" September.
Sentenced to 16 months imprisonment at Reading Crown Court 27" September 2011.
Greenford Major theft of mail bags -7 containing 250 i
March 2011 ‘special delivery items. Cash, jewellery etc Further interviewed. Admissions to theft of £22k worth of rings and a £2.5 k Cartier watch
in addition to cash. Case with Legal Services for advice regarding charges.
Sentenced to 18 months imprisonment at Isleworth Crown Court on 16" September
2011.
Erith DO Theft of Company cheques and subsequent 1x RM suspeci jpprehended following RM surveillance operation. 13
Kent fraud. plastic cards and Ԥ recovered during search. Individual arrested and bailed
MAY 2011
Bexleyheath Police Station on 2°’ August.
GRO Dleaded guilty to 5 offences of theft at Bexley Magistrates Court on 12"
ind was referred to Woolwich Crown Court for sentencing on a date to be
confirmed.
Received a sentence of 9 months imprisonment, suspended for 2 years together
with 200 hours unpaid Community work and £3600 costs.
Update to Previously
Reported Cases
Short Name Description Status
Date Opened
Darlington Major theft of 6 mail bags including 123 2 Offenders, 1 agency driver and 1 outsider arrested and interviewed on 2"? August 11.
June 2011 Special Delivery postal packets, most of Predominantly no comment interviews. Bailed to return to Barnsley Police Station on 13"
which contained passport applications
destined for IPS Durham.
September 2011. Both suspects charged with conspiracy to steal and case
committed to Crown Court. First appearance on 4" October. No pleas entered. Next
hearing in December 2011, date to be confirmed.
Weston-Super-Mare
July 2014
Delivery Officer in conspiracy to commit
burglary and theft by providing criminals with
the details of “Keepsafe” customers away on
holiday.
1 x RM offender, ‘ase heard at W-s-M Magistrates Court on 11" August
2011 when no plea entered and committed to Bristol Crown Court for a date tbn
No change
East London Mail
Centre
Major theft of Special Delivery items
containing currency-value £39k.
+ Charged with 3 counts of theft. First appearance 22" August
2011 at South London Magistrates Court.
Case committed to Crown Court. Plea and Case Management hearing on date in
November 2011, to be notified.
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Delta Data
November 2010
A number of external individuals trading as
‘Sole Traders’ or using ‘Trading Entities’ and
‘or mailing house type companies defrauded
end customers by means of understating
contract values. Additionally attempts were
made to defraud RM by way of understating
postings, producing fraudulent POL receipts in
an attempt to gain monetary rebates on
stamped postings and attempting to introduce
high volumes of unpaid for mail into the
pipeline. The value of loss to Royal Mail at
this stage this unknown. However, during the
period August and November 2010 whilst the
7 external offenders arrested on the 17/11/10 by police on suspicion of conspiring to commit
fraud and money laundering. All bailed to re-attend Swindon Police Station on the 26"
January 2011.
On answering bail 4 persons were charged with, ‘Conspiracy to Defraud’ and ‘Money
Laundering’.
Other charges have been offered in relation to non Royal Mail matters.
‘The 4 who are charged are due to appear at Swindon Magistrates on 25/2/11. Given that this
is a Conspiracy it will be an immediate committal to the Crown Court.
All 4 Defendants have yet to enter a plea and are next due to appear at Crown Court on 17"
June 2011.
No ch
joint Police/RM Investigation was progressing, 9 change.
the RP/investigation activity prevented Royal
Mail losing at least a further £115K through
fraud to these individuals.
Belfast: National Theft of mobile phones, prescription drugs 5.x RM Suspects: I GRO i
Return Letter Centre
January 2011
and miscellaneous.
Suspect identified steali 19 ile phones in full view of ii leagues, ome of
whom later attempted to discard stolen property and/or conceal their colleague's theft.
Several admissions in interview and additional property recovered.
3 suspects will not face prosecution. Awaiting prosecution decision by Public Prosecution
Service (PPS NI) on remaining 2. All 5 have been dismissed from RM.
No change.
Ipswich
August 2010
Theft of Special Delivery Items containing
currency from the Priority Service Enclosure.
1x RM Suspe
Apprehended following theft of an SD item. Subsequent enquiries into numerous previous
losses have led to 2 money laundering charges drafted under the Proceeds of Crime Act
2002 in the region c50K and a further charge of theft. To be charged on return from bail in
February 2011 and restraining orders to be applied for.
has been charged with 1 charge of theft and 2 charges of money laundering. At
the first appearance at Ipswich Magistrates Court on 11" April, the case was referred to the
Crown Court and the hearing has been scheduled for 13" June 2011
Plea and Direction hearing set for 23 September 2011. Likely not guilty plea and trial in
December 2011.
No change
West Central
Delivery Office
Major theft of DVDs, home shopping items,
mobile telephones, cash, Government
1x RM Suspect GRO I
Arrested by Police following a RM surveillance operation.
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London cheques, credit and debit cards, PIN Numbers IBailed to return to Belgravia Police Station on 10" May 2011.
February 2011 and 141 chequebooks. Further interviewed. Police bail until 2°* August when it is envisaged he will be charged.
Charged with 12 offences of theft and interference with the mail. At the City of
Westminster Magistrates Court on 30" August 2011 the case was adjourned for committal
to Crown Court on the 11'" October.
No change
Coatbridge Major theft and intentional delay. Over 12k 1 x RM Suspet pprehended following a RM operation. Case with Procurator
February 2011 items of mail dating back to 2005 recovered Fiscal.
from OPGs home address and further mail
bags recovered that had degraded to an
extent that mail was unidentifiable and
unquantifiable.
Prosecution ongoing. All mail including water damaged items now delivered with apology.
No change.
Finchley Church End
N3
March 2011
Major theft of company cheques ( loss in
excess of £350k)
1RM suspect! GRO (Employed as an agency casual using aliag. 8
Apprehended following RM surveillance operation Subsequently found to be a Tull time
employee of Parcelforce under the alias off Bailed to return to Colindale
Police Station on 10" May 2011.
Bailed to return to Colindale Police Station on 20"June 2011.
Charged with number of theft offences and next appearance at Hendon Magistrates Court
on 3 September for committal to Crown Court.
Case adjourned to Woolwich Crown Court for Plea and Directions hearing on 12"
October 2011.
Birmingham MC.
Major theft of chequebooks (RBS, Lloyds etc)-
May 2011 loss in excess of 500 books in 2011.
investigated by West Midland Police Economic Crime Unit. Case will be led by Police and
pl ited by Crown Prosecution Service.
: answering Police bail w/c 22/8/11 when he is expected to be charged with theft of
books and remanded in custody, awaiting trial, due to risk of flight — further bailed
until 2"* November.
No change
Plaistow DO Major theft of mail (Home Shopping, 1xRM suspect, GRO Apprehended following RM surveillance operation on 19"" MAY.
London E13 Financials) and intentional delay and Case to be forwarded to Legal Services for advice on charges. To proceed by summons.
May 2011 dumping. Estimated 15,000 2 theft charges advised by Legal Services. Summonses being applied for.
No change
Southwark DO Theft of Company cheques. Known fraud in 1 x RM suspect} japprehended following RM surveillance operation on 20" May.
London SE1 excess of £64k 35 items found in boot of car. Individual arrested and bailed to return to Walworth Police
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May 2011 > 29" July 2011.
_Appeared at South West Magistrates Court on 5" August 2011, where the case
was adjourned until 30" September 2011 for committal papers to be prepared.
Case adjourned to 2’ November 2011 for Plea and Direction Hearing.
Stafford Fraud-Fraudulent use of Smart Stamp 2 x Company Directors arrested and interviewed and premises searched under warrant.
June 2011 product. Duplicate impressions affixed to Computers seized. Both bailed to return to Watling House Police Station on 27"
postal packets by a model and hobbies
company-Wheelspin. Items going abroad.
Almost 500 items with an individual revenue
value ranging from £5 to £22. Estimated fraud
in excess of £6k.
September 2011.
Follow-up enquiries almost complete and Criminal Legal advice being sought.
Suspects further bailed to 15" November 2011.
MATERIAL LITIGATION
Short Name Description Status - this month’s update in bold italics
Date Opened
CWU/POL This matter relates to claims by the CWU in In August 2011 the Employment Tribunal found in favour of Royal Mail in that it had not
Protective award respect of W H Smith conversions that TUPE I breached the requirements to inform and consult in accordance with the requirements of
claim information and consultation obligations have I TUPE in relation to Post Offices which had been franchised to WH Smiths.
Nov 2007 not been complied with by POL. Oct 2011: Case concluded — no change. This item will therefore be removed from
the next report.
BT Occupational
Disease Test Case —
Nov 2008
BT have claimed, as a test case, an 1.
indemnity/contribution in relation to an
asbestos claim settled for £119,000 together
with a declaration that liability to compensate
telecom employees who ceased employment
by The Post Office Corporation prior to 1
October 1981 (appointed date under the
British Telecommunications Act 1981) rests
with Royal Mail.
Liability in relation to these ex —- employees
concerns mainly the contracting of asbestos
related diseases as well as some industrial
deafness cases. Some asbestos related
diseases (such as mesothelioma) have a
BT succeeded in this case in the Court of Appeal and RMG was refused leave to appeal to
the Supreme Court in February 2011. This case is now therefore concluded. RMG retained
auditors, Towers Watson, their best estimate of the potential for industrial diseases claims
against Royal Mail as circa £75m (unadjusted for the time value of money). Using a
discount rate of 5% as a proxy for the risk free rate (based on government bond rates for
the term of the provision), a provision of £30m has been raised at the year end. This will
be reassessed on an annual basis as Royal Mail gains more experience of the level of
claims received.
Oct 2011: Provisions in the accounts will continue to be made (and will be revisited)
and the discount will be unwound going forward. As the test case litigation has
concluded, this item will be removed from the next report.
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particularly long period between the exposure
and the development of the disease (the
disease takes 15 to 20 years to develop, the
amount of time between exposure and
development is between 8 and 50 years). The
heaviest period of exposure was between
1955 and 1975. We have received 80 cases
since 2001.
Amazon — October 2.
2011
Amazon has claimed that Royal Mail over 3.
charged it for 16 months (from 1 April 2010 to
31 July 2011) by £7.2m.
Oct 2011: Although litigation has been threatened, Amazon has not yet issued a
legal claim and settlement discussions are underway.
Manpower — Octobed.
2010
A routine audit of contractual compliance in 5.
2010 revealed serious problems with
Manpower's charging practices. The amount
of the claim is up to £24m, although certain
heads of claim are stronger than others.
Oct 2011: A mediation will take place on 11 October. If a settlement is not reached
at the mediation we will use the next few months to seek the best possible
settlement offer. If an acceptable deal is not achieved we will seek authority to
issue Court proceedings after the critical Christmas period.
High St Kensington 6.
November 2010
RMG sold this property for £20m in 2008. It 7.
transpired that the purchaser had not been
incorporated at the time of sale: it is not
bound to purchase the property and refuses to
do so at this price. We seek specific
performance / damages of c.£8m from
Maples Teesdale solicitors, who signed the
contract on the purchaser's behalf.
Oct 11: Maples Teesdale have refused to pay the deposit or complete the purchase.
We have prepared a letter before action as a final step before issuing Court
proceedings. We will attempt to settle this claim before proceedings are issued.
Horizon claims —
August 2011
8.
We have received four letters before action 10)
from a firm acting for former subpostmasters
who were dismissed when discrepancies
between their branch accounts and cash
positions were discovered. Two of the
claimants previously pleaded guilty to false
accounting in criminal prosecutions brought
by POL.
Each claimant alleges wrongful termination of
contract (based on alleged failings in POL’s
processes and computer system) and seeks
c.£150k in damages. We may receive a large
number of similar claims - possibly between
Oct 11: The key legal issues arising are common to all the claims but the factual
allegations are different. Our strategy is to defend each claim robustly to deter
future claims and we will be responding to each in full. At present we consider the
legal claims to be weak and the damages claims to be inflated.
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9. I 55 and 150 according to press reports.