More than 1,000 postal workers at Northampton's rat-infested sorting depot will now be balloted for strike action after a break down in talks over its pension scheme.
In April Royal Mail calculated that the annual costs of maintaining its pension pot would triple to £1.3 billion a year if no changes were made and made a more affordable pension offer to staff in July.
The Communications Workers' Union (CWU) rejected the offer, which would have cost the FTSE 100 company £400 million a year.
Yesterday, general secretary for the CWU Terry Pullinger announced that the union would be balloting for a potential strike after negotiations hit an impasse.
Area processing rep for the CWU Gareth Eales said: "As we haven't made significant progress during the national talks we will be balloting members.
"They will be dispatched next week and we fully expect a massive show of support from our members.
"The Royal Mail Group needs to have a significant rethink or they will face significant disruption."
Mr Eales said the industrial action could well involve a strike over the Christmas period, the busiest time of the year for the postal service.
He claimed staff morale was at a low, adding that employees have been working among rats at Swan Valley "for several weeks".
He said: "With a depot in an industrial estate with green fields around it you are always going to get rodents around. But this has gone to another level.
"In fairness to the company they have now tried to put measures in place recently."
But he said the working conditions, fears over the pension scheme and changing staff terms and conditions have become a source of real concern with union members.
"The basic perception of a majority of our members is that the Royal Mail Group only cares about its shareholders," he said.
"We keep seeing massive operational problems. Staff are certainly fed up - they don't feel valued."
The Royal Mail group has been contacted for comment.