Pat Gallagher (Donegal South West, Fianna Fail)

Time is not on the side of An Post and its workers. I will outline the lengthy background to current industrial relations at An Post and impress upon the Deputies that the current circumstances have not arisen overnight. An Post has been through one of the most intensive industrial relations processes imaginable. The process started when, following the disclosure of serious losses for 2003, the Government asked the board and management of the company to prepare a recovery strategy to return An Post to financial solvency. The plan involved changes in work practices and voluntary job losses. This strategy, in setting the way forward for the company, has assumed significant changes in work practices, tariff increases and the payment of wage increases.

The plan was presented to An Post trade unions in late 2003. The Communications Workers Union withdrew from negotiations in December 2003. In recognition of the dire financial position facing the company, An Post invoked the inability to pay clause available under Sustaining Progress. This was followed by industrial action in the Dublin Mail Centre in March 2004. The Labour Relations Commission brokered settlement proposals which involved negotiations on collection and delivery and, in the event of failure to reach agreement in the LRC, referral to the Labour Court. The LRC proposals stated that the outcome of any LRC or Labour Court negotiations should be put to the respective sides, including a ballot of members.

The two parties spent from April 2004 to November 2004 in the LRC. The proposals arising out of the LRC were put to the Communications Workers Union membership and turned down by the union. The outstanding issues were then referred to the Labour Court for resolution. On foot of union concerns that An Post management had no real experience of the postal sector, the Labour Court appointed a three-person expert group to come up with a workable proposal on collection and delivery that would be acceptable to members of the CWU. That group spent six months working on a comprehensive proposal regarding collection and delivery, which was published in July 2005.

In the early part of 2005, the An Post group of unions referred the non-payment of Sustaining Progress to the LRC, as provided for under the Sustaining Progress agreement. The LRC appointed assessors to examine the claim. The assessors' report recommended that, having regard to An Post financials, 5% should be paid to employees, backdated to 1 January this year. That recommendation was accepted by An Post management and rejected by the CWU.

The Labour Court issued a comprehensive recommendation which outlined that the acceptance of the deal on collection and delivery would trigger payment of the bulk of Sustaining Progress. The Labour Court deal would have allowed a postman to obtain a 9% pay increase this year on top of a 5% Sustaining Progress pay increase already made, giving a total increase of 14%.

The Labour Court recommendation was considered by the executive of the CWU but was not put to a ballot of members. Instead, the union decided to ballot for strike action on the non-payment of Sustaining Progress. The membership has voted for strike action and the union has given two weeks' strike notice, with action possibly to commence on 4 November. It is still not clear at this stage what type of action that will be.

On the other hand, a recent and very positive development in the payment of Sustaining Progress to An Post staff and pensioners occurred yesterday when An Post accepted the Labour Court recommendations on the claims by the other unions in An Post, the AHCPS, CPSU and PSEU, for payment of Sustaining Progress. The rejection by the CWU in September of the Labour Court recommendations issued to the An Post group of unions regarding the payment of Sustaining Progress effectively blocked payment to the AHCPS, CPSU and PSEU.

The three unions then decided to pursue separate claims for payment of Sustaining Progress on behalf of their members. The Labour Court decided yesterday that, as the members of both the AHCPS and CPSU have agreed and implemented change agreements, they are entitled to Sustaining Progress as set out in the Labour Court recommendation issued last July. The PSEU has agreed in advance to accept an imminent Labour Court decision on a programme of change for its members. The Labour Court, having examined those issues, recommended that PSEU members receive the same Sustaining Progress payments as the other two unions on acceptance of its decision by both parties.

Following acceptance by the three unions of the Labour Court recommendation, I understand that arrangements are being made by the company to proceed with the outstanding payments as soon as possible. I am particularly pleased that the increases will also be paid to all pensioners who retired from positions represented by the three unions as it is an unfortunate side effect of the dispute that payments to pensioners have also been affected.

The recent Labour Court decision clearly shows that, where unions agree and implement change agreements, outstanding payments will be made. It is a reality that change is imperative in An Post as almost 70% of costs are payroll related. To provide Deputies with an example, every 1% increase in the payroll costs the company €5 million, and the cost of Sustaining Progress alone this year is estimated at €38 million. To enable the company to pay the large wage bill, the cost-saving measures outlined in the recovery strategy must be implemented.

The Labour Court would not have tied payment of Sustaining Progress to a deal on collection and delivery if it had not recognised the imperative to begin restructuring now. There is no doubt that the decision by the CWU to take industrial action will have an impact on both personal and business customers. An Post is preparing contingency and communications plans to deal with the forthcoming industrial action which will address, in particular, the needs of social welfare recipients and provide information to customers regarding postal services.

No interest is advanced by a descent into industrial relations chaos in An Post. Unlike with the postal strike 25 years ago, alternatives to the postal service now exist. Customers who leave An Post may not return, a fact which everyone should bear in mind. As the Taoiseach and the Minister, Deputy Dempsey, have both outlined, the blueprint for the settlement of this dispute is the Labour Court recommendation. That is necessary to bring about the essential modernisation of the company, which is the best way of securing long-term sustainable jobs for An Post workers and ensuring the continuation of a high quality nationwide postal delivery and post office service. The earlier that the CWU recognises that, the better for the public, social welfare clients and its own membership.

With that in mind, both parties accepted an invitation to meet the national implementation body separately for talks aimed at resolving the dispute and averting strike action. Those talks took place this afternoon and the outcome should be known shortly. However, it is hoped that both parties availed of this opportunity to resolve their difficulties and agree a road map for the implementation of the recommendations of the Labour Court. It is important that all players realise that globalisation, liberalisation and developments in technology are changing the way that people communicate. All national postal operators, including An Post, must change very rapidly to stay competitive and commercial in the European postal market.

In light of the recent announcement by the CWU that it had rejected the Labour Court recommendation on collection and delivery and that it had balloted its members on taking industrial action which may lead to a serious disruption to postal services, the Minister announced that he was considering all options open to him, up to and including early liberalisation of the sector, to limit the disruption caused to the sector and the economy at large as a result of any prolonged period of industrial action.

The unresolved difficulties in An Post cannot remain unresolved into the future. The momentum for liberalisation already exists and if An Post does not start to restructure, it will not be in a position to meet the competitive challenges of a fully liberalised postal market. For that reason, I urge all parties to reconsider the terms of the Labour Court settlement as time is not on the side of An Post.

See this speech in context