Noel Dempsey (Meath, Fianna Fail)

I propose to take Questions Nos. 86 and 88 together.

The current dispute in An Post is a serious national issue and one in which every effort is being made to reach a timely and viable resolution. It would be helpful if I outline the background to the current industrial relations problems at An Post.

I emphasise that An Post has been through a protracted process that began in 2003 following the disclosure of serious losses by the company. On foot of these, which amounted to €43 million alone in 2003, the Government asked the board and management of the company to prepare a recovery strategy to return An Post to financial solvency. 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.

Following industrial action in the Dublin mail centre in March 2004, the Labour Relations Commission was asked to become involved in resolving the industrial relations difficulties. The two parties spent from April 2004 to November 2004 in the LRC. The proposals arising out of the LRC were put to the CWU 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 Communications Workers Union. 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. After a vote for industrial action, the union gave two weeks' strike notice to the company, ending on Friday, 4 November.

At no stage have I apportioned blame to one side over the other. I have stated the facts as they are and the history in An Post over the last ten years has not been great. The industrial climate in the company has been characterised by agreement to and payment for industrial relations agreements but little actual delivery on the ground. Payment up front means that the company pays for change but subsequently only gets partial benefits and thus worsens an already fragile financial position.

Both the Taoiseach and I have emphasised to both the management and unions of An Post that the only way forward is for both parties to agree a deal within the parameters of the Labour Court recommendations. While I have recently met both management and the CWU in an attempt to overcome the impasse, I requested the national implementation body, NIB, to invite both parties to sit down separately with a view to resolving the dispute. The talks began on 2 November, with a breakthrough occurring late on Sunday, 6 November.

I understand that, at an emergency meeting of the CWU's disputes committee, held on 7 November, it was agreed to defer strike action for a week pending an independent assessment of the costs of changes in work practices that is to be carried out by external accountants. The NIB met the management side yesterday and the CWU and has indicated that the process initiated in conjunction with the accountants would be finalised today. The NIB proposes to meet the parties this evening and has requested that they refrain from comment and treat the accountant's report as confidential for a period of 24 hours after it is presented.

A recent and very positive development in the resolution of the company's difficulties concerns a separate claim submitted by the other unions in An Post, the AHCPS, the PSEU and the CPSU. On 1 November, the Labour Court issued three new recommendations, advising that members of these unions are to receive the Sustaining Progress increases as set out in the Labour Court's July recommendation. The court found that these unions' members had either implemented work practice changes required of them or had committed to doing so. The recommendations were accepted by the company which stated that workers and pensioners concerned would receive these increases shortly.

There will continue to be a key national role for An Post, both in delivery of mail and as a quality service provider through its nationwide network of post office outlets. The market for traditional postal and post office services is changing globally and meeting customer needs has become more important than ever. To remain competitive, An Post needs to make the best possible use of its long-established and trusted brand name and deploy its resources in a manner which continues to serve existing customers' needs and attracts additional customers for a range of new services.

The simple fact remains that the company needs to introduce modern work practices if it is to thrive in a competitive environment. I want to see An Post continuing to deliver a high quality postal service to the people. To enable the company to provide this service, the archaic work practices that the workers themselves have acknowledged are archaic need to be changed.

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