Jerry Cowley (Mayo, Independent)
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I am grateful for the opportunity to raise this matter on the Adjournment, namely, the situation in An Post. The sins of An Post against its workers are gross. The Sustaining Progress agreement has not been honoured and that is unforgivable. A basic cost of living increase, which has been outstanding since 3 November 2003, is being denied to those workers. The workers received 5% this year but that payment was not back-dated. It is unacceptable that An Post workers are still owed the remainder of that money. The total amount is 12.5%.

The Minister has treated An Post workers very badly. They are public servants but they are not paid like other civil servants. The company claims it cannot afford to pay them. It wants changes in the collection and delivery service before it will pay, which is a separate issue. The company is denying just payment to post office workers and that is a cost of living issue.

An Post staff and pensioners are owed money by that semi-State company dating back to November 2003. The Communications Workers Union has exhausted all the procedures outlined in Sustaining Progress but has not been able to resolve the matter despite its best intentions. Some 90% of staff have voted in favour of industrial action, which is their democratic right and which is provided for under Sustaining Progress.

As a result of this vote, An Post staff have rejected the Labour Court recommendation. I hope for successful talks because unless that happens, there will be a strike, and nobody wants a strike, particularly the long-suffering public.

The management of An Post is the worst ever. It launched many serious and unsubstantiated allegations against the workers and argued that overtime working is required to maintain the service, yet it has increased the levels of overtime in the past two years and staff have been threatened with disciplinary action or accused of unofficial industrial action if they refuse to perform overtime. Those are low paid postal workers and it is not fair they should be expected or allowed to bear the burden of serious mismanagement and neglect by Government.

I have great sympathy for the postal workers. Rationalisation is the thin end of the wedge. The United States has decided on a policy of keeping its public service, yet we are running towards privatisation which is not in the interests of the people, particularly in rural Ireland. The public service obligation has worked well.

I know of a case of a man who sends a letter by post to his mother every day, which is delivered by the postman. This ensures his mother is being looked after. Such a service cannot be costed other than with reference to a social service. The country is all the richer for having postmen who know their locality and have a wonderful relationship with the people.

I hope the postal service will be retained but the postal staff must be respected. I hope the Minister of State will have some news to give the House tonight to show this situation is being taken seriously before regrettable action occurs.

Tommy Broughan (Dublin North East, Labour)
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The failure of An Post management to fulfil one of the key objectives it was mandated with, to successfully manage change and renewal at the company in the context of market deregulation and liberalisation, has been a hallmark of its performance in recent years. The management style has been by diktat rather than by facilitating a transformation in a climate of consultation, co-operation and harmony with the workforce. The results of the failure of An Post management are an indictment of the paucity of its style of management in recent years.

Industrial relations at the company are at an all time low; they are now at a poisonous level. Workers' deep concerns about the deterioration of the postal service have not been taken on board by management. Management has long implemented a ban on recruitment of new staff members, whether in a temporary or permanent capacity, and this has had a serious effect on the universal service obligation, as was the case in the summer. Many districts around the country have not been receiving their due post on a daily basis, rather there is a delay of ten or 15 days. An incredible situation has been allowed to develop. The Minister, Deputy Noel Dempsey, may think that people easily agree to go out on strike but I assure him that is not the case. Over 90% of a workforce voting 90% in favour of strike action illustrates serious disharmony at the company.

Postal workers and their families have been in contact with my office to alert me to the dire circumstances that often exist in families due to the current pay and conditions at An Post, and that is not including what is being withheld from staff.

Since November 2003, An Post workers and pensioners have been denied the 8% cost of living increase to which they were entitled under Sustaining Progress partnership agreement, which all Members of this House received. Postal employees have been extremely tolerant in enduring this wage freeze for so long when all other groups covered by the Sustaining Progress agreement have received their increases.

An Post made a €7 million profit last year on the basis of a number of years of serious decline. It has built up a considerable war chest from the sale of a number of overseas companies. As the Irish Congress of Trade Unions conference held in Belfast was told, the burden of resolving the difficulties at An Post cannot be exclusively borne by An Post staff, but that seems to have been the case. The staff have been denied their Sustaining Progress increases while at the same time the management received significant bonus payments such as the €12,000 Christmas pay-out last year and the €50,000 received by the part-time chairperson, Ms Margaret McGinley.

If greater efficiencies, productivity and cost-cutting measures are being demanded of the workforce, why is the same not being expected of management, given that it has managed the company so badly?

One of the most outrageous aspects of this whole saga has been that An Post pensioners have been left for so long without receiving their agreed increases. I was informed today that 78 An Post pensioners have passed away in the interim period without ever receiving the increases they were guaranteed under Sustaining Progress. That is an astonishing figure and it a shocking indictment of the way industrial relations have deteriorated at the company.

The Minister has been extensively quoted in the media during the last week and at the Fianna Fáil ard fheis as rubbishing the concerns of postal workers and implying that they are a highly paid and over-indulged group of employees in this State, but the opposite is the case. He referred to a postman who is working for just three and a half hours a day yet being paid for seven and a half hours. The Minister has, as yet, been unable to produce any evidence that this postman, with a seemingly Stakhanovite productivity rate, actually exists.

At such a critical juncture in this dispute it would be outrageous if it were to emerge that the Minister has been acting as a mouthpiece for An Post management, with not a shred of evidence to back up his claim. We have subsequently heard from An Post workers that the new delivery arrangements will result in a significant deterioration in the service to the public. For example, no weekend collections would take place and none would be scheduled after 6 p.m.

For all these reasons postal workers are, correctly, concerned about the effect of current collection and delivery proposals on take home pay and conditions. Given that the universal postal service has been on the verge of collapse under the current management in what is classically a people business, it is clear management has signally failed to manage the company or the change and transformation processes which, as we are all aware, are necessary in this era of deregulation and electronic substitution.

The Minister must give a lead and try to ensure the looming action, which is set to take place at midnight on Thursday, does not take place. I urge the Minister of State to indicate to the House the way forward and how the matter can be resolved.

Bernard Durkan (Kildare North, Fine Gael)
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Sadly, it is almost a year since Deputies discussed the issue of An Post in the House and on Molesworth Street. At that time, everybody agreed that the sad state of industrial relations was of deep concern to An Post workers. The increments to which my colleague, Deputy Broughan, referred were not paid on time during a period when, according to the economic experts on the Government side, the country was awash with money. For some unknown reason, An Post was able to plead inability to pay as a result of which its workers were not paid their entitlements. Worse still, An Post pensioners were given a commitment in legislation passed in 1982 that, notwithstanding the changes being introduced, they would continue to be treated as civil servants, only to find that once the company became a commercial entity, it decided it could not afford to pay them their entitlements.

The Minister's recent intervention, when he suggested he might bring forward competition legislation to speed up privatisation, was not helpful. He should have taken a more positive approach and used his influence, as I hope he is now doing, to bring about a resolution of the underlying issues which have caused the current problems in the company.

Everybody wants and is entitled to a good postal service and people should be able to expect one day delivery in the modern world. There is, however, no point blaming post office workers when this expectation is not realised. Instead, we should ask why An Post workers are discontent. Until the reasons as set out by Deputy Broughan are addressed, the Minister has no right to accuse workers at the company of sabotage or anything else.

The workforce of An Post, from postmen to postmasters, agree that improvements and modernisation are required and that the public must be given a good service. The problem is that nothing is being done to encourage them to take this route and, instead, they are being threatened that increments will be withheld, pension entitlements will not be paid and the company will be privatised if they do not knuckle under.

Is the current fixation with privatisation the answer to everything? While it appears to resolve some problems, any consideration of the privatisation of Telecom Éireann — the classic case of Eircom — raises the question as to whether consumers benefited. Does Eircom deliver better service? Are we better served now in terms of the international league on the provision of modern telephonic services? The answer to both questions is "No".

Would it not be better to modernise An Post and ensure the company has a future by providing a space for it in the modern Ireland? Instead of depriving workers of that to which they have been entitled for the past ten or 15 years, we should recognise the company's pensioners. As Deputy Broughan noted, it is a sad reflection on society that at a time when the country is allegedly awash with money, much of which has been lost and frequently not found, we refuse to recognise the existence of An Post pensioners, many of whom have passed on, by giving them what is theirs by right.

I realise the sensitivity of the negotiations and discussions taking place. As I noted, this is not a time for the Minister to use threats but one for compromise and negotiation. Ultimately, however, we must recognise that if we do not utilise the assets of the postal network, that is, its post offices, sub-post offices and the company's workers, in a manner which delivers an improved, more extensive and efficient service, the current negotiations will go nowhere.

Pat Gallagher (Donegal South West, Fianna Fail)
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I apologise to Deputies Broughan, Cowley and Durkan and other Members present on behalf of the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, who is unable to come before the House. I thank the Deputies for raising these important issues and giving me an opportunity to respond on behalf of the Minister.

The Government recognises the invaluable contribution made by An Post and its staff down through the years in terms of their input to the overall business climate and the role played by rural post offices and postmen in maintaining the social fabric of rural society. The strong contribution by An Post was possible in the context of a slow moving operational environment. However, the company has not been immune to the seismic changes in the communications sector. The move to e-mail and electronic fund transfers has impacted on postal volumes and post office users. To be relevant in the new environment, therefore, the company must modernise.

The basic building block for any company is financial stability and An Post has not yet met this basic requirement. As the Minister stated previously in the House, the company has suffered significant losses in recent years, starting with €6.7 million in 2001, rising to €17.4 million in 2002 before reaching an unsustainable level of €42.9 million in 2003. Between 2001 and 2002, payroll costs alone increased by €50 million. This financial performance, if allowed to continue unchecked, would have bankrupted the company.

An Post needs to introduce modern work practices if it is to thrive in a competitive environment. The company will face more rather than less competition in coming years and it needs to be geared to address this challenge. Large international companies such as Royal Mail and the German post office are already operating in the Irish market. If An Post cannot meet consumer needs and deliver a high quality of service, these companies will be more than happy to ramp up their operations here to fill the gap.

Bernard Durkan (Kildare North, Fine Gael)
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They will not ramp them up.

Pat Gallagher (Donegal South West, Fianna Fail)
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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.