Tommy Broughan (Dublin North East, Labour)
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Question 227: To ask the Minister for Communications, Marine and Natural Resources if he will report on the current industrial relations situation at An Post; the prospects of An Post pensioners receiving their full entitlements under Sustaining Progress; and if he will make a statement on the matter. [28330/05]

Noel Dempsey (Meath, Fianna Fail)
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I am aware of the situation that has arisen in relation to industrial relations issues at An Post and in particular to the non-payment of Sustaining Progress increases to the company's pensioners and employees. I point out, however, that I have no function in directing An Post in the matter of operational and commercial issues such as the application of national pay awards.

As a commercial company, the challenge ahead for An Post is to develop a strategy that satisfies the needs of existing customers, while attracting new customers. An Post has a remit to be financially viable and following significant losses, which amounted to €43 million in 2003 alone, An Post management invoked the "inability to pay" clause provided for in Sustaining Progress. Therefore, the key challenge for the company is to return to long-term financial stability. An agreement on a viable recovery plan is the only way forward for An Post to deliver quality services to our citizens, while at the same time providing sustainable well-paid employment for its staff.

Change is required if the postal services of An Post are to adapt to the modern business environment and to continue to offer a top class nationwide delivery service to the customer into the future. With this in mind, the board and management of An Post have presented a recovery plan, incorporating details of a proposed new collection and delivery service, which I believe is vital to the re-establishment of the company on a more secure financial footing. The plan sets out the way forward for the company. Adoption of the restructuring that, as envisaged by the plan, delivers real change is the only way An Post workers and pensioners can look forward to receiving pay increases in line with other sectors. I have continuously emphasised the need for all stakeholders in the company to work together in a partnership approach and to utilise the industrial relations mechanisms of the State, where necessary, in order to agree and implement the recovery strategy to return the company to financial stability and prepare for the challenges ahead.

In order to progress the change agenda, an exhaustive process of negotiation between An Post management and An Post trade unions, under the auspices of the Labour Relations Commission and then the Labour Court, was entered into, which has lasted almost two years. To progress the change agenda, An Post unions and management were involved in intensive negotiations with the assistance of the State's industrial relations machinery in a bid to agree a recovery plan that will put the company on a sound footing. This process has lasted almost two years.

The question of Sustaining Progress related payments to employees and pensioners was addressed in a Labour Relations Commission, LRC, brokered process. Assessors, appointed by the LRC, recommended that An Post was in a position to pay a 5% increase to its employees and pensioners. This increase, backdated to 1 January 2005, was paid to An Post employees and pensioners at the end of June 2005.

In order to meet union concerns, a three-person expert group was formed under the auspices of the Labour Court to devise a workable agreement on collection and delivery. The process at the Labour Court recently concluded with the court's recommendation that the company accept the proposals as set out by the three-person, court-appointed technical group's report on An Post's collection and delivery arrangements and that upon ratification by both parties of the draft agreement annexed to that recommendation, the company should arrange for payment of all 2005 and future increases due under Sustaining Progress to its employees and pensioners. The court further recommended that all retrospective payments relating to the recent 5% increase paid by An Post, be made to its employees and pensioners as soon as the company is returned to reasonable and sustainable profit and when commercial circumstances permit. I understand, however, that on 5 September 2005, the Labour Court's recommendations on the issues of Sustaining Progress and collection and delivery were rejected by the main union in An Post, the Communications Workers Union, with the result that the company is not in a position to make any further increases to its employees or pensioners.

I would like to take this opportunity to echo the Taoiseach's comments in the Chamber last week and restate that industrial action in An Post would only deepen the problems and put jobs and living standards of the company's employees and pensioners at risk and I, too, urge members of the CWU to consider very carefully the options before them. It is my understanding that, following a special delegate conference, the union has now decided to ballot its membership for industrial action up to and including strike action. The ballot will be concluded by Friday, 21 October.