Simon Coveney (Cork South Central, Fine Gael)
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Question 175: To ask the Minister for Communications, Marine and Natural Resources if his attention has been drawn to the non-payment of cost of living pay increases promised to An Post staff; his views on the likely consequences; and if he will make a statement on the matter. [28050/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 256: To ask the Minister for Communications, Marine and Natural Resources if his attention has been drawn to the non-payment of cost of living pay increases promised to An Post staff; his views on the likely consequences; and if he will make a statement on the matter. [28129/05]

Noel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 175 and 256 together.

An Post is a commercial State body and the question of pay increases in the company is one in which I have no function. 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.

I believe that 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. Therefore, the key challenge for the company is to return to long-term financial stability. In this regard, 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. The question of Sustaining Progress related payments 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. This increase, backdated to 1 January 2005, was paid to An Post employees and pensioners at the end of June 2005. I also understand that the assessors' report finds that An Post cannot afford any further elements of Sustaining Progress or the mid-term review of Sustaining Progress other than in the context of securing finalisation on rationalisation and restructuring requirements.

It is my understanding, however, that the An Post unions rejected the assessors' report in its entirety. The matter was then referred to the Labour Court which issued its recommendation on 13 July 2005. The court recommended that on acceptance of the recommendation made in a recent court appointed technical group's report on An Post's collection and delivery service and 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. The court further recommended that all retrospective payments relating to the recent 5% increase paid by An Post be made 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. 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.