Industrial relations in the postal sector —Italy
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The postal sector in Italy has been changing over the last 15 years. It has changed from a monopolised to a liberalized system. This changes have influenced many occupational and organisational aspects, not to mention the industrial relations in the sector.
Background
The objective of this comparative study is to investigate the structure and main features of industrial relations in the postal sector in Europe, with a particular emphasis on the challenges faced by social partners in front of the liberalisation and privatisation processes affecting core postal activities.
The postal sector– together with energy and telecommunications – is one of those sectors providing services of general interest (SGI) of an economic nature. In the European Union post offices have always been noted for providing crucial service to the more isolated districts and more disadvantaged people in society. Until recently, in all member States, with few exceptions, the service used to be provided by a single public sector operator, which enjoyed a monopoly over the crucial postal activities, thus assuring a universal service (EU9812136F).
Over the last two decades, however, the organisation and delivery of postal services have undergone considerable change, as a result of both new consumer demands and the restrictions imposed on public expenditure by a new economic and political environment. Change, which was largely facilitated by technological innovation, led first to a certain degree of liberalisation in relation to some aspects of the delivery of postal services. Thus an increasing number of private providers were able to emerge and secure a significant share of the high value-added services market not covered by the post office monopoly. At the same time, post offices expanded considerably the range of their activities, which currently may include financial, insurance as well as other services along with the more traditional postal ones. At present the postal sector is characterised by a varying presence of both public and private operators, providing a broad range of services and products.
Since the late 90s, after the enactment of the December 1997 EU Directive on postal services, an extensive process of corporate restructuring – and sometimes of privatisation – was initiated by the national postal companies. It aimed at removing barriers to change and better achieving the goals of increased efficiency, augmented productivity and cost containment necessary to survive and consolidate in a more competitive environment. To be noted is that the European Directive, in view of the crucial social functions performed traditionally by post offices, required all Member States to guarantee a universal postal service covering at least the collection, classification, transport and distribution of postal items of up to two kilos and parcels of up to 10 kilos, as well as registered mail and insured-value mail. However, it allowed Member States to reserve specific parts of domestic, urgent or ordinary correspondence, as well as other mail services, for commercial operators if considered necessary for the efficient operation of the service. In other terms, it called for the substantial retention of a strong universal postal service, within the context of liberalisation.
Changes which occurred included the structural reorganisation and legal transformation of previously state-owned postal companies; the closure of unprofitable branches and transfer of their activities to subcontractors; the reduction in the number of post offices, sometimes replaced by post counters situated in local businesses already providing some other service; a massive process of application of new technologies to post offices and sorting centres. The impact – both quantitative and qualitative – on employment was substantial, with a considerable number of jobs lost, and considerable changes in terms and conditions of employment.
Significantly, in response to the new challenges, the EU-level social partners in postal services signed in October 1998 a framework agreement on the promotion of employment in the sector, aiming to improve working conditions, enhance consultative arrangements and ensure that employees are able to adapt to technological developments (EU9812136F). More recently, in November 2005, the Universal Postal Union – a United Nations specialised agency acting as a forum for cooperation between postal services – and Union Network International – a global union with 2.5 million members employed in the postal sector – signed a cooperation agreement aimed at promoting social dialogue between the two organisations (EU0512202N). More specifically, they made a commitment to establish joint actions that focus on the employment impact of developments in the postal sector, with particular attention to health and safety of workers and the improvement and development of the skills of postal workers.
On the other hand, new concern arose among most trade unions representing postal workers in Europe when a draft Directive– known as the ‘Bolkestein Directive’ after the name of the Internal Market Commissioner who submitted the proposal – was proposed in 2004. The draft directive, which covers also services of general interest if they are of an economic nature, as is the case of postal services, aimed at removing legal and administrative barriers to the development of a free market for services in the EU; but it met with strong opposition by the majority of the trade unions fearing that it would lead to social dumping (EU0407206F).
One may conclude that developments in the postal services sector reveal a mixed picture in rapid evolution, characterised by a search for cooperation and social dialogue between the social partners and by the enhancement of competition between the service providers.
The study
This study aims to gather information on industrial relations in the postal sector in the EU, acceding and candidate countries and Norway, paying particular attention to the impact of liberalisation and restructuring processes on employment, terms and conditions and the relationships between the social partners over the past decade.
Currently the postal sector is characterised by a varied presence of both public and private operators, providing a broad range of services and products. After a brief overview of the main features of the sector in its broadest sense, the study will focus on the developments regarding the mail services sector. In particular it will gather:
- information on the present structure of the mail service sector;
- data on industrial relations in the mail service sector.
1. The postal sector in general: basic data and trends
Keeping in mind the postal sector in its more general and inclusive definition (that is including any kind of services provided by postal operators, such as financial or insurance services), please indicate:
a) Current structure and services in the sector
1. The current structure of the sector in its broader definition: which is the range of services provided by postal operators? Has some kind of functional specialisation between providers been introduced?
The Italian Postal Service Sector has been a state controlled concern since the unification of Italy. In the early 90s, a process of liberalization was initiated, in which the only operator, called Poste Italiane, in the sector was slowly transformed. These changes included a reorganisation of the economic structure, a rebalancing of the accounts and the re-launch of services. So on January 1,1994, Poste Italiane became a Public Economic Body and on February 28, 1996, it became a completely public-owned joint-stock company.
By 2009 the entire sector will have been liberalised.
Currently, the Poste Italiane Group is the principal operator in the sector (there is no data available concerning the precise market share, but this is certainly nearly 100%) and since its transformation into a Joint-Stock Company, it has started to obtain and found a number of societies which are specialised in various activities.
The Group contains 13,881 post offices (data refers to 2005), 200 sorting offices for packages and correspondence, 46,000 postmen, 17 daily air connections and more than 40,000 vehicles.
The principal services provided by the Group include the following:
Postal services: Correspondence (standard, 1st class, registered and insured mail, legal communications and other registered post), Commercial mail (catalogues, non-addressed mail, etc.), periodicals (prints, gadgets, books, etc.), electronic communication (telegrams, faxes, telexes), express carriers, packages.
Savings Services: Savings accounts, interest-bearing bonds, postal bank accounts, life insurance.
2. The number and characteristics of companies operating in the sector at large, distinguishing them according to their size, legal and property status (state-owned/ public limited/ private companies, etc.), the kind of services provided, their market share.
The operators in the sector are:
The Italian Postal Service Group, which include:
Postel Spa (Postel Joint-Stock Company)
Postel is a Joint-Stock Company which operates in the sector of HYBRID COMMUNICATION services. This term refers to the services required by companies that want to give complete control of their correspondence to an external body. Therefore, Postel operates in the outsourcing market. Its principal occupation concerns the management of payments.
SDA Express Courier S.p.A.
Founded in 1984 as an Express courier specialised in national and international deliveries, SDA has been part of the Italian Postal Service Group since 1998. In June 2003 then became part of SDA Mototaxi involved in urban motor-delivery services, and Eboost which offers remote sales services. The other company included in the Group is called SDA logistica which offers logistic services. SDA Express Courier is involved in deliveries through couriers and is the first express courier company in Italy to have received certification for remote sales services. These are called Eboost services.
Postecom S.p.A.
This is a company controlled by The Italian Postal Service Group which is involved in planning, development and management of Internet, Intranet and Digital Certification services.
Postecom was founded in October 1999 to develop and manage new services which are accessible via internet the Italian Postal service site. Since 2001 it has acted as a developer and integrator of messaging services, payment online, management of documentation, e-procurement, e-commerce and e-learning.
Poste Vita S.p.A.
An Insurance company of The Italian Postal Service Group. The company operates through the 11,700 post offices of the Italian Post. The company controls 100% of Poste Assicura SpA qhich is an agengy set up to widen the range of products to offer clients.
BancoPosta Fondi S.p.A.
This was founded in 1999 and is registered as an Asset Management company with The Bank of Italy. It manages harmonised open-ended investment funds according to the European Union and is responsible for relations with investors.
PosteShop S.p.A.
This is a society which merchandises products of The Italian Postal Service together the products of external suppliers. This is carried out through various channels including the “Shop in Shop” sales areas in the principal post offices, counter sales (direct or mail order), and the “Self Service” which involves the free selection of products by the customer and payment at the counter.
Europa Gestione Immobiliari S.p.A.
The Company operates in the real estate sector in order to manage and develop property no longer used in operations and transferred from the Parent Company in 2001.In line with the type of assets owned, the service is mainly offered to large users, often from the public sector.
Poste Tutela S.p.A.
Poste Tutela S.p.A, a wholly owned subsidiary of Poste Italiane, is responsible for developing, managing and consolidating integrated safety and security systems for the Poste Italiane Group. Poste Tutela supplies the organisational, coordination and management services pertaining to the movement of cash and valuables in all branches and Post Offices in Italy.
Mistral Air s.r.l.
Mistral Air, an air transport company, has over the years provided public passenger and freight transport services, and has recently extended its activities to include mail transport. Its fleet of aircraft, based at Ciampino Airport (Rome), provides cargo services primarily for Poste Italiane S.p.A. and TNT.Mistral Air offers specialist "All Cargo" services on a scheduled basis, and is also able to rapidly organise charter flights on request.
The other operators in the sector are:
GRUPPO TPG (Dutch Postal Sector). This group also operates on the international and Italian markets in correspondence, express courier services, logistics and packages. It is composed of TNT Global Express, TNT Production together with a series of private agencies which have been purchased in recent years. These include Milano Recapiti, Pony Express, Gruppo Rinaldi, Technologistica, Moto Mail, Go Express, Bbr, Genova Sprint, Fiorenzia.
GRUPPO DPWN (German Postal Sector). This is a mixed group which operates on the international and Italian in correspondence, express courier services, logistics and packages. The group includes Danzas Italia, Danzas Logistica, DHL Italia, MIT corriere espresso,logistica, pacchi.
FEDEX (The United States) Express courier.
MBE (Mail Boxes Etc) (British Postal Sector) This is a mixed group which has a network of shops in franchising that offer integrated postal, financial and communication and support services to enterprises ( correspondence, fax, express courier services, packaging services, photocopies, translation services, sale of office products, worldwide money transfer).
Unipost (Private Italian Mixed Group).This is a new postal service group which was recently launched in preparation for the liberalization of the service (not yet ongoing).
b) Trends and developments in the sector since 1980s
3. If and when there have been legislative reforms affecting the traditional postal services sector since the 1980s and the main impact of these changes.
Poste Italiane was a publicly administered (state-run) organisation from the unification of Italy in the mid-19th century until the end of 1993 when it became a public financial body and then (28 Feb 1996) an S.p.A. (joint-stock company). The main consequence of these changes has been a much improved financial situation. A debit balance of 4,400 billion lire has been turned round to give a credit balance in the last three years. This year a dividend has been awarded to shareholders.
A further consequence has been a gradual reduction in the number of employees, from 200,000 when it was a public body to around 146,000-147,000 today.
4. If and when the sector has been involved in liberalisation processes putting an end to monopoly positions since the 1980s and the main impact of these processes.
The sector has been affected by and has reacted to the various European provisions on liberalisation. The reserve, which has been kept in check by tariffs and by continued reductions in weights, has been steadily reduced (latest provisions endorsed 97/67/CE, 2002/39/CE of 10 June 2002).
At first liberalisation led to Poste Italiane losing market share but now, through company acquisitions, this loss has been reversed. Currently the market is almost entirely in the hands of the Poste Italiane group.
5. The evolution of employment in the sector, globally and according to the main relevant subdivisions in which the sector is articulated, since the mid-90s and the expected future prospects.
When Poste Italiane was state-run it had over 200,000 employees. Since then the situation has changed as follows:
| 2000 | 163,420 |
| 2001 | 152,601 |
| 2002 | 149,969 |
| 2003 | 148,850 |
| 2004 | 146,590 |
| Today | 147,000 approx. |
6. Any relevant other change affecting the industrial relations in the sector.
The changes in industrial relations have been significant. When Poste Italiane was state-run, the system was one of joint-management, giving the unions an inappropriate role within the company management structure. Now industrial relations are completely aligned with the functions determined for each side by national collective work contracts. These stipulate four types of involvement: contractual negotiation, participation, consultation and information.
2. The mail services sector: structure and change
Focusing now on the core business of the postal sector (that is on the activities related to the collection, classification, transport and distribution of postal items, NACE 64.1, rev. 1.1 2002), NCs should provide a brief account of the present situation of the sector and of any recent changes which have affected it. In particular, please illustrate:
1. If and when the sector has been involved in privatisation processes or in the contractualisation of employment relationships (that is the shift from public law employment contracts to private law employment contracts and collective bargaining coverage) since the 1980s and the main impact of these processes.
The greatest effect on the Poste Italiane group has come from its change into a S.p.A. The development of industrial relations in the company has centred on contractual negotiation. This has led to the abolition of all the mechanisms deriving from a state-run, privilege-based system, and the instigation of workplace rules as applied to private-sector workers.
The main result has been the loss of the greater protection that state-sector workers enjoy but, again through contractual negotiation, this has been counter-balanced by the company according greater value to its workers and career development now depending on acquired skills rather than patronage.
2. If and when the sector has been involved in restructuring processes (offices closures, automation, reorganisation of production, outsourcing and contracting out, etc.) since the 1980s and the main consequences of these processes on employment (redundancies, recourse to different kind of contracts, etc.) and on work organisation (changes in the skills levels required, training; recourse to functional flexibility, longer operating hours, shift work, etc.).
More changes involving the postal sector are underway, restructuring continues, and complete liberalisation is planned for 2009. Ongoing restructuring has had a considerable effect on staffing levels, on working methods within the company and on its organisational set-up.
The effect on employee numbers has been wide-ranging: the first stage was to reduce the workforce; then came more incisive changes, increasing productivity, both that of workers and organisationally, and optimising workforce utilisation.
The organisational structure moved from one typical of the state sector to a divisional system with each division being set objectives and budgets, and being given direct responsibility for their output.
The unions headed off the company’s assault on working hours and prevented them from rising to unsustainable levels. But, vitally, the focus was not simply on rationalising working hours, which were not totally unreasonable, but on the full range of internal support systems which were superfluous and needed to be removed.
3. The current structure of the mail services sector: the number and characteristics of companies operating in the sector, distinguishing them according to their size, legal and property status (state-owned/ public limited/ private companies, etc.), the kind of services provided, their market share.
There have always been small companies working in the deliveries sector, mainly restricted to small catchment areas, most notably the large cities. With the arrival of TPG on the market and the transformation of Poste Italiane into a S.p.A., these smaller companies have formed into two large groups, one gravitating around Poste Italiane, the other gravitating around TPG.
It should be remembered that TPG also concentrates on specific types of delivery services, registered post, for instance.
Detailed data is not available.
4. The sectoral employment levels and developments (possibly broken down by gender, education and skill level) since the mid-90s.
Despite employee numbers decreasing at Poste Italiane they have increased in the sector as a whole. This is due to the increased incidence of private companies on the market, which have taken a large share from Poste Italiane, and also because the entire market is growing.
Some data regarding Poste Italiane follow.
At the end of 2006 the deliveries sector of Poste Italiane S.p.A. accounted for 47,000 Full Time Equivalents.
The mid-term (end 2009) expectation for CAGR is -1% to -3%, taking into account the implementation of the “Recapito” project.
The male/female percentage split is currently 59/41; it is expected that the female presence will rise by at least two percentage points in the mid term (end 2009).
The educational breakdown is: 3% graduates, 50% with high school education or professional training, 43% early school-leavers and 4% with only elementary schooling; an increase of 5-8% in the former two groups is expected in the mid term (end 2009) with a corresponding decrease in the latter two.
5. The legal status of employees.
Work contracts are of the private type and are governed by collective bargaining agreements.
6. The sectoral pay levels and developments compared to national averages, inflation and productivity growth (distinguishing between public and private operators) since the mid-90s.
Taking national averages, in the last decade salaries have increased in line with inflation and in accordance with the provisions of the ’93 protocol. The increase in productivity, however, has been enormous, nudging 400% in the last few years.
The increases in financial resources have been mainly employed, by means of non-inflationary mechanisms and solutions, to improve productivity and to reward improved performance, thereby developing a virtuous circle.
7. The presence of any regulatory authorities or agencies with a brief explanation of their entitlements (price setting, issue of licenses, etc.).
The function of regulatory authority in the postal sector is carried out by the Ministry of Communications.
It is foreseen that an independent authority will take on the regulatory role prior to privatisation.
8. The involvement of the social partners in the sectoral regulatory framework (social partners’ representatives sitting in observatories, committees which oversee the management and developments of public utilities, etc).
There are as yet no Observers or Commissions despite union demands. The trades unions have a presence on the sector joint national analysis and study body.
9. Any other feature important to seize the peculiarities and the main problems to be solved in the sector.
Problems in the sector requiring resolution:
- precise rules are required on behavioural limits within the market;
- a contract is needed to regulate social dumping attempts, which reply on the extremely low employment costs in the sector.
Liberalisation has taken place without rules. The problem is regulation.
3. Industrial relations in the mail service sector
Continuing to concentrate on the core businesses of the postal sector (NACE 64.1, rev. 1.1 2002), NCs should provide an overview of industrial relations in the mail service sector. In particular, please indicate:
1. Possible limitations or peculiarities with respect to the right to association, collective bargaining and strike.
There are no restrictions on union membership and union freedoms in Poste Italiane.
2. The structure of trade union representation: number and characteristics of the unions which operate in the sector, union density. In particular: is union representation fragmented? Are there rivalries between the trade unions? Are there differences between public and private operators?
As well as the four main confederations (CGIL, CISL, UIL and UGL) there are also independent union organisations and movements such as CUB and COBAS active in the sector. Internally there is a very powerful dynamic.
Representation is decidedly fragmentary even though the three confederations tend to be in unison on policies. The rivalry that exists is mainly on the organisational side. Since ideas on policy, including those of the independent unions, have followed along similar lines, there has been a strongly convergent approach. There is no difference in this respect between Poste Italiane, as a public organisation, and the private concerns.
Where there is a difference is in the level of unionisation. At Poste Italiane this is very high, embracing 70%-80% of the workforce, whereas it is much lower in the private companies. This is in part due to the smaller size of these businesses and their resultant higher staff turnover, which works against a union presence becoming stably rooted.
3. The structure of employer representation: are there sectoral employer/trade associations? What is the number of companies affiliated to these associations, and the number of employees of the affiliated companies? Has there been any major reorganisation of employers’ associations as a consequence of the changes affecting the sector?
Employers may belong to FISE (Federazione delle imprese di servizi – the Federation of Service Enterprises) or CNA (Confederazione Nazionale dell’artigianato – the National Craftworkers Confederation). FISE embraces seven affiliates, including ARE (the Express Deliveries Agency). This groups most of the agencies offering express delivery services, representing 70% of the workforce in this area (which totals 1,800). The remaining delivery agencies are grouped into a consortium which is a member of the CNA. This enables them to apply the contractual terms relating to craftworkers and therefore offer lower salaries.
FISE is part of Confindustria, the Italian employers’ federation.
4. The structure of collective bargaining: at what level are collective agreements concluded? National/sectoral? Decentralised? Both, with different scope? Other? Are there differences between public and private operators?
There is no single collective contract in the sector. There are instead a number of different contracts, one regulating all the companies in the Poste Italiane group, one regulating the express delivery agencies and one (the craftworkers’ contract), regulating all the companies and agencies belonging to the CNA.
The unions are seeking a generalised sector contract which will lay down fixed points on which company contracts must be based.
In Poste Italiane, as in the other companies where the group’s contract applies, contractual negotiation takes place at two levels, national and decentralised.
At national level negotiation centres around the renewal of the national collective work contract; company productivity and profitability, and consequent bonuses; new regimes on working hours; and company restructuring.
Decentralised negotiation handles productivity quotas tied to specific projects, absences and service quality, as well as modifications to working hours and local effects from company restructuring.
5. The coverage of collective bargaining in terms of companies and employees. Are there non-union companies or cases of opting out from employers’ association and multi-employer bargaining? Other? Are there differences between public and private operators?
Collective contractual negotiation covers almost the entire sector. There are, though, concerns which are not members of any employers’ organisation. These are small-scale businesses, known as “owner-driver” concerns, where the owner has his own VAT number, works independently and invoices companies directly.
6. Issues dealt with in collective bargaining: working time, training and career developments, equal opportunities, performance-related pay, conciliation between work and personal life, others. Are there differences between public and private operators.
See reply to point 4.
7. The impact of outsourcing/contracting out on collective bargaining coverage and working conditions.
Outsourcing moves productive activity from an area better ring-fenced by unionism (Poste Italiane) to one where unionism is much weaker (private delivery agencies) and therefore less able to intervene in support of workers’ rights.
8. The recourse to industrial conflict: data on number of strikes, worker participation and day lost over the last decade. Has recourse to conflict intensified as a consequence of the changes affecting the sector? Are there conflict resolution practices specific to the sector or to individual companies? Are there differences between public and private operators?
Before the signing of recent specific agreements, disputes in the deliveries sector were common, especially regarding the block on overtime, however this was called.
The contract details procedures for cooling-off periods and for conciliation in disputes at all levels.
The only form of remuneration linked to objectives is a productivity bonus.
There are differences between Poste Italiane and the private companies since different contractual terms apply; the unions are working towards having one single contract, to come into force as soon as liberalisation is complete, which will ensure that equal rules apply to everyone operating in the sector.
There are ongoing discussions with Poste Italiane on corporate social responsibility; these should lead to an agreement being signed.
9. The presence of participatory practices at workplace level, either through the involvement of employees’ representatives or trade unions, or the implementation of direct participation. Instances of financial participation (ESOP). Are there differences between public and private operators?
Currently no participation practices exist: there is no participation of any sort, be it organisational, financial or strategic. There is no difference between the public and private sectors.
This is a keenly felt problem. The unions are seeking participation in workplace organisation and increases in productivity. There is no form of financial participation unless one counts productivity bonuses which are, though, founded solely on objectives.
10. Any instances of social dialogue at sectoral level, like the conclusion of agreements or the presence of tri- bipartite bodies concerned with employment and labour relations issues.
There has been only one episode of tripartite accord during the various stages of transformation of the legal standing of the company. This related solely to policy agreements and did not involve salaries, employment or anything else.
Social dialogue is currently carried out only at company level.
11. The membership of national actors in European-level cross-industry and sectoral organisations.
All three union confederations belong to European and international postal sector organisations.