Union opposes privatisation of postal services

In January 2006, the Austrian government agreed to sell off 49% of the state’s shares in the Austrian Post Company by summer 2006. These privatisation plans have met with harsh criticism from the Union of Post and Telecommunications Employees (GPF) and the parliamentary opposition. They argue that the company is not ready for privatisation and fear further large-scale staff cuts as well as a dilution of postal services across the country. However, protest actions organised by GPF appear unlikely to delay the privatisation process.

On 12 January 2006, the coalition government of the conservative People’s Party (Österreichische Volkspartei, ÖVP) and the populist Alliance for the Future of Austria (Bündnis Zukunft Österreich, BZÖ) agreed on the partial privatisation of the Austrian Post Company (Österreichische Post AG). The cabinet empowered the state public holding company (Österreichische Industrieholding AG, ÖIAG) to sell off (ie privatise) up to 49% of its state shares in Österreichische Post - which is currently entirely state-owned - on the stock exchange in 2006. The ÖIAG was initially established by law as a holding concern to administer and manage the companies completely or partially owned by the state. However, in the mid-1990s, this institution changed from an operating concern holding a set of shares in state-owned companies to an executive privatisation agency, whose main role is to carry out the privatisation of all these firms on behalf of the government (AT0312204F).

According to the government’s plans, a draft concept for the privatisation of Österreichische Post will be presented by ÖIAG in the course of January 2006, and the initial public offering (IPO) on the Vienna stock exchange will take place by June 2006 at the latest. The Federal Minister for Financial Affairs, Karl-Heinz Grasser, stresses that the political and economic background to the government’s current initiative on privatisation of postal services is the sector’s increasing exposure to market liberalisation at European Union (EU) level. The argument is that, in particular in the wake of the EU's 2004 enlargement, the partial privatisation of Österreichische Post would create additional potential for a future expansion of its activities in central and eastern European EU Member States. The planned public offer of the company is seen as the only promising strategy for coping successfully with the coming challenge of full market liberalisation by 2009, as targeted by the EU.

Company structure

Postal services were long organised as a state monopoly in Austria. In 1996, this monopoly, the state-owned Austrian Postal Authorities (Österreichische Post- und Telegraphenverwaltung, ÖPTV), was transformed into Post und Telekom Austria AG (PTA), an enterprise based on private company law (AT0203202F). The public employees working for ÖPTV were permanently transferred to PTA under the Postal Services Structure Act (Poststrukturgesetz). Since then, new employees have been recruited exclusively as employees under private law, rather than as public employees. In 1999, telecommunications were hived off from PTA and subsequently partially privatised. At the same time, Österreichische Post was set up, with a scope of business that comprised, aside from mail services (known as the 'yellow post'), scheduled 'post bus' transport services. The latter field of activity was sold to the Austrian Federal Railways (Österreichische Bundesbahnen, ÖBB) in 2002 (AT0206202N). Up to now, Österreichische Post has been wholly state-owned, since government plans to sell off a notable share in it to a 'strong strategic partner' failed in 2003. Instead, it acquired 75% minus one share of feibra AG, a private distributor of advertising material, and expanded into Slovenia and Slovakia by setting up a number of subsidiaries (for details, see Liberalisierung öffentlicher Dienstleistungen - Auswirkungen auf Beschäftigung, Arbeitsbedingungen und Arbeitsbeziehungen, FORBA, 2004).

After the liberalisation of the Austrian telecommunications sector in 1997, liberalisation measures also affected postal services, when the 1998 Postal Services Act (Postgesetz) opened up part of the market for letter post. In 2002, the following postal services were opened to competition in Austria: parcels; unaddressed direct mail; newspapers and magazines; express deliveries; and letter mail with a weight of more than 350 grammes. Since 2003, the market for letters, addressed direct mail weighing over 100 grammes and all outbound letters (sent abroad from Austria) was also liberalised. It is important to note, however, that the Postal Services Act obliges the Österreichische Post to maintain its postal services.

A 2002 restructuring of the company resulted in the further splitting of the 'yellow post' into five distinct business units: advertising mail (Infomail); newspaper delivery; letter post; over-the counter services; and express messenger services (Kurier-Express-Paket). According to management, the primary goal was to prepare the company for market competition (in order to offer services at market prices) and attract potential investors (AT0204203N).

Employment and industrial relations

During the past decade, the number of workers employed by Österreichische Post (and its predecessors) has been significantly reduced due to a continuing workforce-reduction process that has accelerated since 2001. From 2001 to 2005, the number of employees was cut by almost 22% or, in absolute figures, by about 6,600 people. This large-scale personnel reduction is partially due to the 2002 sale of the post bus business. Not only has the volume of employment changed during recent years, the type of employment has changed in terms of working hours. The share of part-time workers has almost doubled during the last decade, which is especially attributable to an increasing number of male part-timers. This is because part-time work has in particular increased in postal distribution centres, due to the creation of new night-shift work that almost exclusively affects male workers.

Temporary agency work has also increased considerably. This form of employment relationship has become more widespread since around 2000. Initially, temporary agency workers were only conceived as a stop-gap at peak times, but for the past few years Österreichische Post has begun to replace 'standard' employees with temporary workers, though the latter are more expensive for the company than the former.

Up to the early 2000s, the workforce was cut in a 'socially acceptable' manner, in that, by way of a 'social plan', early retirement schemes, 'opt-out' models and voluntary turnover were agreed between the Österreichische Post management board and the central works council. However, since 2003 dismissals have also been realised in the context of major restructuring, when, from 2000 to 2005, more than 1,000 out of a total of 2,300 post offices were closed down throughout the country.

Employment at Österreichische Post is still characterised by the co-existence of forms of private- and public-law employment relationships, the latter being most clearly manifested in the career public servants (Beamte), who are a heritage of the former state monopoly (AT0203202F). When the state-owned ÖPTV was transformed into PTA and subsequently into Österreichische Post, new employees were engaged only on private-law contract basis. As a consequence, the share of public sector employees among those working for the company has continually dropped, currently standing at about 60%.

In the field of industrial relations, liberalisation has meant establishing collective bargaining in a new sector, since in former times, when the postal services formed part of the public sector, pay and working conditions were laid down unilaterally by the authorities (it is a significant feature of industrial relations in Austria’s public sector that almost all of its employees are excluded from the right to conclude collective agreements; instead, employment conditions are fixed by law). As a consequence of this development, all postal employees have been covered by collective agreements since 1997, when the first such agreement was signed. The Union of Post and Telecommunications Employees (Gewerkschaft der Post- und Fernmeldebediensteten, GPF) represents the sector’s employees.

Trade unions’ position

Both GPF and the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB), to which it is affiliated, strongly oppose the government’s plans for privatisation of Österreichische Post. In particular, they criticise the timing of the sell-off in 2006 as too early. According to Gerhard Fritz, GPF’s chair, neither the expansion plans presented by the management board nor the company’s business performance over the last years would substantiate the management’s optimistic presumption of a successful privatisation of the enterprise. Rather, Mr Fritz fears a further, large-scale personnel reduction and the closure, relocation or outsourcing of business units in the wake of the planned sell-off, since the pressure on the company to yield profits will further increase due to the investors’ exclusive interest in maximum dividends. Moreover, the government’s announcement that it will withdraw the proceeds of the planned sell-off and use them to boost the overall state budget (and partially fund R&D expenditures), rather than leaving them in the company, has met harsh criticism from the unions. GPF sees the planned withdrawal of the proceeds of the forthcoming privatisation (which are expected to yield EUR 300 million or more) as a major danger to the company. Therefore, it demands that the government drop the current privatisation plans or at least postpone the planned IPO. In order to underline its position, the GPF leadership has organised several protest actions, including a demonstration on 19 January 2006, with the aim of bringing the government round to its position. Moreover, it has threatened to call strikes if the government still proves unwilling to accede to the union’s views.

The chair of ÖGB, Fritz Verzetnitsch, has backed the GPF position, although is so far undecided whether ÖGB would support a possible strike held by its affiliate. Such support would be essential for the employees concerned, since only in this case would they receive strike pay from ÖGB as compensation for income losses during the stoppage. Mr Verzetnitsch is demanding a legal guarantee from the Austrian state, as the owner of Österreichische Post, that not more than 49% of state shares in the company will be sold off in the long term. Only under this condition, he stated, would ÖGB’s consent to a future partial privatisation of the company be, in principle, conceivable.

Parliamentary opposition wants guarantees on future provision

Against the background of a significant dilution of postal services provision during recent years, the parties of the parliamentary opposition have called on the government to give a guarantee of at least maintaining the current number of postal offices. The fear of both the Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) and the Green Party (Die Grünen, GRÜNE) is that, with the planned privatisation of Österreichische Post, the aim of achieving maximum profits will clearly outweigh public interest goals, such as granting a minimum density of the postal services network throughout the country. This would further endanger the security of provision of postal services, particularly in rural regions. Apart from this, the SPÖ points to the fact that with the planned privatisation of Österreichische Post the state would renounce permanent dividends (which amounted to EUR 535 million in the period 2000-5) in favour of single lump-sum proceeds.


Experts differ in their assessment of the necessity/urgency and, correspondingly, the prospected success of a partial privatisation of Österreichische Post in 2006. This assessment depends on what is considered as more important: the company’s range of actions in the capital market or the public interest in a stable and sufficient post service infrastructure. Irrespective of this, the planned public offer of the company is unlikely to be halted, since both the legislative prerequisites and the political determination on the part of the coalition government are present. However, in the face of forthcoming general elections to the federal parliament, any major conflicts in an area as sensitive as postal services would be inconvenient for the government. Therefore, it is currently seeking to placate organised labour by proposing various models of employee participation when it comes to issuing shares in the privatised Österreichische Post. This would mean that employees would enjoy favourable conditions for buying shares. Since, however, pay is quite low in Austria’s postal service sector, and most post employees will thus be not able to buy shares in their company, GPF appears to prefer another model, whereby the union would be entitled to purchase a certain amount of cut-rate shares in order to prevent a complete sell-off of the company in the long run. It remains to be seen what results current tripartite negotiations between the government, the management board and GPF will bring about. (Georg Adam, University of Vienna)

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