Restructuring plans provoke unrest among postal workers

In November 2008, the Austrian Post Company confirmed plans to reduce significantly its workforce and the number of post offices in the medium term, in order to meet the challenges of the full liberalisation of postal services in Europe. As a result, the Union of Post and Telecommunications Employees has organised major protest action. Most experts agree that the company will only survive if equal market conditions for all mail service providers will be established on time.

In early November 2008, major restructuring plans affecting the Austrian Post Company (Österreichische Post AG) were revealed by the media. According to an ‘internal strategy paper’ drawn up by the Austrian Post Company management and leaked to the media, the company’s current workforce of 24,000 employees is to be cut by 9,000 workers and the number of post offices is to be reduced from more than 1,300 at present to only 300 by 2015. This extensive restructuring programme was – after harsh trade union protests – withdrawn from the agenda of a supervisory board meeting held on 12 November 2008 and thus not decided upon at this event. However, management subsequently confirmed that substantial restructuring measures would be inevitable in the medium term to secure the whole company.

Forthcoming market liberalisation

The company management argues that the total liberalisation of the postal services market in Austria by 2011 – affecting also services related to letter mail with a weight of less than 50 grammes – would require substantial adaptation and restructuring processes in relation to the company. In line with this, the supervisory board on 12 November approved a reorganisation programme, as follows:

  • a high but still indefinite number of post offices should be replaced by ‘alternative’ postal service providers, which means outsourcing postal services to small retailers, tobacconists, petrol stations and municipalities;
  • the proportion of ‘private’ postal deliveries should be increased significantly, which means outsourcing letter sorting and postal delivery services to ‘alternative’ providers and self-employed persons.
  • measures aim to substantially reduce labour costs and thus to allow the Austrian Post Company to remain competitive in a completely liberalised postal services market. The company plans to mitigate social consequences of the redundancies by way of an existing social plan and an extended special early retirement scheme for ‘hard workers’, such that dismissals would be unnecessary.

Trade union protests

The Union of Post and Telecommunications Employees (Gewerkschaft der Post- und Fernmeldebediensteten, GPF), which represents the sector’s employees, strongly opposes the envisaged restructuring plans. It firmly questions the necessity of large-scale company downsizing – in terms of both post offices and workforce reduction – and outsourcing of postal delivery activities. Before starting the corporate restructuring process, the regulatory framework for the liberalisation of the letter delivery market has to be determined, the trade union claims. In fact, the newly formed government is currently considering a possible legal framework for establishing equal service provision and employment standards and thus a level playing field for all companies in the sector. In order to avert the Austrian Post Company restructuring plans, GPF has started to organise major protest action, including a token strike that began on 10 December 2008 for an indefinite time period.

Company structure and industrial relations

Up to 1996, postal services were organised as a state monopoly in Austria and the majority of employees were civil servants who could not be made redundant. Since 1996, when this monopoly was transformed into an enterprise based on private company law, namely the current Austrian Post Company, new workers have been recruited exclusively as employees under private law. In 2006, the Austrian Post Company was partially privatised (AT0601205F). Due to the hybrid company structure, employment at the company is characterised by the coexistence of forms of private and public law employment relationships, the latter continually dropping. At present, about 60% of the entire workforce comprises public sector employees.

Since the beginning of the deregulation process in the postal sector in the mid 1990s, a number of mostly very small companies or ‘alternative’ providers emerged, which have specialised in niche markets. In the field of industrial relations, liberalisation has meant establishing collective bargaining in a new sector. However, in contrast to the standard pattern of sectoral bargaining in Austria, only a company agreement covering the employees of the Austrian Post Company has been concluded. The 2,000–3,000 employees of the alternative providers have remained uncovered until now or are covered by collective agreements for other sectors, such as the road haulage or advertising industries. This situation is due to the absence of a sector-related employer organisation (AT0704019Q). The alternative postal service providers have thus far refrained from establishing a sectoral employer organisation and from entering collective bargaining, since inferior working conditions and poor pay have granted them a competitive edge in relation to the Austrian Post Company.

Level playing field recommended for service providers

Experts have recommended setting up a binding regulatory framework for granting equal market conditions for all mail service providers. At present, the Austrian Post Company is obliged by law to maintain its core postal services (‘universal services’), even in regions and with regard to business areas where no profits can be yielded. Therefore, according to experts, alternative providers should either be obliged as well to fulfil a ‘universal services’ task or have to pay some kind of compensation fee (‘burden sharing’). Moreover, they argue that the company agreement concluded for the Austrian Post Company employees only should be extended to the whole sector. However, implementing the latter measure in particular would take some time, which is allegedly needed by the Austrian Post Company management in order to prepare for full liberalisation.

Georg Adam, Department of Industrial Sociology, University of Vienna

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