- Observatory: EurWORK
- Published on: 13 November 2007
Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.
This study examines industrial relations in the Irish postal sector as of January 2007.
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.
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?
Semi-state company An Post holds a largely monopoly position in the Irish postal sector, and operates Ireland’s national postal service. It is a major commercial organisation providing a wide range of services encompassing postal, communication, retail and money transmission services. Accordingly, it operates in several different markets, each with its own market structure, and not solely in mail delivery. Its range of services has expanded considerably in recent years. It is one of Ireland's largest companies, directly employing over 9,600 people through its national network of retail, processing and delivery points. It also employs 1,300 in contract post offices. An Post provides approximately 1,450 post offices across Ireland.
Last year, the Irish Government approved a proposal from the An Post Board to establish a financial services joint venture business with a large Belgium Bank Fortis. Post offices tend to have longer opening hours than banks and are also open on Saturdays and have a nationwide network.
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.
See above. An Post has been a semi-state company since 1984, in the sense that it remains state-owned, but has greater commercial freedoms from state control. In practice, however, politicians have often intervened in the affairs of the company, long after it became a semi-state.
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.
Yes. In 1979, following major public concern over the quality of both the post and telecommunications services, the Posts and Telegraphs Review Group reported to the then Minister for Posts and Telegraphs and recommended the establishment of two new commercial state-sponsored companies to operate the postal and telecommunications services. In 1983, this central recommendation was implemented with the passing of the Postal and Telecommunications Services Act 1983, which established An Post and its then sister company Telecom Eireann, now Eircom.
Since 2002, the postal sector has been regulated by the Commission for Communications Regulation (ComReg). ComReg is the National Regulatory Authority for the Postal Sector in Ireland. One of the principal functions of ComReg is to promote the development of the postal sector and in particular the availability of a universal postal service within, to and from the State at an affordable price for the benefit of all users. In delivering its objectives, ComReg’s focus is to:
- Maintain the availability of an affordable high quality Universal Postal Service to all users within the State
- Secure improvements in quality of service by setting targets for delivery of mail and monitor quality of service performance against targets set in accordance with European standards
- Review domestic and international price applications made by An Post within the reserved universal service area and monitor tariff principles in the non-reserved area on an ex-poste basis
- Ensure accounting procedures are transparent and that cross-subsidisation only prevails to the extent necessary to maintain the universal service obligation
- Provide guidelines to all providers of postal services to facilitate putting a formal complaints and redress code in place
- Promote the development of the postal sector at home by attendance and influencing European and International fora.
The functions set out in the European Communities (Postal Services) Regulations, 2000 have been transferred to ComReg by the Communications Regulation Act 2002, which came into force on 1 December 2002.
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.
An Post is still the Universal Service Provider. However, influenced by the enactment of European liberalisation measures, it appears that the market will be opened up in the coming years to competitors, and it is envisaged that 58% of An Post’s mails business will open up to competition. This reflects the European Commission's aim to accomplish the Single Market for postal services and ensure a high quality universal service, by opening up the sector to competition in a gradual and controlled way on the basis of the regulatory framework of the Postal Directive (Directive 97/67/EC as amended by Directive 2002/39/EC). In recent years, approximately 400 sub post offices deemed unprofitable have been closed.
As part of its preparation for the reduction in its market share, An Post applied to ComReg, the communications regulator, in 2005 for an increase in postal rates. However, the company was dissatisfied with the ComReg decision and, in the absence of an appeal mechanism, it felt that its only recourse was to seek a Judicial Review of ComReg’s decision in the law courts.
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.
The total number of employees employed directly by An Post stood at 8,591 in 1986, but this declined in the early 1990s due to rationalisation and almost stagnant mail volume growth. But staff numbers rose again in the mid to late 1990s on the back of big increases in mail volumes and record economic growth. Direct employment today stands at 9,600,a reflection of an expansion of services. However, it is envisaged that over 1,000 staff will leave the company in the next few years as part of a voluntary redundancy programme under an ongoing change agreement. Accordingly, there has not been any substantial reductions in employment in the sector, which remains largely labour intensive. But the pressures emanating from electronic substitution are gradually being felt.
6. Any relevant other change affecting the industrial relations in the sector.
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.
No. An Post is a semi-state company operating in the public sector. Collective bargaining coverage remains very high.
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.).
As noted above, influenced by electronic substitution, approximately 400 rural sub-post offices, which are deemed to be inefficient/unprofitable, have been closed in the last few years. There used to be nearly 2,000 sub-post offices, but this number has declined to about 1,450. The move sparked controversy given these rural sub offices performed a valuable public service.
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.
See above. An Post currently operates a monopoly position in the mail services sector, though this could change under EU-prompted liberalisation measures. The main arm of An Post is its mail Collection and Delivery service.
4. The sectoral employment levels and developments (possibly broken down by gender, education and skill level) since the mid-90s.
An Post’s Collection and Delivery service employs about 4,500 employees.
5. The legal status of employees.
Commercial semi-state employees since 1984. However, given that the company was previously run directly by a State Department, staff who were employed prior to 1984 retain their former status as civil servants.
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.
The most authoritative pay data in Ireland is provided by the Central Statistics Office (CS0). According to the CSO, average weekly earnings for full-time employees in post and telecommunications in 2005 stood at EUR799.88. Unfortunately, the data does not distinguish between post and telecommunications.
A new Clerical Pay Scale, has been agreed in January 2007 for post office clerical staff, which ranges from EUR395 per week to EUR575 per week. A pay deal agreed in 2002 for postal workers in the central Dublin Mails Centre (DMC) envisaged a maximum annual salary of EUR44,000 for postal workers on 48 hour a week contracts, with a maximum of EUR32,000 for those on a 37 hour week (these wages would have since been up-rated in line with national wage agreements).
In comparison, average weekly full-time earnings in the semi-state sector stood at EUR906 in 2005, while average industrial earnings stood at EUR592.
7. The presence of any regulatory authorities or agencies with a brief explanation of their entitlements (price setting, issue of licenses, etc.).
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).
Through national-level social partnership agreements, as affiliates of broader confederations, unions and employers in the postal sector would have some influence on sectoral developments.
9. Any other feature important to seize the peculiarities and the main problems to be solved in the sector.
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.
No peculiarities in this regard.
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?
An Post is almost fully unionised, with almost complete density. The Communication Workers Union (CWU) is by far the largest union in the postal sector, representing over 7,000 of An Post’s 9,500 strong workforce. Also, the Civil and Public Service Union (CPSU), the Public Services Executive Union (PSEU), and the Association of Higher Civil and Public Servants (AHCPS) represent a number of staff in clerical and management grades. Further, the Irish Postmasters Union (IPU) represents a number of postmasters in sub-post offices.
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?
An Post is an affiliate of the Irish Business and Employers Confederation (IBEC), which represents it in relation to major issues affecting the sector.
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?
Collective bargaining at An Post occurs at both local and national level. National social partnership agreements establish minimum pay terms. However, over the years, local company-level collective bargaining agreements have been negotiated at An Post, including the 2000 Transformation Through Partnership agreement.
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?
Given the very high level of union density, collective bargaining extends to nearly all staff in An Post.
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.
Collective bargaining at An Post extends to a wide ranging of issues relating to pay and terms and conditions of employment. Below we provide summary details of the last major collective bargaining agreement negotiated in An Post, the Transformation Through Partnership Agreement 2000. The key elements in the agreement included a special once-off pay rise of 3%, a lump sum of IEP£1,500, an employee share ownership plan (ESOP) – involving an employee stake in the company of 14.9% - in return for major change, including annualised hours arrangements aimed at curbing the company's overtime bill.
The An Post employee share-ownership plan (ESOP) is similar to that which was agreed in 1998 prior to the privatisation of Ireland's leading telecommunications company, Eircom (then Telecom Eireann), when employees there secured a 14.9% stake. Prior to privatisation in July 1999, Eircom, negotiated its ESOP in return for a change and transformation agreement which included major work practice changes and over 2,000 redundancies. Eircom was valued at around IEP 2 billion at the time, a valuation which trebled when the company went public in July 1999. This put a valuation of over IEP 75,000 on individual worker shareholdings. The 14.9% An Post deal is far more modest, with the company valued at the time at just IEP 150 million, leaving individual holdings at around IEP 2,500 to IEP 3,000.
7. The impact of outsourcing/contracting out on collective bargaining coverage and working conditions.
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?
An Post has been characterised by a long history of industrial conflict and adversarial industrial relations, and this remains the case today. In particular a bitter pay strike lasting nearly nineteen weeks occurred in 1979. It started out as an unofficial strike but mushroomed into a national postal strike, which hit business and domestic users. After the creation of An Post in 1984, near were numerous local unofficial or wildcat disputes, as the climate of deep-rooted adversarialism continued. In 1991, a major row between management and union occurred in relation to the 1991 Viability Plan. More recently, adversarial industrial relations continue, despite a failed attempt to embed partnership. In 2004, there was a major row over the implementation of change and over management’s decision to withhold part of a national wage increase. Again, in 2005, there was another bitter dispute over pay for change proposals. This row was settled by the Labour Court, which found that 4,500 Communication Workers Union (CWU) members in collection and delivery should receive pay increases due to them under the national agreement in return for acceptance of an amended change programme. Over the years, the state’s third party dispute resolution institutions have had to intervene on numerous occasions to resolve disputes at An Post.
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?
The most prominent attempt to inculcate participatory practices at An Post occurred through the implementation of the 14.9% Employee Share Ownership Plan (ESOP) in 2000/2001 (see 6 above). An attempt to build partnership arrangements at An Post occurred between 1998 and 2003, but ultimately collapsed under the weight of deep-rooted adversarialism. The attempt to foster more cooperative relations gained ground in 1998 when trade unions and management begun work on a complex partnership process, and the intention was to keep it separate from day-to-day industrial relations issues. An essential feature of the partnership structures is that they were to be based on both a business unit and on a local basis, moving away from the sort of centralised structures which had been dominant in An Post for decades. The joint union/management efforts were also seen as an attempt to act on the recommendations of a number of highly critical reports at the time. The two main studies were by Price Waterhouse (1995) and Employee Relations Services (1997), a consultancy division of the Irish Business and Employers Confederation (IBEC). For example, the Price Waterhouse report described the culture within An Post as being characterised by a public service ethos rather than a commercial customer-oriented one, historically based in the tradition of the civil service and reinforced by existing agreements, structures etc. This culture is reportedly not consciously expressed, but is nonetheless strong and ingrained. The attempt to foster partnership collapsed around 2003, and there has been a marked return to adversarialism. The historically fraught relations between unions and An Post management have become very difficult once again. As a result, former Irish Congress of Trade Unions (ICTU) general secretary and current chairman of the National Centre for Partnership and Performance (NCPP), Peter Cassells, has been brought in to facilitate improved relations between management and unions within some kind of reactivated partnership framework.
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.
Social dialogue employment and labour relations issues occurs at national level through social partnership pacts.
11. The membership of national actors in European-level cross-industry and sectoral organisations.
Commentary by the NC
It is particularly important that each NC gives its own comments on the issues covered by this study, paying particular attention on the consequences of the changes affecting the sector over the last decade and on the differences between public and private providers. Please provide any additional information that you consider important to better understand the current situation and recent developments in the sector covered by this study in your country.
Ireland’s semi-state postal company, An Post, still holds a largely monopoly position in the sector, although this looks set to change under the influence of EU liberalisation pressures. The ability of the company to react to change has historically been hampered by deep-rooted adversarial relations between management and trade unions, which were transferred over when the company became a semi-state in 1984 after previously being under direct state control by a Government Department. The level of conflict means that collective bargaining negotiations are inevitably protracted and disputed. A brief attempt to embed workplace partnership at the end of the 1990s failed, influenced no doubt the legacy of adversarialism. Conflict has returned to the company with a vengeance, and the latest attempt to reactivate partnership arrangements, which is still at germination stage, will face a stern challenge (Tony Dobbins, IRN Publishing).