The ‘phantom overtime’ that could bring down Irish An Post
An Post is now what is known in industry circles as "a basket case".
Whether the blame rests with a management that brought a company with cash reserves of 170m in 2000 to accumulated losses of 100m by the end of 2004, or an intransigent union that cannot enforce the deals it makes to rationalise the company, is largely irrelevant.
The stark reality facing the management and staff of the company is that it is racking uplosses of 600,000 a week. As the Minister for Communications Dermot Ahern pointedout, "Its cash reserves are almost exhausted and the company has only a finite amount offamily silver to sell to keep it afloat."
Sources in Government are also adamant that if An Post does go bust, as could happen this year, the Government, even if it were willing to bail it out (and Charlie McCreevy would not appear to want to do that), will not be permitted to do so by the EU.
With falling revenues and rising costs, the company is heading inevitably towardsinsolvency. It is finding it increasingly difficult to make more money because it hasn't been granted postage-stamp increases, due to its inefficiencies. Email, courier services and deregulations are cutting away at its core business.
Delivering the post is people-intensive. Someone has to walk, cycle or drive around with the post, which is An Post's main business. The average pay of a postman working 37.5 hours a week is 24,000, including allowances. But with overtime factored in, the average pay rises dramatically to 39,000.
It is this 15,000 "wedge" that management wants to eliminate. According to them, it isequivalent to employing 500 extra workers.
An Post's paybill is 110m – 35m of it is overtime and 20m is allowances. In Dublin, the pay bill is 34m – 17m of which is overtime. This arose gradually until it becamepart of their institutionalised pay. When postmen arrived at work they spent the first two to three hours on overtime, sorting the mail for the day's delivery. They then did their regular 37-38-hour week. For years, this was the way it worked.
When An Post sold its highly lucrative internet start-up Ireland On-Line in 2000, it invested the 150m windfall in new technology for distribution centres in Dublin, Cork, Athlone and Portlaoise. These centres are now automated so that when postmen arrive at work, the bags are ready for them to begin the day's deliveries.
But a year after this equipment was installed, postal workers are still claiming what An Post now calls "phantom overtime" of more than two hours and if they don't get it they go into dispute.
When the new company boss Donal Curtin took over An Post from John Hynes, he ordered a Strategic Recovery Plan. More than 50m was factored into the accounts to provide for redundancies, and deals were done to try to focus An Post on its core purpose of delivering the post.
Difficulties arose almost immediately and a four-day summit was called last December.The Communication Workers Union (CWU), with 19,000 members and almost 90 per cent of postal workers, walked out of the talks, held a ballot and was given a mandate for strike action.
Cutely enough, the union has disrupted the mail to the maximum effect with the minimum disruption to their pay packets, as 70 per cent of them are still on the payroll, despite the suspensions. Management claims it has deals at national level with the CWU forco-operating with new business (12 per cent increase) and reducing 40-50 Post Offices tosub-offices (three per cent, plus lump sum). That agreement was supposed to see 22"delisted" by the end of 2003. Only three have been delivered.
When it come to implementing the agreements, An Post says the CWU takes the moneybut is "incapable of delivering" because most of its members are "in denial" about thestate of the company and refuse to carry out new work practices.
The new reality for the postal service is reliability rather than speed. Email, fax and othermethod of communications are much faster, but when sending documents, or ensuring that every household gets a message then An Post remains one of the best and most cost-efficient means of communication. What should concern the postal workers is that most people are not concerned about the dispute, nor are they deeply troubled if it turns into a full-blown strike. They'll just find other ways to communicate until it's over.
