Postal row has outdated practices and must deliver change

REMEMBER the postal strike? It hasn't gone away you know. And it may be about to visit on all of us in a big way this time.

Accountants Grant Thornton are due to report back to the National Implementation Body (NIB) today with their analysis of the cost of various new measures An Post would like to introduce.

A brief history of the story up to now is that An Post refused to pay wage increases under the National Partnership agreement until certain work practices were changed as part of the deal.

The State postal company called on a clause in the national wage agreement, namely inability to pay, to make its case. It seems that An Post can't pay.

Two years ago, it was losing 40m per year and its extraordinary work practice legacy issues means that it has an overtime bill of around 40m per year.

Both the Labour Court and the Labour Relations Commission supported An Post's case, and the union involved refused to implement the findings of these bodies.

Staff were about to strike, when the NIB was called in. This is another industrial relations body which forms part of the overall national agreement infrastructure.

Basically the union didn't accept An Post's analysis of its financial position in issues like its ability to pay and the cost of implementing certain changes.

EXAMINE

Grant Thornton was asked to examine the figures and report back. So we should find out before the weekend whether there will be a strike or not. There is a lot at stake.

Firstly, unions never dreamt that an inability to pay clause in the national wage agreement could ever be applied by a State company. In theory, the shareholder has access to the billions in the Exchequer, and, therefore, how can it not be able to pay?

But if we are to continue to have State-owned companies, they cannot simply operate on the basis that the firm's balance sheet is supported by the bottomless pit of Exchequer money.

Unions cannot regard it as being 'all the same pot' anyway. In the past, the Exchequer bailed out inefficient State companies like NET, Bord na Mona, Irish Steel and Aer Lingus, along with some private sector ones like insurer ICI.

The current An Post dispute also has longer term implications for the next round of national pay talks. We may see the unions try to impose a different kind of inability to pay clause in any new agreement. This would be totally unacceptable to employers.

The other issue is the future of An Post itself. The company is choking under its own work practices. I'm talking about things like the bicycle cleaning allowance, the eating on the job allowance, the ability of some postmen to do their own delivery run in four hours and then within another few hours do a 'sick' colleague's run later on that day at an overtime rate.

Competition is on the way, and even if the current management team gets these work practice changes through, there is still a question mark over the long term viability of this company in its current form.

MARKET

Minister Noel Dempsey is ready to open up the whole market to competition by 2009, and he has indicated that he may be willing to act even sooner. Around 100 customers account for over one third of An Post's domestic post volumes.

This makes it extremely vulnerable to competition. Despite so much change in the private sector in the last ten years, there remain ghettoes in the public sector of a very old view of the world.

However, management at An Post, particularly past management, is not without blame here. The company told the Department of Communications a few years ago that it was making a modest profit when it fact it later emerged it was losing a fortune.

Somebody from management at some stage in the past sat down and agreed the work practices and overtime rules that currently apply. The appalling situation at An Post has been allowed to stagnate for far too long.

Even if it succeeds in getting some work practice reform through it is hard to see how sufficient transformation can be achievedto sustain a viable State-owned postal service in the future..

At least some progress next week would be a step in the right direction.