An Post staff to get £2,600 each

Employees in An Post will receive nearly £2,600 (euro 3,301) each in an employee share option plan (ESOP) which will be established at the State-owned company as part of a Bill published by the Minister for Public Enterprise, Ms O’Rourke, yesterday.
The ESOP was concluded last year on foot of a transformation agreement between management and unions at the company. It provides for an employee shareholding of up to 14.9 per cent of the company in exchange for savings and changes in work practices.

With An Post valued at £150 million, this means that its 8,500 workers will gain more than £22 million in the ESOP. The company is seeking annual savings of £27 million.

The Bill provides for the reduction in the number of employee directors on the board of An Post in order to allow for a director representing the ESOP or a future equity partner to be appointed to the board.

It also allows the company to enter into an equity-based alliance with another postal company. The list of possible partners includes Deutsche Post of Germany, its Dutch counterpart, TNT Post Groep, Consignia – formerly the Royal Mail – in Britain and France’s La Poste. An Post has been in talks with these organisations, but no conclusion has been reached.

One of the major attractions of An Post as a potential partner is that 30 per cent of the mail it handles is sent outside the State. This contrasts with a European average of 7-10 per cent.

But other revenue streams, such as processing social welfare payments, which makes up 44 per cent of business, may come under threat. A Government decision not to put this out to tender is the subject of a complaint taken by the Irish subsidiary of a US firm, Transaction National Services, with the competition and procurement authorities in Europe.

Any future alliance is likely to hinge on inroads being made into improving the poor profit margins at the company. Despite revenues of £424 million in 1999, it reported pre-tax profits of only £11.7 million.

Questions surround the future of the rural post office network. Last month, a report by industrial relations consultant Mr Phil Flynn said the State’s post offices were technically insolvent and would quickly become bankrupt without a change in the way they are funded.

It said An Post’s “preferred option” was to close 1,500 suboffices and maintain only 400 of its 800 automated outlets. An Post would still require a £4 million subvention this year and £27.1 million by 2005 to keep 400 post offices open. The company will require £83.2 million in subvention by 2005, the report said.