The Labour Court has linked the payment of Sustaining Progress to

by Paul Kinsella - An Post Worker (Strictly Personal Capacity!)! Fri Jul 22, 2005 03:12 paulkinsella53 at yahoo dot com 53 Lorcan Grove, Santry, Dublin 9, Ireland 085-7105140

This is the management's spin!

"Dear Colleague

An Post has received the Labour Court recommendations on the An Post Collection and Delivery Change Programme, including the recommendations of the Technical Group on Terms for a Work Practice Change Agreement, as proposed by the Court in February 2005. The Labour Court has also issued its adjudication on the payment of the remaining terms of Sustaining Progress, referred to the Court by the An Post Group of Unions on June 7th last.

A number of key points should be noted at this stage:

The Collection and Delivery recommendations encompass a very detailed agreement covering fundamental change in the operation of the business.

The agreement is intended to bring substantial benefits to both An Post and its staff. The Court has recommended that a Monitoring Group be appointed to oversee the implementation of the agreement and to verify the achievement of the savings in accordance with the timeframe set out.

The Court has said the when the C&D recommendation is accepted and ratified, and the annexed agreement is entered into between the parties, the phases of Sustaining Progress, apart from the 5 per cent already paid, should be paid with effect from the due dates.

The retrospection of the Sustaining Progress increases to the dates on which they would otherwise have been due should be discharged when the company is returned to reasonable and sustainable profit and its financial and commercial circumstances permit. In considering payment of retrospection, the parties should consider giving priority to the amounts due on pensions."

by Paul Kinsella - An Post Worker (Strictly Personal Capacity!)! Sun Jul 24, 2005 22:28 paulkinsella53 at yahoo dot com 085-7105140

Role of new mechanism is key to ensuring change in An Post

BRIAN SHEEHAN

Unions in An Post look set to secure all phases of Sustaining Progress if the main union in thecompany, the Communications Workers Union (CWU), accepts a Labour Court recommendationbacking major change in the collection and delivery operation. The Labour Court has backed payment of all phases of Sustaining Progress, to be paid over a two-year period, as long as the largest, the CWU, ratifies the change programme for its 5,500 members in collection and delivery (C&D).

The Court issued two recommendations last week, the first dealing with the outstanding phases of Sustaining Progress, only 5% of which could be paid according to a twoperson LRC appointed assessors panel, on 'inability to pay' grounds. The second Court recommendation backed a 63-page agreement drawn up by a three-person technical group dealing with change on an item-byitem basis in C&D.

Essentially, the assessors had already ensured 5% of SP "up front" - where nothing was paid up to that point - but they also said that the remaining 8.5% outstanding under SP could be achieved if major change is agreed and implemented. Resolving this traditional conundrum in An Post - the gap between agreement and implementation - is the key to resolving this difficult dispute. But whether the Court has fully resolved it remains to be seen.

The Court has attempted to resolve the implementation problem by linking payment of SP to agreement on the change plan, and by linking payment of productivity elements of that plan to actual verification of change by a new monitoring group. In other words, the new productivity payments must be formally verified if they are to be paid. For SP to be paid, the CWU must sign up to the change agreement in C&D. The implication, however, is that the change plan would be implemented and this will be overseen by the monitoring group.

UNLOCKING CHANGE

The report on how change in C&D might be achieved was sought by Labour Court chairman, Kevin Duffy, over six months ago when he established the three person technical group: Tom Pomphrett, deputy director of LRC conciliation services, Phil Flynn, consultant and former president of ICTU, and Eamon Ryan, a former senior manager in An Post.

Around 1,500 voluntary redundancies will be unlocked when that change is put in place, some 900 of them in the C&D area. Only when these are implemented in line with implementation of change will the projected savings in the C&D plan be realized. The big unanswered question, however, is whether the threeperson monitoring group will be able to ensure that the change programme will actually be implemented at all stages. It will be able to stop separate productivity payments (worth a total of 6.7%), but it does not seem to be empowered to stop SP payments. That said, it would certainly be called on to issue binding decisions if the company were to withhold such payments, due to any rows over non-implementation.

A STRONG TEAM

For the company, which wanted payment of each phase contingent on the formal verification of change, there is the fall back that the technical group changes into the new monitoring group, which will track actual implementation of the plan. But the company will be disappointed that there is no locking mechanism that will link actual achieved change to payment of SP, as opposed to the productivity rises.

The three-person team, however, is acknowledged as a particularly strong one, possessing in-depth knowledge of the company's operation and of its culture. All three, in quite different ways, have a vast body of experience of the company built up over decades.

Should actual change not be implemented on the ground, the company can appeal to the monitoring group, which can issue binding decisions - in an industrial relations sense - on disputed issues related to the change agreement. The findings of this monitoring group on all matters within its remit "should be final and binding on all parties." This may fall just short of what the company would have wanted, but the upside for management is that this should make the entire plan easier to sell to union members, who had wanted all phases of the national agreement paid as of right.

The unions, in particular the CWU, have insisted on full payment of SP with no strings attached. But the union knows that the slight chink opened by the assessors has widened to give it full payment of SP (retrospection is a separate matter) as long as it signs up for change. Ultimately, therefore, the union also knows that the verification of that change will be the new battleground if the Court's rulings are adopted.

A BALANCING ACT

The Labour Court faced a difficult task in this dispute. It could not, nor would it, undermine the decision of the two LRC appointed assessors, which found that the company could pay 5% of the SP payments, but no more, unless change was implemented in C&D. So what the Court has done is to build on the assessors' report, tying payment of the outstanding SP payments to acceptance of the recommendations of the technical group on change in C&D.

In other words, the technical group (now to be the monitoring group) looks set to act as a sort of guarantor of the agreement, and may represent a fledgling internal industrial council. In this way, it could be argued that the 'three wise men' who make up the group are also stepping into certain aspects of the job that management and union officials and activists might be expected to perform in a company with a more healthy industrial relations climate than An Post.

TRACKING THE ARGUMENTS

It is worth tracing the Court's recommendation in detail to see just how it handled the assessors report and used its findings as a basis for opening up a 'window' through which this row may finally be settled. Two assessors were used - experienced consultant Brian Aylward was joined by Rory Mcllroy, the national director of Concern.

The Court's SP recommendation recalls that in LCR 18088, when the Court had proposed the appointment of assessors to report on the economic, commercial and employment circumstances of An Post, "in the context of the company's plea of inability to meet the pay terms of Sustaining Progress".

In their subsequent report, the assessors concluded that An Post could pay a full 5% increase under SP from January 1,2005. The assessors went on to maintain that the company could not afford any further elements of SP, or the mid-term review, "other than in the context of securing finalisation on rationalisation and restructuring requirements."

The company accepted the assessors report and paid the 5% increase, but the Court noted that the union did not accept it and urged the Court not to adopt the conclusions made by the assessors.

The Court, however, noted that paragraph 1.10 of the SP pay agreement requires the Court to give "serious weight" to the assessors report. "In practical terms," the Court said, "this means the Court must be guided by the conclusions reached by the assessors in formulating its recommendation unless exceptionally compelling reasons can be demonstrated in this case.

Accordingly, the Court has adopted the report of the assessors in formulating this recommendation." The Court noted that the assessors concluded that the company "cannot afford any elements of Sustaining Progress beyond the 5% already paid other than in the context of securing finalization on rationalisation and structuring requirements". In that regard, it was accepted in the course of the hearing that the company's most significant outstanding requirement "is in relation to the restructuring of the collection and delivery of mails."

"SUFFICIENT SAFEGUARDS

Referring to its recommendation (LCR 18620), which sets out proposals for a new agreement on work practice changes in the collection and delivery area, the Court said that when this is accepted, and the annexed agreement is entered into between the parties, the company's rationalisation and restructuring requirements will have been substantially fulfilled".

In line with the assessors report, the Court argued, "it will then be possible for the company to address the outstanding elements of Sustaining Progress". In that regard, the Court said it was satisfied that LCR 18620 "contains sufficient safeguards by way of monitoring and arrangements for final adjudication so as to ensure delivery of the measures provided for in the draft agreement."

The Court noted and accepted that an increase in the tariff is an essential element in the overall recovery plan. However, this is a matter outside its control and the control of staff (other than an improvement in efficiency "will undoubtedly assist the company's case"), so it "does not, therefore, consider it reasonable to defer increases on this basis alone if the main conditions for payment identified by the assessors have been met".

PRICE RISE COMMENT

The Court said, however, that the issue of an increase in the tariff is nonetheless "a matter to be considered in the context of the company's ability to pay arrears, as provided for later in the recommendation." The Court, therefore, recommended that on acceptance of LCR 18260, and ratification of the draft agreement annexed to that recommendation, the following should apply in respect of increases in salaries and pensions: The phasing of increases under Sustaining Progress, if fully implemented, would be as follows:

1st Part of Sustaining Progress.

K 3% with effect from 1st Nov 2003

i 2% with effect from 1st August 2004

a 2% with effect from 1st Feb 2005

2nd Part of Sustaining Progress.

a 1.5% with effect from 1st May 2005

B 1.5% with effect from 1st Nov 2005

a 2.5% with effect from 1st May 2006

The Court said that the 5% already implemented should be regarded as including the 3% due on November 2003 and the 2% due on 1st August 2004, under the first part of SP. The 2% increase due on 1st February 2005 under the first part of SP and the 1.5% increase due on May 1, 2005, under the second part of SP, should be [paid with effect from the due dates. Further increases should be paid as they become due, the Court said.

ARREARS/RETROSPECTION

The Court further recommended that retrospection of the increases recommended, to the dates on which they would have otherwise been due, should be regarded as a liability due to employees. "The amount due should be discharged when the company is returned to reasonable and sustainable profit and its financial and commercial circumstances permit". The payment of the amounts due should be jointly considered by the parties at the end of the next financial reporting period (and at the end of each reporting period thereafter as necessary) having regard to the financial circumstances of the company. "Payment of the retrospection can, if necessary, include appropriate phasing. In considering the payment of retrospection the parties should consider giving priority to amounts due on pensions," the Court advised.

'THREE WISE MEN'

In the second of last week's two recommendations, the Court (LCR 18260) noted that the Technical Group (Phil Flynn, Tom Pomphrett and Eamon Ryan), which was asked to report to the Court, after which the Court would issue a "definitive recommendation," had reviewed supporting documents and sought to access issues on which a measure of agreement could be achieved. The group has set out the terms on which work practice and other employee related changes should be introduced in the collection and delivery area. The Court said it "is fully satisfied" that the Group's proposals provide the best possible approach to achieving the modernisation and change that An Post must attain. It will recommend to the parties that it be adopted. The Court said that the Group's draft agreement is intended to bring substantial benefits to both An Post and its employees. "It is crucial that there be confidence in the implementation of the proposals, and that a framework is put in place which can resolve difficulties, should they arise, quickly and fairly." With this in view, the Court recommended that a Monitoring Group (comprising members of the Technical Group) be appointed to oversee the implementation of the agreement and to verify the achievement of savings in accordance with the timeframe set out for the phasing of the productivity payments referred to at Chapter 15 of the draft agreement. Crucially, the Court said the findings of the Monitoring Group on all matters within its remit "should be final and binding on all parties." Finally, the Court said it wished to set out "in this recommendation its thanks and appreciation of the excellent work undertaken on its behalf by the members of the Technical Group."

A MAJOR DRAFT AGREEMENT

The actual report of the Technical Group explains that to meet the challenges facing the business and tackle the company's serious financial situation - and meet commitments made under the 2000 partnership agreement (TTPA) - the parties must reach agreement. Any interpretation of the agreement not immediately resolved locally, or then at headquarters, will go to the LRC and the Labour Court if necessary. They state that the Court's decision shall be binding. (As noted above, the Court has effectively passed that binding role back to the Monitoring Group).

The recommendations of the three wise men deal with almost every conceivable aspect of working conditions, operations etc. A whole range of operational issues are dealt with, from collection and delivery routes to how offices should operate, while working time and overtime are addressed. A new grading structure is a critical element of the plan, for which productivity awards are to be paid. The draft agreement is quite similar in approach to the one adopted by the LRC when it guided Aer Lingus and the trade unions there to agreement on the post 9/11 plan that led to the airline's spectacular recovery. In An Post, there is to be a new work attendance liability, with an aggregate 37.5 hour working week, with room for variable hours contracts in any individual office from a minimum of 21 hours to a maximum of 48 hours.

OVERTIME ADDRESSED

The vexed question of overtime working, a traditional and necessary part of the company's operation, is also tackled. Various agreements over the past 15 years to curb the huge overtime bill have largely failed to deliver real savings. Now, staff will continue to be required under their contract to work overtime, where necessary, and all overtime must be authorized by management. Absence should no longer require automatic cover.

For surplus staff, a Redeployment/Resource centre - to be located in a large urban area - is seen as a mechanism for managing employees who would be surplus at any given time. The centre will ensure opportunities for employees to act as cover are maximized; for the provision of appropriate training etc, and; to reduce the number employed by the company to a level appropriate to its needs. The current grading structure in C & D operations is to be replaced by a new five part structure: DSM 1, DSM 2, Working Leader 1, Working Leader 2 and Postal Operative (PO). The new PO grade will encompass the work and duties currently performed by the post office clerk and postperson.

COMPENSATION AND ASSIMILATION

A non-consolidated productivity allowance of 4% (non-pensionable) should apply from commencement date of agreement. Postperson pay scales should be increased by 2.4% after 12 months (phase 1) when 46% of the savings have been achieved in accordance with the company's implementation plan and by 4.25 after 24 months (phase 2), when 96% of the savings have been achieved. Payment of these increases will be subject to independent verification that the union has cooperated and complied fully with revised working arrangements. This would have the effect of increasing pay by this grade by 6.7% over two years.

For other grades, a nonconsolidated productivity allowance of 12.5% (83.67% to be pensionable) should apply, to be paid in three equal phases. All future entrants to the grade of PO should receive the following weekly pay scale: ˆ400.22; ˆ410.50; ˆ420.62; ˆ430.84; ˆ440.96. What are known as 'mark time' payments should be subject to compulsory buyout at a multiple of two and half times the annual payment. Full details of the voluntary severance/early retirement scheme: i SS1 Age 60+ 5 yrs potential service to the minimum retirement age. Pension & Lump sum at 60 + (9 weeks per year) 3.5 yrs max.