LCR21563

The CWU stated that;

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  1. It has cooperated fully with LCR21206 and implementation of the specific measures to apply in Phase 1, i.e. Sick Pay Scheme, Revised Severance Terms and Home Garaging cessation. Accordingly the question of additional savings in that regard does not arise.

  2. It has further agreed both the revised Staffing Process and the new Industrial Relations / Industrial Peace Protocol as a result of discussions arising from LCR21206. Both of these combined are worth more than any suggested shortfall between the savings required and savings achieved to fund their 50% of the cost of the first phase pay increase.

  3. It does not accept any responsibility for the Company’s apparent difficulties in implementing change during the last year. It had suggested alternative approaches which would have resulted in a more effective implementation of these changes, which would have resulted in additional cost savings arising through reduced VS/VER Scheme costs in respect of departing surplus staff.

  4. There is an expectation of a 3.5% increase from the 1^stof July 2017 as this is provided for in the earlier Labour Court recommendation.

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  1. The cost savings equal to 50% of the cost of the 2.5% phase 1 pay increase have not been achieved.

  2. An Post’s financial and trading circumstances have remained challenging since they were presented to the Labour Court at the hearings that resulted in two earlier Recommendations.

  3. The company has made real progress in respect of the contribution of pricing and growth to the future financial viability of the core business, by earlier this year achieving shareholder approval for a significant increase in prices. While this will result in a revenue increase annually there may be an acceleration of mail volume decline arising from this level of increase, but this may take some time to impact.

  4. While the new Industrial Relations / Industrial Peace Protocol and the new Staffing arrangements are welcome and beneficial to both parties, it is not possible to place a direct monetary value on them. By having them they will influence the achievement of other cost savings and these are either yielding savings or they are not.

  5. Even if ‘additional efficiency measures’ are agreed which equal or exceed 50% of the cost of a 3.5% pay increase, it would be inappropriate to award an increase of that amount in any circumstances.

RECOMMENDATION:

This dispute relates to the finalisation of an outstanding claim by the An Post Group of Unions for a 6% pay increase. The claim has been the subject of two previous Labour Court Recommendations; LCR21053, dated 6^thOctober 2015, and LCR21206, dated 1 April 2016, which have been accepted by the parties.

LCR21206 set out a basis for an award of a pay increase of 2.5% with effect from 1^stMay 2016 and also set out the context in which further pay talks could take place with a view to the potential of further pay increase(s) being implemented no earlier than 1^stJuly 2017, unless agreed otherwise. A key feature of this was that negotiations should take place between the parties to identify further “additional efficiency measures”, in addition to those required under LCR21206 and relating to the payment of the 2.5% from 1^stMay 2016. Those ‘additional efficiency measures’ would fund 50% of the cost of any further pay increase that could be agreed between the parties. The Court also recommended that the Monitoring Group would be responsible for verifying the achievement of savings and adjudication on any disagreement regarding the date and or amount of any further award including where there is a shortfall in the level of savings required.

The Court understands that the parties last met with the Monitoring Group on 20^thJuly 2017 to review the savings achieved to date in respect of the first phase and the progress made in respect of identifying additional cost saving measures to fund a further increase in pay. At this meeting the CWU advised that it wished for the matter to be referred back to the Labour Court as provided for in LCR21206.

The Court has considered in detail the written submissions of the parties and the extensive oral submissions made by the parties at the hearing of the Court. The Court also notes the report received from the Monitoring Group. Taking account of all of the detail of the above and in the context of LCR21206, the Court recommends as follows:

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  1) Additional Efficiency Measures

Notwithstanding the above, on the basis that the proposed significant number of staff reductions are implemented in Mails Collection & Delivery by the end of 2017 via the proposed alignment of resources with the reducing workload in a faster manner than heretofore, 50% of the savings accruing from this initiative should go towards the Union’s contribution to funding their 50% cost of the next phase pay increase.

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  2) Verification of Phase 1 funding

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  3) Next Phases

Phase 2 – 2% with effect from the 1^stJuly 2017, and

Phase 3 – 1.5% with effect from the 1^stJuly 2018

The annualised cost of this two-phase pay increase is estimated by the Company at circa €15m. The required 50% funding contribution from agreed additional efficiency measures from the Unions is circa €7.5m. As the overall cost is dependent on the amount of the pay increase that is pensionable the Monitoring Group shall verify the actual cost and the required savings with the parties.

In respect of the third phase, should the implementation of the phase 2 and phase 3 additional efficiency measures deliver verified annualised savings in excess of the required amount by the end of March 2018, then the 1.5% increase may be brought forward by up to three months, to the first day of April 2018. In these circumstances the third phase will be of 12 months in duration, expiring not earlier than the 31^stMarch 2019. The savings under all phases and the payment date of phase 3 are subject to verification by the Monitoring Group based on the actual annualised savings.

The Monitoring Group will therefore continue to review the achievement of savings on a quarterly basis and may make a recommendation in this regard if appropriate or, if necessary, refer the matter back to the Labour Court for final decision.

In order to fund 50% of the cost of the pay increase, the following additional efficiency measures shall be implemented:

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  1. Mails Collection & Delivery

  A reduction of circa 290staff FTEs to be implemented by November 30^th2017 in accordance with the process recently agreed in this regard between the parties. This number is net the staff FTE reductions planned for 2017 under the traditional C&D redesign process. 50% of the ongoing savings arising from the above staff FTE reduction is to contribute to the overall pool of savings to fund the Unions 50% of the cost of this pay award.

  The staff FTE numbers and the C&D locations are to be finalised between the parties, with the assistance of the Monitoring Group, as required, within a two week period from the date of this recommendation.

  2. Retail

  The conversion of 7 Post Offices to contractor status, shall be completed by the end of 2017. In order to incentivise the staff option of becoming a Contractor (Sub-Postmaster) at each location, the following terms shall apply: (i) current Voluntary Severance terms (up to maximum of two years pay), (ii) after a period of two years from the conversion date, the rate which the company will cover in respect of seconded staff to the Contractor shall be the hourly amount in excess of the hourly “living wage” in Ireland, and (iii) revised contractual terms in accordance with the new commercial contract currently under negotiations between the Company and the recognised Sub-Postmaster / Contractor representatives. The parties should refer any unresolved issues arising in this regard to the Monitoring Group for consideration and determination.

  50% of the total savings arising from the conversion of Post Offices is to be allocated to the overall pool of savings to fund the Unions 50% of the overall cost of this pay award.

  3. Clerical Managers

  A common Clerical Managerial structure to be introduced with the existing permanent post holders being red circled on their current pay scale, on a personal to holder basis. The structure is as set out below:

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    CM1 – HEO’s, Superintendent 1s

    CM2 – EO’s, Superintendent 2s

    CS1 – Overseer, DPM

    CS2 – Front Line Supervisor

  
  The parties will endeavour to conclude agreement regarding the remuneration of Future Entrants to the above Clerical Management structure within a period of three months from the date of this recommendation. If the parties cannot reach an agreement on the matter within that time period, it should immediately be referred for Third Party determination in accordance with the agreed IR procedures. An amount of 50% of any savings arising from this element of the agreement will be counted towards funding the unions’ half of the cost of the above pay increases.
  
  4. Closure of a Mails Processing Centre

  The parties are to conclude discussions regarding the Company’s proposal to reduce the size of its mails processing network within a period of six months from the date of this recommendation. As a first step, the parties should agree the operational changes to enable the cessation of the temporary diversion of the Fonthill/Portlaoise mails, if feasible, within four weeks of the date of acceptance of this recommendation. Subject to the completion of the substantive discussions, including consideration of the review already carried out by the Company in this regard with McKinsey Consultants, the parties should also agree an implementation plan within the above period, including addressing the staff impact issues.

  If the parties cannot reach an agreement on the matter within that time period, it should immediately be referred for Third Party resolution in accordance with the agreed IR procedures.

  An amount of 50% of the total savings arising from the closure of a centre is to be allocated to the overall pool of savings to fund the Unions 50% of the overall cost of this pay award.

  5. Other Additional Efficiency Measures

  The parties should discuss any other additional efficiency measures that may be necessary to fund 50% of the cost of the recommended pay increases, from any existing listed proposals or other proposals, in accordance with the process set out by the Court previously in this regard.

  If the parties cannot reach an agreement on these additional efficiency measures within the specified period of time, it should be referred to the Monitoring Group for resolution in accordance with the agreed IR procedures.

  An amount of 50% of the total savings arising from the above measures are to be allocated to the pool of savings to fund the Unions 50% contribution to the overall cost of the above pay increases.

  Should circumstances arise where the agreed annualised savings from the additional efficiency measures achieve in excess of the Unions’ 50% funding requirement, the parties should discuss how these additional savings can be used to address staff aspirations in respect of future pay increases in the context of the company’s prevailing financial and trading circumstances.

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  6. Additional Efficiency Measures – AHCPS and CPSUDiscussions remain ongoing at present with the AHCPS and the CPSU. These discussions should be finalised within a maximum period of four weeks from the date of this recommendation, with the assistance of the Monitoring Group, if required by the parties.

  In the event that is not possible to conclude agreement directly between the parties regarding the additional efficiency measures and associated savings, or with the assistance of the Monitoring Group, the matter will be referred back to the Labour Court for a definitive recommendation in this regard.
  
  50% of the savings arising from the additional efficiency measures shall also be counted towards funding the two unions’ half of the cost of their portion of the above pay increases.

• 7. Addressing impact of proposed changes on specific Pensionable Allowances

  The Court recognises the impact which the introduction of the proposed changes may have on staff earnings through the loss of Night Duty and/or Shift Pensionable Allowances. To offset these the following shall apply;

  All Staff impacted by the loss of Night Duty and/or Shift Pensionable Allowances under this Recommendation, who have had such allowances for a minimum period of five years, shall be compensated in respect of the actual established loss. The formula for compensation reflects the nature of previous agreements between the parties in this company for compensation in respect of permanent and pensionable allowances and is reflective of the unique nature of such agreements within this company. In that context therefore the compensation should be calculated by reference to the prior three year average and by the payment of a once-off lump sum equal to 2.5 times the established annual gross loss. This payment will be pro-rata where an employee has less than 2.5 years remaining service to normal pension date. Additionally, staff who are within 3 years of normal pension age from the date of this recommendation shall have the benefit of their Pensionable Allowance(s) credited to their final pensionable salary.

  The parties should refer any issues arising in this regard to the Monitoring Group for consideration and determination.

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  The Court has been requested to address issues arising and to provide clarification in respect of the Voluntary Severance Scheme terms, as recommended under LCR21206. The Court addresses and clarifies matters as follows:

• i. 6 week’s reckonable pay per year of service, inclusive of statutory redundancy pay. This is subject to an overall maximum payment of 104 week’s reckonable pay in total.
  ii. This is also subject to a further overall maximum of the payment being no greater than the amount the employee would earn if he/she worked to their normal retirement age, provided that is less than 104 week’s pay.
  iii. Employees who are entitled to retire without actuarial reduction under the 2015 amendment to the An Post Superannuation Schemes are not eligible to avail of the Voluntary Severance Scheme terms. However, an ex-gratia payment of up to 6 months reckonable pay shall be paid by the company, but reducing by one (1) month per year from age 60 to age 66 years.
  iv. Employees who are entitled to retire but with an actuarial reduction applied in accordance with the 2015 amendment to the An Post Superannuation Schemes shall not be eligible to avail of the VS Scheme terms, but if they retire they will be paid an additional lump sum of up to a maximum of 18 months reckonable pay – on a downward sliding scale from age 60.
  v. The Company shall continue to reserve the right to refuse any application under the above Scheme.

The Court so recommends.

Signed on behalf of the Labour Court



Kevin Foley
JD______________________
5 September 2017Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to John Deegan, Court Secretary.