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Posti’s objectives – solutions for reducing rigidity

09.11.2015

Posti believes that increasing the flexibility of postal work will improve customer service and protect jobs. According to Yrjö Eskola, Vice President, Operations, the existing rigidity in the terms of employment is a leftover from the monopoly era.

The Finnish postal industry, like the communication sector as a whole, is undergoing a dramatic structural transformation. Communications are becoming digital and postal delivery volumes are falling at an accelerating rate. Competition is also increasing, as the new Postal Act gives regional newspapers the opportunity to deliver letters starting from next year.

"The liberalization of the postal industry will completely transform the Finnish postal market in the coming years, and Posti must adapt to free competition," says Yrjö Eskola, Vice President, Operations, at Posti.

These factors have created a new starting point for the negotiations that began this fall between Service Sector Employers PALTA and the Finnish Post and Logistics Union PAU on a new collective agreement for the postal industry. Posti's previous collective agreement was built during a time when most of the business had a monopoly position.

Posti has four key objectives

Posti has four key objectives in the negotiations on the new collective agreement:

  1. The Uusi Polku support program to replace the existing change security agreement
  2. More flexibility in shift planning
  3. A simpler pay system
  4. The option of using outsourcing during peak periods and using subcontracting in sparsely populated areas

"Our objective is primarily to preserve the existing jobs as well as create new jobs," Eskola says. "We do not want to remove change security from our personnel. Instead, we want to develop it in a way that allows us to genuinely help our personnel find new work," he adds.

Under its change security arrangement, Posti has paid one-time compensation payments exceeding the legally required level totaling EUR 44 million in 2011-2015. This amount comprised additional one-time compensation payments that represent a level that is much too expensive for any company in the prevailing economic situation. Posti wants to further develop the Uusi Polku support program that was introduced last year. The program has proven to be a more effective solution for helping personnel find new work, become entrepreneurs, or take up studies. The support program also includes change security in the form of monetary compensation (equal to 3-6 months of pay).

"Our objective in the negotiations is to reach an agreement on increasing flexibility in postal work. This will enable us to adapt to customer needs and maintain our competitiveness. Providing meal services, home delivery services and other delivery services, for example, requires increased flexibility in how delivery work is managed.

Rectifying delivery disruptions and increasing operational flexibility is currently complicated by the collective agreement's very rigid provisions concerning shift planning. Shifts are set as much as six weeks in advance, which makes it difficult to adapt resources in response to peak periods and sick leave. More flexibility is also required with respect to the salary scheme, which currently comprises more than 500 different salary categories.

Claims of 30% pay cuts are not true

"I want to make one thing clear. Posti is not demanding a 30% salary cut for delivery personnel, as claimed by PAU.  We merely want to adjust the level of our night shift allowance," Eskola says.

The objective is to lower the night shift allowance for delivery work to the same level as the companies responsible for the delivery of regional newspapers, which are governed by a collective agreement with a different labor union, Team. The current collective agreements cause unequal grounds for the different companies providing delivery services. Basic wages are the same for all employers, but the night shift allowance at Posti is many times larger.

In order to maintain the required service level and ensure cost-effectiveness, it is also sensible for Posti to increase the use of subcontracting, particularly in remote areas. When used properly, subcontracting is cost-effective and flexible. In sparsely populated areas, postal services could be provided partly by the entrepreneur who transports children to school, and partly by the local convenience store. This would ensure the continued nationwide provision of Posti's services while also strengthening entrepreneurship in rural areas. 

As delivery volumes decline sharply, there is increasing pressure to make jobs part-time. Recognizing this, Posti wants to continue to offer full-time work by combining shifts between various duties in mail communications and logistics. This also provides opportunities for employees to further develop their competence.

Posti hopes that the collective bargaining in the industry can be completed as soon as possible, and that the new and more flexible collective agreement will guarantee industrial peace and the chance to focus on serving customers.