Ten questions about Posti’s terms of employment: Why must Posti renew its operations?

Posti is aiming to become even more agile in order to meet the expectations of consumers and business customers and hold its own in the face of global competition, writes Turkka Kuusisto, SVP of Posti’s Parcel and e-Commerce business.

In the last few weeks, the media has presented various allegations concerning the changes to Posti’s terms of employment.  I feel that I should reiterate why Posti needs to renew its operations and what the changes to the terms of employment actually mean in the context of parcel services.

1. Customer needs are changing rapidly, and expectations concerning the speed and flexibility of deliveries have increased.

Consumer behavior has changed significantly. Online shopping is becoming increasingly common, and expectations concerning the speed and flexibility of deliveries have risen considerably. There seems to be no stopping this development. This universal phenomenon is also reflected in Finnish consumer behavior. The Asian, Central European and North American online stores used by Finnish consumers, for example, set their own requirements on delivery companies. The operators expect us to constantly improve the flexibility of our services.

2. We aim to increase the flexibility of our daily operations by implementing changes to the collective agreement on parcel sorting.

For Posti’s current and future customers – both consumers and business customers – the changes to the collective agreement mean that we will be able to offer more flexible services that better meet rapidly changing customer needs.

E-commerce operates 24/7/365. There are enormous fluctuations in the volumes of parcels to be sorted between peak seasons, weekdays and even different times of the day. In practice, increasing the flexibility of our operations means being able to use various shift arrangements to respond to the fluctuations in demand and to serve our customers on evenings and weekends as well.

3. For our employees, the changes mean retaining jobs and creating new ones.

Ensuring Posti’s competitiveness ensures sufficient work for Posti’s employees. As e-commerce gains more and more ground, it also creates opportunities for new jobs.

4. More than a two-year transition for the payroll of parcel sorting employees: the salaries will not drop.

With the changes to the collective agreement, there has been a great deal of discussion on the salaries of parcel sorting employees. We have reported an arrangement that guarantees that the total salary of our approximately 700 parcel sorting employees will remain unchanged until January 31, 2022. There will be no decreases in the personal salary of any person involved in these changes during the transition period.

The negotiations between the Finnish Media Federation and the Industrial Union concerning the terms of employment for the sorting personnel in the Parcel and e-Commerce business will begin November 1, 2019. The Finnish Post and Logistics Union PAU will not be involved as a contracting party. An official from the Industrial Union, elected by the personnel, will supervise employees’ interests as the changes to the collective agreement are implemented.

5. Employees will have the opportunity to earn a salary higher than their current one through production bonuses.  

Starting from April 1, 2020, our direct employees will also have the opportunity to earn a salary higher than their current one through production bonuses. This means that employees will be able to increase their salaries through their own work.
In the future, employees’ salaries will continue to be based partially on a salary table and partially on accrual. We believe that the rising figures in e-commerce and parcels mean that our ability to pay competitive wages will not decline in the future.  

6. The average salary of parcel sorting employees is EUR 2,407  

Various estimates of the average salaries of parcel sorting employees have been presented in the media. At Posti, 98% of sorting personnel receive a salary that is higher than average, contrary to what has been reported by the media. The monthly average salary of employees is EUR 2,407.28 and average earnings (including bonuses) is EUR 2,688.45.

7. Posti is currently using 11 different collective agreements for various operations.

We want to comply with the same terms of employment as other employers and employees in our industry. Transporters providing parcel services, for example, follow the collective agreement of the Transport Workers’ Union AKT. The transport operations in Posti’s parcel business also follow the collective agreement of the AKT. Of the total personnel, 10% are covered by the collective agreement of the AKT.

Since 2017, the collective agreement of the Industrial Union, commonly used by other companies in the delivery industry, has been followed in Posti’s early-morning delivery. By using the industry’s common terms of employment in early-morning delivery, Posti has been able to engage in equal competition, thus gaining new customer contracts and work for Posti’s employees. Before making the change, Posti employed 1,900 early-morning deliverers. In January 2020, we will be employing 3,100 early-morning deliverers.

In conclusion, Posti has not opted for collective agreements that ensure lower salaries than those of our competitors; we have chosen each sector’s generally used collective agreements that are best suited for the work in question.

It is important to remember that Posti follows 11 different collective agreement for different tasks. PAU’s collective agreement is not the only agreement used at Posti. The negotiations between the Finnish Media Federation and the Industrial Union concerning the terms of employment for the sorting personnel in Posti’s Parcel and e-Commerce business will begin November 1, 2019.

8. The Industrial Union’s terms of employment are suited for parcel sorting.

The scope of application in PAU’s collective agreements and the Industrial Union are identical, and both enable mechanical parcel sorting.

Jakeluyhtiö Suomi is an example of a company offering parcel delivery services and using the Delivery collective agreement.

9. Posti’s future growth lies in parcels and logistics.  

Posti is facing a historic transformation where letter volumes are in an accelerating downtrend – in the first quarter of 2019, the decrease amounted to 14% – and the volumes of parcels are increasing at an unprecedented rate. Parcels, e-commerce and logistics already amount to over half of Posti’s total net sales. Posti’s future and new jobs lie in parcel and logistics services.

10. The negotiations over traditional postal services are currently underway between PALTA and PAU. 

Service Sector Employers PALTA and PAU will continue their negotiations concerning the collective agreement of the mail communications and logistics industry. Parcel sorting is not included in these negotiations.

Posti’s objective in the negotiations is to find a solution that responds to the company’s needs in the competitive delivery industry. The volumes of paper mail are decreasing at a record-high rate and, with the liberalization of regulations in postal services, Posti now has 16 competitors in mail and publication delivery, with each of them following a different collective agreement than Posti.