Postal liberalisation approved amid bitter wage battle

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A vote in the European Parliament paving the way for unbridled competition among postal operators has been welcomed by many as a key step in improving the quality and efficiency of mail services across Europe. But others fear the new law will lead to massive job cuts and a deterioration of working conditions.

Despite continued resistance from Green and leftist deputies, who fear that full liberalisation could undermine member states’ ability to provide a universal service, the draft Directive on opening up EU members’ postal markets sailed through Parliament unchanged on 31 January 2008, after ministers, last October, approved practically all of the MEPs’ first-reading amendments (EURACTIV 02/10/07).

A key element in convincing MEPs was the incorporation of provisions aimed at ensuring that increased competition does not end in a race to the bottom to win postal business, through social dumping and a degradation of working conditions. 

The draft law now states that basic labour conditions applicable in a member state, such as minimum pay and holidays or the right to strike, will not affected by the directive. 

The move comes as Germany and the Netherlands – ironically two countries that fought side-by-side to push through speedier liberalisation of European postal markets – engage in a battle over German social protection laws, causing the Netherlands to delay its planned 1 January 2008 liberalisation (EURACTIV 7/12/07). 

The dispute surrounds Dutch-based post and logistics giant TNT’s refusal to comply with a €9.80 per hour minimum postal wage introduced by the German government in December 2007, one month ahead of the liberalisation of the German postal market. 

TNT, which currently pays its German workers €7.50 an hour, has lodged a lawsuit with a Berlin commercial court in a bid to have its alternative minimum wage declared valid. The Dutch company argues that the German move is an “abusive” attempt to shield the formerly state-owned mail monopoly Deutsche Post from competition as no other operator can afford to have the minimum wage set at that level. 

The debate sheds some light on the difficulties that could lie ahead in terms of creating a level playing field and ensuring fair competition while guaranteeing workers’ rights, as member states start to implement the EU’s third postal directive. 

"This dispute is of fundamental importance," said the general secretary of the international trade union body UNI, Philip Jennings. "If the big postal groups don't abide by the law [on social protection] after liberalisation of the postal market in the EU then a precedent will be set that could be followed in other states." 

However, Francis Mary, director of France's La Poste Brussels office told EURACTIV he "regretted that the debate on social clauses is being distorted". "The original aim of these mechanisms was not at all protectionist," he stressed, adding: "We need a social framework to avoid competition taking place purely on the basis of salary dumping." 

He thus particularly welcomed the inclusion of social provisions in the directive, adding that the final text, "compared to the Commission's initial proposal, is a very positive compromise". "Earlier, people were still talking about reducing the scope of the Universal Service Obligation or of not having any mechanisms in place for financing it […] These risks have been laid aside by the current text," he said. 

The Postal Users Group (PUG), an alliance of Europe's major users of postal services, said the directive would bring benefits to users in terms of choice and prices. Chairman Per Mortensen added: "The challenge for the 27 Member States is to ensure they successfully adopt the directive's legal framework to local conditions in ways that truly benefit postal users thereby ensuring letter post's future. Therefore, PUG will follow the transposition of the directive into national law very closely".

The Free and Fair Post Initiative (FFPI) agreed that the directive would improve choice and quality of service for users and consumers, and will encourage innovation and dynamism in the sector. However, FFPI President Philippe Bodson warned of "backstage protectionist manoeuvres", saying: "Today's vote is historical, but is not the end of the story. The success of postal liberalisation will in fact depend on how member states will implement the Directive. Backstage manoeuvres to introduce barriers and protectionist rules that risk hampering access to new entrants in the market have to be avoided." The FFPI added that it would continue to work to ensure that "potential cases of delayed or partial market opening and regulatory requirements set up by member states that create significant barriers to entry are exposed". 

The European Parliament's Socialist group also welcomed Parliament's vote, saying the directive now contains the necessary guarantees on the universal service and its financing, and on the protection of postal workers and their employment conditions. 

But Green MEPs lashed out at the directive, saying it will undermine the universal provision of postal services, particularly hitting those in rural, peripheral or mountainous regions "whose access to other modes of communication is already reduced in many cases". Austrian Green MEP Eva Lichtenberger said: "The proposal fails to provide adequate guarantees for financing the provision of a universal service, which would mean private operators can reap the benefits of profitable routes, leaving the taxpayer ultimately responsible if the provision of a universal service is to continue." 

The group also highlighted its concern that "employment and social standards for those working in the sector would deteriorate under the current proposals. Previous liberalisations […] have led to employment conditions being frittered away. Without sufficient guarantees, this risks occurring with this liberalisation," it commented. 

The communist-led GUE-NGL group agreed that the directive was a "step backwards for workers and their rights". "My group fears that this directive will jeopardise guarantees and lead to bad working conditions and even worse labour agreements. We remain firmly against this liberalisation, which is bad for workers and bad for consumers," said Dutch MEP Erik Meijer. "A dark area remains concerning the social consequences on workers as well as on consumers of this blatant liberal act," added Cypriot MEP Kyriacos Triantaphyllides. 

In October 2006, the Commission presented plans to dissolve lingering monopolies in the European mail market by 1 January 2009, saying increased competition would lead to cheaper, faster and more innovative service provision.

The central element of the proposal was the elimination of the so-called "reserved area", which gives incumbents the right to maintain a lucrative monopoly over the delivery of letters weighing less than 50 grammes in return for providing an affordable, five-days-per-week delivery service even to citizens in remote areas – the so-called "Universal Service Obligation".

Countries where liberalisation is already underway or finalised, including the UK, Sweden, the Netherlands and Germany, staunchly defended the Commission's plans in the hope of opening up new markets for their national operators in neighbouring countries. 

But postal workers and numerous national operators rejected the timeline proposed by the Commission, saying it would destroy public operators and result in large job losses and weaker customer service (EURACTIV 07/06/07). 

Lengthy debates in Parliament resulted in a demand for the plans to be delayed at least until 31 December 2010 – a request that was subsequently backed by member states under the Portuguese Presidency (EURACTIV 02/10/07). 

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