TNT and Unions Reach Agreement in Principle

TNT and the unions ABVAKABO FNV, BVPP, CNV Publieke Zaak and VPP have reached an in-principle agreement on new collective labor agreements (CLAs) for all TNT Post operations staff in the Netherlands. These agreements will play a key role in keeping TNT well positioned in a shrinking postal market, the company said. The unions and TNT have consciously opted for job retention in combination with revised employment conditions. The unions will present the CLAs to their members.

The Dutch Cabinet's decision to liberalize the Dutch postal market on April 1, 2009 has made wage cost reduction even more essential. The market is being opened up in tough economic times in which mail volumes are declining more rapidly than ever before (a 5%-6% drop expected in 2009), partly due to growing substitution by digital alternatives. The CLAs covered by today's in-principle agreement call on cooperation from employees to help protect as many jobs as possible at TNT Post.

Alongside the new CLAs at TNT Post, the Dutch Cabinet must ensure that fair employment conditions among Dutch postal market competitors is met. There is insufficient certainty on this matter at present, said TNT. The sector CLA has yet to be finalized by the unions and postal operators, as has the Administrative Decree under which the government can demand parties to pay at a minimum wage.

The new CLAs, which will save €125 million a year, form an important part of the previously announced Master plan targeting annual TNT Post savings of €395 million until the end of 2015. In addition to the existing Master plan mobility provisions, TNT expects to make a provision for compensatory costs of around €275 million for the employment conditions package, including the transitional arrangements and mobility budgets. Besides reduced employment conditions, the unions and TNT have agreed a job guarantee under which no compulsory redundancies will be made during reorganizations for the first three years. During the three subsequent years this will depend on a number of developments in the market.

The new collective labor agreements comprise a separate Operations CLA for new and existing operations staff at TNT Post, a new CLA for mail deliverers, and a new CLA for Saturday delivery staff, each with a term of three years (April 1, 2009 to April 1, 2012). Arrangements still need to be made for a one-year CLA for employees at TNT's other Dutch business units.

The Operations CLA will mean reduced income for staff. A well-balanced package of transitional arrangements has been agreed for existing employees. Staff covered by this CLA will see their gross income fall by around 15%. TNT will offset this loss of income by paying up to 95% of the current income of all those involved during a period determined by age and number of years of service. For example employees aged 50 and over will receive up to 95% compensation until the first possible date on which they can leave the company. A structural wage increase of 1% has been agreed from April 1, 2010 and April 1, 2011. TNT Post is encouraging operations employees to look for work outside the company by offering part-time and full-time staff a mobility budget for the next five years.

Employees joining the company from 1 April 2009 will fall under an Operations CLA at a substantially lower level.

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