By concluding a collective agreement with the new postal companies Sandd and Selekt Mail, the Allied Unions and Abvakabo FNV trade unions believe that the conditions necessary for swiftly deregulating the postal services market have been met. The Dutch cabinet and House of Representatives are in agreement. With effect from 1 April 2009, the postal services market is now fully deregulated. This development is set to open the Dutch market to European competition for a global market.
Background
While the postal services market must be deregulated by 1 January 2011, the Dutch cabinet hopes to bring this date forward if there are sufficient prospects for good terms and conditions of employment being established at the new postal companies Sandd and Selekt Mail. According to Labour Party (Partij van de Arbeid, PvdA) representatives in the House of Representatives (Tweede Kamer der Staten-Generaal), these conditions have been met now that the two trade unions – the Allied Unions (FNV Bondgenoten) and Abvakabo FNV, affiliated to the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) – have reached an agreement with the two companies.
The State Secretary of Economic Affairs, Frans Heemskerk, indicated in 2008 that he would only move for complete deregulation of the postal services market if the social partners could reach agreement on working on the basis of an employment contract as opposed to a freelance agreement (NL0807029I). The two biggest government parties – the Christian Democratic Appeal (Christen Democratisch Appèl, CDA) and the PvdA – disagreed previously about whether to wait for a collective agreement between the social partners for the new companies. In the absence of an agreement, PvdA at least wanted minimum terms and conditions of employment to be imposed.
Sandd and Selekt Mail reach own collective agreement
Sandd and Selekt Mail believe that the agreements reached with the trade unions on the terms and conditions of employment would only apply if the postal services market was deregulated before 1 April 2009. The companies concluded a collective agreement with the trade unions in November 2008. Postal delivery personnel from both companies previously worked on the basis of freelance contracts. The market for postal items weighing less than 50 grammes will now be open to Sandd and Selekt Mail with effect from 1 April 2009. This marks the complete deregulation of the postal services market. The cabinet reached this decision on 20 February 2009.
The trade unions are satisfied about the firm condition that postal delivery personnel must receive better pay. While the Abvakabo FNV union has never supported deregulation, it concedes that if such a development cannot be avoided it must at least be done properly. The trade unions want to set a bottom line in terms of employment conditions. Sandd and Selekt Mail, in turn, assert that they could only offer these employment conditions on gaining access to the market across the board. Their market share was too limited for profitable operations.
The State Secretary of Economic Affairs, Mr Heemskerk, expects the new companies to extend their focus beyond private individuals, by seeking to serve the business market. Companies, associations, foundations and bulk mail producers account for 92% of all the letters sent. Increased competition in this postal flow is intended to lead to better prices and more customised services.
Prerequisite of comparable employment conditions
TNT Post’s nationally active competitors, Sandd and Selekt Mail, will offer 80% of their employees permanent employment contracts within three-and-a-half years. The Postal Act states that they can be obliged to provide all employees with a permanent employment contract if they fail to honour the agreements reached. In terms of employment conditions, TNT offers its postal workers a rate of €23 an hour. In addition, TNT workers receive holiday allowance, continued earnings during illness and a travel allowance. By contrast, Sandd and Selekt Mail paid workers on a ‘piece rate’ basis, and their employees receive about €7 an hour. As long as the difference in hourly rates remained so substantial, the new providers were barred from operating freely in the market – that is, in the market for postal items weighing less than 50 grams. Competition at the expense of the workers was ruled out by the country’s politicians as well as by the former monopolist TNT.
Unbridled competition also means international competition
In becoming fully deregulated, the Dutch postal services market is following the trend already underway in half of Europe’s postal services market which has been deregulated. This comes six months before the EU deadline for deregulation of the whole postal services market. Such a development offers new growth opportunities. Cooperation between European giants such as the UK-based Royal Mail and a Dutch partner are not excluded.
For its part, TNT Post has resented the domestic competition, because these competitors are now party in a European competition for a global market. Selekt Mail is a subsidiary, daughter company of the German postal services provider Deutsche Post, which also owns DHL. The latter competes against TNT Express, particularly in the growth market of Asia. By challenging TNT’s hold over the domestic market, Deutsche Post can weaken TNT’s opportunities to achieve growth abroad. It is not so much a question of Selekt Mail gaining ground in the shrinking Dutch market, but more a case of ‘tightening the screws’ on TNT. According to TNT, Dutch postal delivery workers are having to bear the cost arising from the ambitions of Deutsche Post. TNT has a subsidiary called Netwerk VSP, which also works on the basis of a piece rate system like that of Sandd and Selektmail. This is possible because Netwerk VSP, like Sandd and Selektmail, restricts itself to a limited part of the postal services market – namely, to bulk mail above 50 grammes; these activities have already been deregulated. Thus, it would not be unexpected if TNT deployed its subsidiary more aggressively in the future.
Marianne Grünell, Hugo Sinzheimer Institute (HSI)