We have translated two articles about the recent postal workers’ strikes in Germany, one from a postal comrade with a more critical view on the unions and one from a left-wing trade unionist. We think that there are interesting parallels when we look at the current dispute at Royal Mail and the proposed agreement with the CWU leadership – a previous interview with a UK postal comrade can be found here.
* We have to discuss the role of ‘one-off payments’ in the current wage disputes. From the strikes in the NHS to the proposed wage agreement at Royal Mail, management tries to sweeten the deals with unconsolidated payments, while actual long-term wages increases remain below the rate of inflation – the current proposal for Royal Mail is 2% from April 2022, 6% from April 2023 and 2% from April 2024. In Germany these ‘one-off payments’ have been institutionalised by an agreement between government and trade unions which stipulates that the payments remain ‘tax free’. In the Royal Mail case the ‘one off payment’ is not tax free, and is conditional on whether or not the company turns a profit.
* In both companies the ‘one off payments’ deepen the division between workers who have been employed longer-term and have a perspective of staying in the job and the increasing number of those who have been hired short-term or just see the job as a shorter-term affair.
* While both companies have given big payouts to shareholders, both Royal Mail and Deutsche Post AG claim that they are ‘close to bankruptcy’. This is despite the corporation as a whole, in particular the international branches, raking in big profits, e.g. the Royal Mail’s UK-listed parent, International Distributions Services, has a £925 million bank facility and a £653 cash balance for the last financial year. Management tries to enforce low wage increases despite high profits through the threat of further outsourcing and splitting off of postal services.
* Both in the UK and Germany the wage disputes are not relating to the prominent issue of increased workloads and other material changes in day to day working life. It is likely that with more direct rank-and-file engagement these issues would come up and strengthen the struggle.
* Both the CWU and Ver.di are unions that organise workers in various large corporations, in Ver.di’s case even sectors, but the struggle remains isolated within the boundaries of the postal company. This clearly weakens the workers’ position. In this situation workers might reject a pay deal even though it is recommended by the union leadership, but without an independent workers’ coordination there is not enough power to turn the ‘rejection’ into an offensive struggle.
Report from a postal comrade
13th April 2023
The collective bargaining dispute at Deutsche Post is over. 61.7% of union members who took part in the ballot approved the compromise between the company and the service trade union Ver.di. It provides for a one-off payment of €1,020 for full-time employees in April 2023 and monthly unconsolidated inflation compensation payments of €180 each from May 2023 to March 2024. Part-time employees will receive pro rata contributions. A consolidated monthly pay increase of €340 per employee will not take effect until April 2024. The duration of the wage agreement is 24 months. Initially the union had demanded a wage increase of 15% for a 12 month contract period.
How did this result come about?
In recent years, Deutsche Post AG has been making increasingly negative headlines: mail was being delivered more and more irregularly, local post offices were being closed, letterboxes were dismantled, employee working conditions became worse and worse. Since I wrote my last report, the situation has become even worse for us.
Our districts have been redrawn (this is done regularly to adjust them to the volume of mail). Strangely enough, the districts are only getting bigger each time, our journeys longer and the volume of mail that we have to deliver is also growing. In addition, there was a so-called flexibilisation, which means that declared ‘flexi districts’ should now also help out in their neighbouring districts. The postmen and women should become more flexible and not only be able to work in one district, but in all districts of an area. “The postman who only ever works in one district is a thing of the past,” said one boss at a staff meeting. But the changeover failed miserably. We were often not trained at all in our new districts, even the ‘flexi districts’ were much too large and the tight staffing led to weeks of cancellations, which meant that the mail was only delivered irregularly in many districts. So resentment among the staff kept growing. The media reported on the worsening conditions, sometimes on a daily basis, but the company succinctly explained away all the difficulties by blaming the high levels of corona-related sickness absence among the employees.
Then came the collective bargaining round. Working conditions no longer featured. This is partly due to collective bargaining law, as German law places very tight limits on strikes. But in other areas, such as the hospital movement, Ver.di still managed to make working conditions an issue, which proved that it could very well be done!
In our collective bargaining round, though, it was only about money. At least Ver.di was forced to involve us in defining the demands, but if you think that there would have been union branch or workplace meetings where the demands would have been discussed, you are way off the mark. All Ver.di members received a multiple-choice questionnaire, that was it. We could tick whether a 10% wage increase was too much, just right or too little, or whether we would be prepared to go on strike to achieve the demands (no, yes, maybe). It looked like the responses of those workers who were contacted were pretty clear, because Ver.di then entered the wage dispute with a demand for a 15% wage increase over 12 months. This is the highest wage demand so far in the current collective bargaining rounds; despite galloping inflation, both IG Metall and IG BCE (chemical workers’ union) had previously made shamefully low demands and then, of course, ended up agreeing to minimal pay increases. But in return they were praised in the media as responsible social partners who had the big picture in mind and were not only defending egoistic trade union interests – like those radicals from the GdL (train drivers’ union) in previous years.
After management had not made any offer at all in the first round of negotiations, despite another round of record profits, the first warning strikes took place. However, we always had to ask our local Ver.di secretary whether we really were on strike, as we had heard in the press. I work in a part-time district and am employed at a so-called ‘transfer point’ with only a few colleagues. If the union official confirmed that we were on strike, we then drove to the central delivery base, where we signed up on the strike list, and then drove home again. So initially there was no activity by the ‘rank and file’ members. This was despite the fact that there was a great appetite to strike and widespread anger among the workforce. Unorganised colleagues, in terms of union membership, also went on strike, which meant financial losses for them, as they have no right to strike pay. There were also some workers who joined the union during the pay round. It was only on the fourth day of the warning strike that a demonstration was organised in the federal state capital. But again, we had to ask the day before if we were actually on strike. The answer was: “No, tomorrow only those who are going to the demonstration will strike… Oh, you want to come with us?”
After these warning strikes, the post office presented their first offer in the next round of negotiations. They offered a 24 month collective bargaining contract with one off payments to compensate for inflation in the first year and consolidated pay increases only in the second year. Ver.di indignantly rejected this offer and continued to demand a consolidated increase of 15% based on a 12 month contract – which would allow for an earlier chance to re-negotiate in case of further hikes in inflation. The union described the one off payments to compensate for inflation as a “sham”, because they are not included in the general pay, i.e. they are not taken into account for holiday and Christmas bonuses, for example, and they will not be used as a basis for negotiation in the next round of collective bargaining either – the increases discussed then will be based on a lower basis. For all these reasons, Ver.di’s bargaining committee initiated a ballot for an indefinite strike. The company responded with vicious threats. The company argued that since Deutsche Post AG’s record profits were largely earned abroad, we cannot demand so much here in Germany. If Ver.di continued to insist on the demands and went so far as to even go on strike, the post office would be forced to cancel the contract for letter delivery with the state and withdraw “from the area”. This would result in massive job cuts, and they would also have to outsource even larger parts of the workforce. These threats led to even more anger among the workers and the result of the ballot was clear: 85.9% of the workers voted in favour of an indefinite strike and thus clearly exceeded the required 75% ballot threshold.
On the same day that the strike ballot result was announced, the postal service invited Ver.di to new talks and presented the above-mentioned offer. It provided for only a slight increase in inflation compensation payments, but was otherwise essentially the same as the first offer. However, this time Ver.di recommended accepting the compromise because, according to them, it was 20% higher than the first offer. In its membership magazine, the union spoke of wage increases up to 16%. This is strange, as they had only asked for 15% – it seems very nice of the post office management to add something on top of that. In real terms, of course, the agreement’s increment is much lower because it runs for two years. If inflation remains as high as it is, it will hardly be enough to compensate for the devaluation of wages, especially when you consider that last year, in 2022, we received a pay ‘increase’ of only 2%. But despite this meagre result, considering the potential, it was accepted by Ver.di members in a second ballot with 61.7%. According to the Ver.di statutes, only 25% would have been necessary to accept.
However, it would also have been a big surprise if the result had been rejected. This happens extremely rarely, if at all. This is because many union members are rather passive, which is also encouraged by the structure of the organisation. They often follow the official guidelines unquestioningly. In addition, Ver.di also has an ‘ideological apparatus’ in the form of its own media and access to the established media. There they could propagate “their negotiating success”. Critics were deprived of this possibility. There were some (online) events and statements opposing the agreement, but these were almost only found on remote left-wing websites or were organised by the organisations of competing Trotskyist micro-organisations (such as the Netzwerk für eine kämpferische und demokratische Ver.di or the ‘Post-Aktionskomitee’). Many colleagues had not expected “such a good result”. Collective bargaining is seen by them as a mere ritual, which it largely is. One colleague said after the announcement of Ver.di’s 15% demand that he would bet that in the end it would be 7.5% more, after all ‘they always agree in the middle’. With such a detached view, the result is indeed a success. After the agreement, this colleague was looking forward to the one-off payment in April. That would help him a lot, he said.
However, even though the collective bargaining process as such was so disappointing, it did open up possibilities that point beyond the routine of everyday working life. Suddenly there was a very different type of discussion emerging among the colleagues. People who I didn’t know before and only met by chance when signing up on the strike list suddenly talked indignantly about the increased cost of living and how working conditions had become worse and worse over the past few years. A spontaneous feeling of togetherness and solidarity emerged. The warning strikes, the (few) demos and actions and especially the result of the first ballot also showed that much more would have been possible. Especially also in view of the fact that a collective bargaining round in the public sector was taking place at the same time, which large parts of the population felt sympathetic towards. But the union once again fulfilled its integrating function in class society. Its task is not to enforce the interests of the class, but to prevent open class struggles.
The one-off payments, which the federal government exempts from taxation up to an amount of 3,000 euros for both companies and employees, also has a pacifying function in the current collective bargaining rounds. Along with the other social policy measures such as energy price brakes, fuel rebates, increases in housing allowances, etc., this has certainly contributed to the fact that the feared ‘hot autumn’ has failed to materialise. Unlike in other countries, the German state is still able to buy class peace through such measures. However, if the capitalist crisis continues to come to a head, an intensification of the confrontations can be expected in this country as well. We should prepare ourselves for this.
————-
Collective bargaining round 2023: Despite high profits no inflation compensation for workers
Magazine Arbeiterpolitik
5th of April 2023
At the end of 2022, Ver.di withdrew from the collective wage agreements with Deutsche Post AG, which had been settled at the end of 2020 [1]. The union had to face several challenges.
At the time the 2020 deal seemed to be a pretty good one [2]. As there had been a strong increase in its parcel business during the pandemic, the Post AG had made exceptionally high profits. This allowed the company to raise wages slightly above the rate of inflation.
After one year, the two-year duration of the collective agreement turned out to be a disadvantage. From the beginning of 2022, the cost of living shot up to about 8% on an annual average, so that workers saw a significant decrease in their purchasing power. During the same period, the Post made record profits from quarter to quarter. The Group’s 2022 pre-tax profit of €8.4 billion exceeded the already exceptional 2021 figure of eight billion. Shareholder dividends rose 35% in 2022, up from over 30% in the previous year.
Despite the excellent economic figures, Deutsche Post AG was not prepared to top up the 2020 wage settlement. It only paid a ‘Corona bonus’ twice, on a voluntary basis, free of tax and social security contributions.
Working conditions even worsened in 2022 because the Post did not renew the contracts of a large number of colleagues who had been hired on a temporary basis in the early days of the pandemic.
Thousands of colleagues, including those who had been working for the post office for years, resigned from their jobs due to the increasingly unbearable workload. And of those who remained at the Post, almost a third took advantage of the possibility that has existed since 2018 to get more time off by foregoing wage increases (so-called ‘relief days’). Those workers who made use of all the opportunities provided by this collective agreement came to almost six weeks of additional rest time in 2022.
When the Post could no longer find enough workers for the upcoming Christmas season in autumn 2022, it could think of nothing else but to increase the pressure on the core workforce once again. Increased sick leave was the result, and delivery round cancellations were a daily occurrence. In many regions, citizens received mail only every four days.
Collective bargaining demands formulated with the participation of the members
As usual, the Ver.di negotiating department submitted a proposal for discussion to the union committees in preparation for the bargaining round. The consolidated pay demand was to be 10%, supplemented by a fixed one off payment. In doing so, the proposal tried to take advantage of the tax- and social security-free special inflation compensation payment (IA-SZ) of €3,000, which the German federal government had inscribed in income tax law at the suggestion of the trade union federation DGB [3].
The first debates in the union’s committees and the workplace union groups were restrained. Hardly anyone could imagine how such a high demand could be pushed through. In recent decades, they had only had to deal with single-digit demands[4].
With the members survey, the discussion became more lively. These surveys had been introduced after the defeat in 2015 in the struggle against the outsourcing of delivery. [5] They are carried out by the negotiating department before the collective bargaining rounds in order to determine the demands. A total of 43,139 colleagues, more than a third of the union members at the Post, took part in the debate. A demand of 10% was considered ‘much too low’ by 39% of those who voted and ‘rather too low’ by 26%. Two-thirds wanted to set a much higher pay demand than the one proposed by Ver.di’s negotiating department.
(…)
The bargaining committee decided to focus on a wage demand of 15%. It set up subsidiary demands for smaller groups such as the apprentices and the students as well as the civil servants.
In a large number of company meetings the demand was presented by the invited trade union officials. They received great support.
In the following weeks, the negotiating department involved the active members in the collective bargaining round for the first time. After each of the three bargaining rounds the results were reported on the internet immediately. The number of participants rose from about 1,000 at the first to over 3,000 at the third video conference. Questions could be asked in the chat and were partly answered. The committed colleagues felt well informed and finally taken into account. However, there were no open discussions.
Widespread warning strikes
The negotiating department leadership as well as the active members on the ground knew that they could only move the post office management to make a halfway reasonable offer if they would underline their demand with industrial action right from the beginning. Thus, the central industrial action committee called for the first warning strikes immediately before the second round of negotiations. The two-day stoppages involved almost all major letter and parcel delivery points, as well as some of the delivery staff.
Management was impressed, but did not make an offer in the second round of negotiations in mid-January. During talks, management sharpened its tone. It declared that it would at best talk about paying one off payments. However, it announced at the end of the two-day talks that it would make a proposal at the next meeting.
It was clear to the union that it would only get a halfway reasonable offer if it intensified industrial action. In two waves of two and three days, all colleagues were called to all-day warning strikes. Participation in the strikes was high, especially where there were well-established shop stewards. Workers took many pictures and videos during strike days. They strengthened the sense of self-worth and community. The pictures were spread via WhatsApp groups that had been set up ad hoc. In Berlin, workers from local parcel delivery centres visited neighbouring distribution centres. In some places, the barbecue was fired up and a hearty breakfast was organised in front of their own workplace. Many small video clips were produced and immediately made the rounds. They took up strike issues, attacked the greed of the postal management board and the shareholders, talked about the workload or reported about short demonstrations and other imaginative actions. Some contributions were humorous, others almost resembled small theatre plays. The colleagues were fed up. Thousands of workers joined the union during these days.
The highlight of the activities before the third round of negotiations were the regional rallies. In Berlin alone, more than 2,000 colleagues took part in the event on the Schillingbrücke near the Ver.di headquarters in cold weather. They came from Berlin, Brandenburg, Saxony, Saxony-Anhalt and Thuringia. The Ver.di chairperson Wernicke, the department chairperson Kocsis, several regional representatives of the union postal section, some works council members and finally the veteran Bsirske, who received the strongest applause for his speech, spoke in a good atmosphere and with uplifting music.
Negotiations fail
Following tough talks, in the third round of negotiations at the beginning of February, management made an offer to Ver.di. It proposed that workers would receive the tax free one-off payments of €3,000 spread over two years. In 2023, €150 per month and in 2024 €100 per month. On the 1st of April 2024, the bonus of €150 was to be consolidated into the general wage. In December 2024, i.e. only shortly before the start of the next round of collective bargaining, all employees would receive a further consolidated pay increase of €190.
It was not surprising that management would offer the €3,000 one off payments. But the fact that it was proposing fixed consolidated amounts (rather than percentage increases) was something few had expected. This time management wanted to raise the lower incomes much more than the higher ones.
The offer meant a pay loss in real terms for most workers for 2023 and certainly for all in 2024, assuming that the inflation rate will hardly decrease in the coming year.
The Ver.di negotiating commission rejected the offer after a short discussion, and the group bargaining commission followed unanimously. Ver.di Bund then decided to initiate a ballot for an indefinite strike.
Ballot and new round of negotiations
The ballot took place between the 20th of February and the 8th of March. 85.9% of the members who cast their vote rejected management’s offer and declared their intention to actively participate in indefinite strike action. The result had not yet been made public when Ver.di received a letter from Post AG management asking them to return to the negotiating table if more than 75% of union members rejected management’s offer.
The Post management declared its willingness to negotiate on the very day of its annual press conference. There, it again presented growing turnover figures and an increase in profit for the 2022 financial year. It did not want to let the day, which was a good one for the management board and the shareholders, be clouded by constant questions about the strike and its consequences for the company.
The Post management assumed that it would have to prepare for a longer-term dispute after the surprisingly strong participation of members in the warning strikes. The ability to plan counter-measures was made much more difficult by the tactics announced by Ver.di, which wanted to strike only on a daily basis. A cat and mouse game was looming, with escalating effects. The Post also knew that after the good economic results of the last few years, the public would stand behind the workers. Criticism in recent months of the miserable delivery performance, especially in the letter sector, had already done considerable damage to its public image. Many major customers also signalled that they would switch to competitors in the event of an indefinite strike. The Post was threatened with the permanent termination of lucrative business relations.
The result of the negotiations and evaluation of the result
After tough negotiations, the post office management made an offer in the middle of the night of the 10th of March.
The offer was accepted by the Ver.di negotiating committee and recommended to the members the following day. Compared to the offer made in February, it provided for a pay increase of about 25% (which includes the one-off payments and calculated over two years).
(…)
During the 24 month period of the collective agreement, each full-time employee will receive €6060 more income regardless of his or her classification in the pay scales, whereby €3,000 will not be consolidated (only one off payments), but the remaining €3060 will.
The result of the negotiations breaks with the logic of all previous wage bargaining rounds. In previous rounds, the wage increase was achieved in such a way that the ratio (or wage division) of wage groups and pay grades to each other remained the same in percentage terms.
(…)
Due to the consolidated increase by a uniform € 340, the percentage wage increases for employees are extremely different. The lower wage groups benefit most, while the middle and upper wage groups are disadvantaged.
According to the Post management, the average wage increase in April 2024 is 11.5% [7]. However, the figure is glossed over because it leaves the first three months out of the equation when there is no pay increase. If these are included in the calculation, the wage increase is only 8.6% over the entire term of the collective agreement. This results in an annual wage increase of 4.3%.
At the end of 2024, the one off payments will have been used up. Assuming an inflation rate of 8%, the average employee will be left without inflation compensation at the end of 2024. Since they already had to accept real wage losses in 2022, their real income has been reduced by about 13% in only three years. With their current salary of 3,000 €, at the end of 2024 they will be short about 400 € before tax compared to January 2022, which means that there will be about 200 € a month less in their household budget.
For 2024, the lowest wage group sees an increase of 12.1%; the highest wage group sees a 4.5% increase. Converted to two years, this means an increase of 6.05% for entry-level wages and 2.25% for the highest collectively agreed wages. All others lie between the ranges.
The only beneficiaries of the fixed pay increases are apprentices and students. Their percentage income increases are above inflation. This is simply because their previous income was significantly lower than that of the rest of the workforce.
The losers of the collective bargaining round are also the social security funds. If the employers’ contributions are included, they lose €1,120 per employee. If you extrapolate that to 120,000 full-time employees at the Post AG, you come to 134.4 million euros less in social security contributions a year. Since other unions have also agreed to pay the tax free one-off payments, this adds up to billions. The resulting holes in the social security funds will have to be filled by workers in the coming years, as the state will try to increase their contributions. Those who celebrate the tax free one off payments as a success, as the DGB leadership [8] does, undermine the foundation on which we stand.
Result of the second ballot
In the final ballot, 61.7% of union members voted to accept the offer.
Approval is likely to have been particularly high among those who have not been employed by the Post for long. For them, the initial and relatively high one off monthly payments were attractive. In particular, the expected first payment of €1020 in April 2023 for the first four months of the year was tempting. It can be used to pay some bills and there is also something left over for the children’s clothes. Moreover, the Christmas bonus will lead to a further increase in their monthly salaries – the new agreement includes new starters in the Christmas bonus, previously you had to work for the Post for at least two years to get it .
However, those who have been working at the Post for a long time and are not thinking about quitting their jobs any time soon were less satisfied with the result. What mattered to them was how the outcome would affect their monthly salary in the long run. Despite the complexity of the deal, which made it extremely difficult to calculate the effect on their own income situation, many amongst this group of workers quickly realised that they would have to accept real wage losses by the end of 2024.
In the internal union discussions, as well as in the debates among the active colleagues, the fact that the negotiation result did not correspond to any of the initial demands caused indignation in the run-up to the second ballot. There was neither a linear wage increase for all, nor an increase in consolidated income for 2023, nor a limitation of the duration of the agreement to one year. Instead, there was a collectively agreed wage increase for 2024, but the demand for 2024 had not been part of the original membership consultation at the end of 2022. They had neither discussed nor set a wage demand for 2024. This raised the question among them: “what is the point of consulting workers before the bargaining rounds if, in the end, the employer alone determines the structure of the outcome?”
The complete disregard for the members’ discussion will perhaps cause Ver.di even more trouble in the near future than the meagre increase in collective wages.
The fact that the dissatisfaction of part of the membership with the agreement has not yet subsided was shown at the last Ver.di video conference on the outcome of the ballot. There were a lot of negative statements in the chat, which visibly made the union department’s executive committee nervous. This is because collective bargaining on the outsourcing of transport and delivery services is already scheduled for the middle of the year, and the agreement on the exclusion of compulsory redundancies expires at the end of the year. If the frustration about the collective agreement turns into despair, it will be difficult to mobilise the colleagues again.
However, no significant opposition to the agreement has emerged. In some branches at least, some shop stewards did speak
out and demanded that the agreement be rejected [9]. Whether they have greater support among the workforce cannot be assessed at the moment.
H.B.
[1] These are the wage categories.
[2] Cf. Arpo 1’21, p. 13f.
Bester Tarifabschluss bei der Post seit Jahren – Arbeiterpolitik
[3] The DGB originally wanted the tax free one off payments to be paid in addition to an increase in collectively agreed salaries, not instead of.
[4] However, this is not the first time that postal union members have decided on a double-digit wage demand. In November 1973, the predecessor organisation of Ver.di Section E, the German Postal Workers’ Union (DPG), together with the ÖTV, had set a wage demand of 15%. After several days of strikes, a settlement of 11% was reached.
[5] Cf. Arpo 2/3’18, p. 19f.
Unzufriedenheit unter den Postbeschäftigten – Arbeiterpolitik
[6] Since the organisational reform of 2021, Ver.di Department 10 (postal services, forwarding and logistics) is called Department E. FB 10 had fought tooth and nail against the amalgamation with the union department responsible for the retail sector and finally prevailed.
[7] This is roughly equivalent to the income of a postman in wage group 3, pay grade 7, which requires at least fourteen years of employment with the postal service.
[8] Allegedly ver.di has spoken out against this.
[9] Cf. Network of postal workers’ shop-stewards: NO to the new offer! – YES to a strong ver.di! – Networking for militant trade unions.
