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Release Date:
Release ID: 4443

TNT Post: Gradual introduction of minimum wage feasible and necessary

Amsterdam, 9 December 2009 – TNT Post has taken note of the announcement by Sandd and DHL Global Mail that they will be requesting summary proceedings to challenge the “Temporary decree on postal contract of employment”. TNT Post is urging the Dutch government not to relax the minimum social requirements agreed by all players when the Dutch postal market was liberalised.

Price level
The Dutch postal market has turned into a tender market since it was fully opened to competition, with the delivery of large volumes of mail being put out to tender, not only by businesses, but also by the government and public organisations. TNT Post has determined that for all calls for tenders put out in 2009, price was for over 60% decisive in who would be awarded the contract, with criteria such as quality and sustainability being secondary considerations.

According to Sandd and DHL Global Mail, the present price level makes the gradual introduction of contracts of employment that ensure a minimum wage impossible. In recent calls for tender, including for the main governmental postal volumes, Sandd offered rates of less than 12 euro cents per item. DHL Global Mail won the right to deliver TV guides for broadcasters Veronica, AVRO, KRO and NCRV by offering a rate of less than 13 euro cents. In recent months, Sandd and DHL Global Mail have taken some 150 million mail items away from TNT Post in total.

Restrictions under competition law prevent TNT Post from offering rates at this level. Furthermore, TNT Post feels that such a price level is not desirable because this blocks the way to fair conditions of employment. Accordingly, TNT Post emphatically rejects allegations that the company is responsible for the current price war raging in the Dutch postal market. TNT Post’s subsidiary Netwerk VSP is not taking part in this price war either; it has recently increased its rates in order to be able to gradually introduce contracts of employment that ensure a minimum wage.

Competing on the basis of conditions of employment
Liberalisation has a major impact on employment at TNT Post. The Dutch postal company must be realigned to deal with the new situation. In a shrinking market, this has far-reaching consequences for the terms and conditions of employment and the jobs of TNT Post employees.

Harry Koorstra, Group Managing Director TNT Post: “It is remarkable that the other postal companies can offer such low rates. It would be no problem for them to attract volumes while offering higher rates and, at the same time, meet the requirements set by law concerning terms and conditions of employment. This would give our competitors as well as TNT Post a fair chance to adapt to the new market situation.”

Well considered decision
The “Temporary decree on postal contract of employment” is carefully drafted legislation that sets out a step-by-step schedule for the gradual introduction of the minimum wage in the Dutch postal market. When it was agreed to open up the postal market fully to competition, the government, trade unions and the postal sector all agreed that the current practice of paying deliverers on a piece-rate basis was socially unacceptable and needed to be phased out.

Under the “Temporary decree on postal contract of employment” the aim is to eventually have 80% of mail deliverers working under a fair contract of employment. This target is to be achieved using very reasonable interim steps, having 10% of the mail deliverers working at contracted minimum wage by April 2010, 30% by April 2011, 60% by April 2012, and finally 80% by October 2012.

At present, some 100,000 people work in the Dutch postal market, with 30 to 40% of these being paid on a piece-rate basis. These people do not qualify for social security, pension schemes, holiday pay or paid sick leave.

TNT Post calls on the government to stand by its decision to introduce contracts of employment that ensure payment of the minimum wage and to ensure that this decree is properly enforced.

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