Talks on a new business reorganisation agreement at An Post, which could see basic pay rise by more than 20 per cent in return for annualised hours, are at an advanced stage. An employee share option plan for the company should also be in place by 2003. These changes could reduce An Post's operating costs from £127 million (€161 million) to £100 million a year.

The general secretary of the Communication Workers' Union, Mr Con Scanlon, told delegates at the annual conference in Ennis yesterday that there would be a period of "intense consultation" and a ballot on the reorganisation proposals shortly. He declined to comment on how much the company's postal workers are seeking for the annualised hours agreement but confirmed that the new basic pay rate must compensate for lost overtime. This accounts for over 20 per cent of current earnings.

The first reorganisation agreement is likely to be reached in the Dublin Mail Centre, where more than 400 of the company's 8,500 employees are based. Basic pay here ranges from £304 for a sorter to £358 for a clerk.