Thousands of An Post workers have been told the company cannot afford to give them the pay rises due under the Sustaining Progress national agreement.
The announcement was made last night in a meeting of the Joint Conciliation Council with the unions. The first phase of the agreement, a three per cent pay rise, was due to be paid last November, but the company was unable to muster the necessary funding.
A spokeswoman for An Post told ireland.comthis situation, while regrettable, was unavoidable in the context of the company's ongoing financial crisis.
The company has forecast losses of €46.4 million for 2003. Chief executive Mr Donal Curtin said last week it is hoped to reduce this to €31 million in 2004, but this could only be achieved through a Strategic Plan that has yet to be agreed with the unions.
He said 1,350 people working in the beleaguered State-owned company would have to be made redundant and all non-core subsidiaries needed to be sold in an drastic bid to save money.
He also said the company has been forced to use overdraft facilities and the proceeds of property sales to pay the wages of its 10,000 staff over recent months.
Mr Curtin warned the company was on a "knife-edge" and its future is at risk. The Government said last month that it would be provide no further Exchequer support, following the €12.7 million it provided in 2003.
The Communications Workers Union (CWU), which represents the vast majority of An Post staff, said it would not be commenting on the latest development until further talks were held next week.
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