BERLIN (dpa-AFX) - In the wage dispute at Deutsche Post, the fronts remain hardened. On Monday, the Verdi trade union began a strike ballot at the Bonn-based company, which runs until March 8, to decide whether to go on an indefinite strike. Industrial action is likely to have significant consequences for mail and parcel delivery. The result of the strike ballot is to be announced on March 9.

The same day is the logistics group's annual press conference, at which outgoing CEO Frank Appel is expected to announce record profits. Verdi is referring to the high profits to justify its demand for 15 percent more pay. However, the profits are mainly generated abroad.

The collective agreement for 160,000 letter carriers, parcel delivery staff and other employees in Germany expired at the turn of the year. The members of Verdi who work in this postal sector are entitled to vote in the strike ballot. According to the union, that is more than 100,000. If at least 75 percent of those polled reject the postal offer, a strike is to take place.

The separate, smaller DPVKOM union plays no role in this. DPVKOM had demanded a pay increase of 12 percent and, after the postal collective bargaining offer, noted positively that some DPVKOM demands had been taken up. From Verdi's point of view, the management's proposal is not enough to significantly improve pay and compensate for the loss of purchasing power.

In recent weeks, Verdi had increased the pressure in the collective bargaining negotiations with warning strikes; millions of items could only be delivered late due to the work stoppages. Swiss Post rejects the union's demand as economically unfeasible and warns of job cuts if personnel costs rise too sharply. Subcontractors, who have so far only played a niche role at the "yellow giant," could be used more in the future, according to management.

So far, Deutsche Post has offered a pay increase in two stages starting in 2024, which would improve pay by an average of 11.5 percent, according to company sources. Separately, employees are to receive 3,000 euros net in stages starting this year, which will flow as an inflation compensation bonus. Compared to Verdi's demand of 15 percent within one year, the Post offer, which is based on a 24-month period, is significantly lower.

The Post is in a good economic position. However, its core business - letter and parcel delivery in Germany - is nowhere near as important as it used to be. Of the operating profit of over 8.4 billion euros expected for 2022, 1.35 billion will come from the Post & Parcel Germany division. While other Group units became more profitable, operating profit in the core business declined. Considerations by management to possibly rely on outsourcing were described by Verdi as an "intimidation attempt."

The Post currently operates as a "universal service provider" - meaning it is obliged to deliver items everywhere in Germany. For example, 80 percent of letters posted must be delivered on the next business day. However, the regulations, which are more than two decades old, are to be reformed. The Federal Ministry of Economics recently made proposals to this end. In the future, there should be "opportunities for more sustainability and reliability in the universal service". The time pressure could be reduced and the 80 percent requirement dropped. In return, however, other requirements could be tightened.

The Postal Service continues to push for a change in the letter system to two-tier delivery. "The consumer can decide at what speed his letter is transported," said Chief Human Resources Officer Thomas Ogilvie to Funke Mediengruppe. It has been known for some time that the Group would like to deliver mail at two speeds - with different prices - as in other European countries./wdw/DP/ngu