An Post will be "extinct" in little more than four years unless postal workers accept major work changes, the Government has warned.
From January, private companies will be able to carry letters weighing more than 50g, and ordinary letter post will be opened up by 2009.
"We have liberalisation coming. It is inevitable in 2009. It is already there in a number of areas. If An Post isn't strong enough to withstand competition it is going to be extinct very, very quickly after 2009, if not before that," said Minister for Communications Noel Dempsey.
Speaking in Killarney, Co Kerry, on Saturday, the Minister was critical of existing work practices in the semi-State company.
Describing them as "archaic", he said postmen's basic pay had been increased over the years through the common availability of overtime. "You have a situation whereby people get paid overtime on their holidays. You have a situation where people can bank their overtime at one stage and use it at another time."
Postmen sometimes can complete their round in 3½ hours even though they get paid for a 7½-hour shift.
"An Post, though, can't force him, can't ask him if another postman is out to do 3½ hours somewhere else.
"He gets overtime if he does that, 7½ hours overtime. There are archaic practices," the Minister told The Irish Times.
Acknowledging that change was difficult for An Post workers to accept, he said they would get a 12 per cent increase in basic pay if they accepted reforms, and 12 per cent more under the national pay deal. "It would leave them better off. They would be sure of this because it is basic pay rather than overtime. They would be much better off because they would be sure of their jobs. If this continues, the jobs are not going to be there."
The semi-State's letter-post business is declining annually, and will fall further from January once private companies are allowed to carry letters weighing more than 50g. Currently, they can carry letters over 100g.
"It is just inevitable that An Post is going to go out of business unless changes are made," said Mr Dempsey, who met with the Communications Workers' Union last week.
He said the public would demand the accelerated introduction of private competition if postal workers strike now and disrupt deliveries, particularly in the run-up to Christmas.
"I would say that there will be a huge demand for it if people can't get services," he said, adding that there have been "increasing complaints" about deliveries over the last three or four months.
"People are telling me that it is taking 12 to 14 days to get their post. I get stories from all over the country of people not getting their cheques."
Business groups, such as Irish Small and Medium Enterprises and Ibec were already demanding more competition if An Post workers do not accept changes. "That is not something I particularly want to do. I have made the arguments very, very clearly to the Communications Workers' Union. Workers cannot expect the State to come to the rescue if An Post goes broke.
"There was a time when this was a monopoly, when it was a civil service set-up where you could turn and look to the State for subsidies and bail-outs. That can't happen anymore; we are in a commercial world and they have to act commercially."
While "back-door diplomacy" had happened in the past, the Government would not now seek to ignore the Labour Court's recommendations.
"The Government is bound by it [the Court's decision] as well. We are not going to get involved or we will get ourselves into a huge amount of trouble in relation to social partnership if we start circumventing and changing Labour Court decisions. We are not going to do that."
Mr Dempsey also criticised sick leave rates in the company. "There are about 9 per cent of the workers out every day on sick leave. By strange coincidence, it happens to be about 9 per cent every day."
