The company expected a total collapse of services but the union refused to let this happen, writes Chris Dooley
An intervention by the Minister for Communications, Mr Dermot Ahern, may be required to save An Post from itself.
Now in its second week, the postal dispute has taken a direction which the company did not foresee, and it is showing neither the wherewithal nor the inclination to resolve the situation.
The quick collapse of the postal service which An Post expected when it began suspending workers at its Dublin Mail Centre more than a week ago has not happened.
Instead, thanks to the stubborn refusal of the Communications Workers' Union to come out and fight in the manner expected, the service continues to operate, albeit on a limited scale.
The company's tactic of trying to exploit perceived divisions within the union has also backfired. It now faces a more confident and united CWU than was the case a week ago.
So how did it come to this?
It is certainly not all the company's fault. Its stance in the run-up to the dispute was entirely rational and justifiable.
The history of the conflict goes back at least to the 2000 agreement between the company and its unions, Transformation Through Partnership (TTP).
In exchange for agreeing to major work practice changes, staff received pay increases and were promised a 14.9 cent stake in the company, through the establishment of an employee share ownership plan (ESOP). For An Post management, a key objective of the TTP was to finally rid the company of its long-standing overtime culture, which has seen delivery staff come to rely on overtime as an essential element of pay.
Since the agreement was signed, both An Post and the CWU have continually accused each other of failing to deliver on their side of the deal.
Whatever the rights and wrongs of those arguments, it is clear that the company has undertaken major investment without getting the return, in terms of staff co-operation, that it expected.
The Dublin Mail Centre, for example, is one of four automated hubs in which An Post has invested more than €100 million in recent years.
Its inability to capitalise fully on this investment, by getting new, automated sorting systems in place, cutting down on the need for overtime, has been a source of deep frustration.
Management has also grown increasingly impatient with what it sees as the CWU's propensity to cause maximum disruption at least cost to itself.
It has some justification for this. Since early February, for example, CWU members have been engaged in unofficial disputes in Galway, Drogheda and Mitchelstown which have caused serious disruption to services.
The disputes concern a variety of issues and there are valid arguments on both sides, but management has been unable to sit down with the CWU to address the issues because the union insists it is not engaged in industrial action.
The company's failure to secure expected cost savings from the TTP has been compounded by the increasingly difficult business environment in which it operates.
Electronic competition with postal services, for example, is having an impact on the demand for letter post. Parcel services are also subject to increasing competition.
These and other factors left the company looking at a €46 million loss at the end of last year, only months after it had projected a €1 million profit.
If ever it needed co-operation from the CWU, its biggest union, it needed it then. But talks on a recovery plan broke down before Christmas.
And when the company announced, again with some justification, that it could not afford the 3 per cent pay increase due to staff under Sustaining Progress, the CWU refused to resume discussions on the recovery plan.
With its back to the wall and losses running at €2.5 million a month, management concluded that a major confrontation with the union was not only inevitable, but desirable.
There simply was no more time for talking, particularly when deals with the CWU had a habit of unravelling as soon as they were made.
In the weeks before the dispute, An Post managers briefed industrial relations journalists about the state of the company's finances and its relations with the CWU.
The message given was clear. The company had to get itself on to a new financial footing but there was no prospect of this being achieved through dialogue.
An industrial dispute was inevitable and the company was not going to shirk it. In effect, journalists were being shown the trenches in advance of the war.
There would inevitably be some pain, in the form of disruption to services, but there was no other way of getting the union on side and securing a viable future for the company, was the company view.
The only question remaining was when and how, rather than if, this confrontation would take place.
A planned strike by the CWU was put on hold by the union on Friday week last, but later that night members of its postal executive committee went out to the Dublin Mail Centre to tell staff not to co-operate with a new sorting system.
Management, already prepared for war, chose this opportunity to start it, responding with large-scale suspensions of staff.
However, as recent history demonstrates, wars, once begun, take unpredictable turns.
There are clear indications that the company expected its action to precipitate a total collapse of the postal service.
The CWU, however, refused to play its part.
To the surprise of management, its members turned up as normal on Sunday night to take away mail for delivery.
The company had expected that CWU members would support their mail centre colleagues by refusing to handle post processed at the centre.
By encouraging all members still on the payroll to continue working, the CWU has been able to portray itself as the party doing its best to keep the postal service operating in the face of bizarre management attempts to collapse it.
And there are strong indications that the company has done its best to provoke an escalation of the dispute.
It suspended far more staff at the mail centre, more than 500, than it had initially contemplated. At the outset of the row, the company itself said that only about 300 staff at the centre were trained to work the machinery at the centre of the dispute.
This was the maximum number, it told journalists, who could face suspension.
A spokesman later said that that figure appeared to have been incorrect.
Another provocative act was the company's decision to offer overtime to staff at delivery offices a day after colleagues on temporary contracts had been sacked because there was apparently no work for them to do.
CWU members would normally refuse to do the overtime in such circumstances.
Boxing clever as it has done all week, however, the union instructed its members to do the work as requested.
So, instead of the total collapse anticipated, the company is left with the worst possible scenario: a postal service limping along, a reinvigorated CWU, and talks on a recovery plan looking further away than ever.
After further informal contacts over the weekend, there is still no indication that the sides can find even a basis for discussions.
Calls last week for the intervention of Mr Ahern were premature. However, there is now an urgent need for management of An Post to show it is both willing and able to move forward from its present position.
If it cannot do this, Mr Ahern may, sooner rather than later, be required to step in and sort out the mess, while there is still a postal service to be salvaged.