Post's franchise plan sparks pay cut fears

Hundreds of workers could face drastic pay cuts under New Zealand Post's new franchising model.

Last month NZ Post announced it would close the Mana, Thorndon and Karori PostShops and franchise postal services to private businesses.

The announcements came as NZ Post tries to cope with the decline of postage - in the 2012-13 financial year, 63 million fewer items were posted than the year before, a 7.5 per cent reduction. The drop-off during 2013-14 is expected to be even higher.

In Wellington and Hawke's Bay, NZ Post has closed or will soon close shops in Thorndon, Karori, Mana, Wainuiomata, Raumati Beach and Flaxmere. It says a total of 25 will be closed nationwide.

The Thorndon and Karori PostShop closures will put 12 jobs and popular services at risk. Six staff work in each shop and may not be employed by NZ Post after the move.

Up to 2000 workers, from posties to management and backroom staff, could lose their jobs as the state-owned agency moves to reduce property costs amid a decline in traditional mail delivery caused largely by the rise of internet- based transactions.

Spokesman Richard Trow said NZ Post was "committed to having 880 points of presence in the community".

Most of the PostShop services would still be available inside other businesses, such as FourSquare or PaperPlus, which already happened at 136 sites nationwide, he said.

NZ Post called the process "substitution", and said there would be no loss of "points of presence" in Wellington and Hawke's Bay.

The Engineering, Printing and Manufacturing Union (EPMU), which represents 3500 postal workers, said overseas experience showed workers could face pay cuts of up to 30 per cent by moving to a franchise.

The initial closure of 25 stores would affect about 160 workers, and union national industry organiser for communications Joe Gallagher said it was a challenging time as the union worked with NZ Post to understand the implications of the change.

"It's particularly difficult for employees who've been working for 25 to 30 years when the Government keeps talking about a rock star economy, but these people face a 30 per cent pay cut, which is a concern for us," Gallagher said.

NZ Post store network general manager John Andrews said: "We can't guarantee what a third-party employer pays its employees. Our focus at the moment is supporting our staff through these changes."

Porirua Mayor Nick Leggett and Mana MP Kris Faafoi have been outspoken in opposition to the closure of the Mana store, as has Grey Power.

Last month Faafoi's office received more than 800 replies to a survey the MP sent out when he heard the PostShop was to be downscaled and services shifted from its premises at 99 Mana Esplanade.

More than 95 per cent wanted Mana PostShop to stay as it was, Faafoi said.

Grey Power central zone representative Peter Matcham said that, as long as services remained through franchises, it was not necessarily of great concern. However, if it led to a loss of services from the community - both postal and Kiwibank - it would be a different ballgame.

If the postal service was to be run as a commercial operation, it had to react to changing times.

"It's fair to say the people Grey Power represent are higher users of the postal service in general. It's not necessarily because they aren't au fait with computers, just that that is how they've always done it."

Former NZ Post boss Elmar Toime said the new model was part of an overseas trend towards private shops running postal services, and there was "less and less need" to have formal post offices. Toime, a former executive deputy chairman of Britain's Royal Mail, said he was confident NZ Post would come through the transformation.

The Dominion Post