Moving to Cleveland

Recent news stories have highlighted some of the absurd results that current labor contract provisions and civil service rules create as the Postal Service deals with workforce management today.

• The East Hampton Star reported the experience of two postal employees that were transferred from Manhattan to the far reaches of Long Island. The story was picked up by the New York Times and New York Post, which made it a national story. The commute that these employees face is not uncommon for businesses that have union agreements that guarantee jobs during a period of declining demand. Employees with guaranteed jobs at the Penn Central could be transferred from Delaware to Ohio if the jobs close to home disappeared. Similarly airline employees regularly are transferred from base to base when shrinking demand bumps an employee from a base closer to home.
  
  
• The Federal Times provided a detailed account of the practice placing employees in "standby rooms" until they can be assigned. The story notes that 11,000 can be placed in this position at any time or about 4.5% of the clerks and mailhandlers the Postal Service employees. The article illustrates the absurdity of union rules that prevent the Postal Service from using this standby time to train employees to be more productive at what they now do, or for other jobs that may become available in the future.
  
  
• The Akron Beacon Journal illustrated the challenge that the early retirement incentives will have for workforce planning in northern Ohio. Cleveland has 1,100 employees eligible for retirement incentives out of 1,700 working in the Cleveland processing plant. That's right. Sixty-five percent of the workers in Cleveland are eligible to retire. Another 550 are eligible in Akron and Canton. Similar figures likely exist throughout the Northeast and Midwest creating the possibility that the Postal Service could find itself in October needing employees in this region to fill vacancies created by early retirements.
  

The three stories combined raise the possibility of significant movement of employees once eligible employees take advantage of early retirement incentives. While some employees will see long commutes, like what happened in New York, others may be offered paid transfers to locations further away. As it is unlikely that Florida postal facilities will have retirement rates anywhere near what will be experienced in northern Ohio, the Postal Service may find it cheaper to pay to move an employee from Key West to Cleveland than to pay for an excess employee in Key West and a new employee in Cleveland. (Can you imagine making that move between November and January?)

Combined the articles raise two important issues as it relates to workforce planning.

• Why aren't lay-offs used to reduce the workforce?
• Why doesn't the Postal Service have more part-time jobs?

Why aren't lay-offs used to reduce the workforce? All of the articles note the roadblocks that the union agreements place on layoffs. Employees with six-years of employment have protections against layoffs outside of a more rigorous process. What these articles miss is the roadblocks that the civil-service RIF process place on rightsizing staff and the up-front costs that any workforce reduction causes.

Layoffs within the Postal Service must occur with the guidelines of civil service. This allows employees to bump employees with lower seniority, including seniority related to preferred classes of employees. The employees that are laid off are eligible for severance pay and unemployment benefits that could total far more than the early retirement incentives that the Postal Service is now offering. Finally, the civil service layoff of RIF process is time consuming and fraught with procedural land mines that can delay the reduction in staff or add costs to the process.

The early-retirement incentives that the Postal Service is now offering is a lower cost and more quickly implemented solution but not without its own challenges. The Cleveland example illustrates that the Postal Service will have challenges in some locations where potential retirements could create staffing challenges. The Postal Service has already noted the $450 million in cost for employee incentives. Additional costs will come from training new and existing employees and possible paid transfers to facilities that will be short staff after the retirements.

The Postal Service is not alone in using early retirement incentives as a preferred option for reducing the workforce, especially when the reduction has to be substantial. Similar incentives were offered to employees of GM, Chrysler and FedEx.

Why doesn't the Postal Service have more part-time jobs? One of the key highlights of the Federal Times article is a description of what is happening in Key West, FL. "Standby time, for now, is largely confined to mail processing facilities — though it is beginning to spread to retail post offices. The three post offices in Key West, Fla., employ 27 people. But under a schedule recently drafted by postal supervisors, 15 of them would spend at least part of their week on standby time." Here the issue is the labor agreement that limits the number of part-time clerk jobs. As noted in a previous post, the APWU contract limits part-time employees in a district to 2.5% of employees. While Key West may conduct some mail processing, most of the activity will involve window service with significant peak periods of customer demand. Most retail employers would use part-timers with regular schedules to deal with peak demand issues but the APWU contract does not allow for hiring a significant number of part-time retail clerks. Even the provisions for part-time/flexible did not work as the mail business needs part-time employees on regular schedules.

Layoff procedures and part-time jobs will likely be key issues negotiated in the next agreement with the APWU. Pressure from current employees give APWU leadership little incentive to back away from provisions in existing agreements on these subjects. Acceptance of changes by union leadership only if they are either imposed as part of an arbitrated contract agreement or if Congress demands that the parties negotiate changes as one of the conditions for relaxing retirement payment schedules and raising loan limits. The first possibility leaves leadership with clean hands. The second one will give them the opportunity of negotiating a seat at the table in deciding the future of the Postal Service and postal service jobs.