On Thursday, the management and unions of state-owned postal company Magyar Posta reached an agreement on remuneration that will raise wages by 8% on average, and keep the previously promised performance bonuses in place. The decision comes after the government and the company claimed that their hands are tied by the EU as any further support would violate the block’s related directives.
Trade unions have long been lobbying to raise the low wages of postal workers. In mid-July however, the management of Magyar Posta informed trade unions that instead of the demanded minimum 10% wage increase, it could offer only a one-time, HUF 50,000 (EUR 145), seniority-based bonus to only roughly 8,000 employees out of 28,000.
In response, hundreds of postal workers held a demonstration at the office of the Minister responsible for the management of national assets. They believed the proposal without mention of a wage increase was unacceptable, and the offer of the one-time bonus would have only meant an additional 1.5% for this year, which is less than half of the inflation forecast.
Even PMO head Gergely Gulyás admitted that Hungarian postal employees were “earning undeservedly low wages compared to the high-quality services they provide.”
The government and the management of the Magyar Posta, however, blamed current EU regulations for not having been able to raise the wages.
As Magyar Posta Inc. operates as a market player, according to the EU competition rules in force since 2014, it can receive a maximum of EUR 15 million per year in state support. Any state aid in excess of this can only be granted through a specific procedure, with the approval of the European Commission.
Although the EC has not yet granted its permission, the leadership of the postal company shifted its previous stance by Monday, which led to the agreement.
The pay increase will have retroactive effect from May 1, 2020. Fulfilling the terms of the agreement will cost Magyar Posta about HUF 6 billion (EUR 17.4m) this year.
On top of the wage increase, Magyar Posta will also pay performance bonuses to its employees, 5.5 billion euros in total, in two installments, half in April and half in December.
Meanwhile, the government assured that it is in talks with the European Commission on clearing state aid for Magyar Posta to cover the additional payroll costs.
Featured photo by Zoltán Máthé/MTI