Business
Rail strike is cancelled – at the cost of paid
When Gabe Christenson started feeling run down a few years ago, he didn’t go to the doctor.
Like roughly 30 million other Americans, the 45-year-old railroad worker doesn’t have any paid sick leave and he didn’t want to get punished for taking time off.
According to Gabe, his company’s attendance policy meant marks against a worker for any time away, “so I was putting off going”, he said.
When he finally scheduled an appointment, the doctor told him he had a gut infection. If caught early, it could have been treated with medication, but as it was, Gabe learned he would have to have some of his tissues removed.
In recent weeks, demands for paid sick leave from rail workers like Gabe pushed the US to the brink of its first national rail strike in 30 years.
The walkout was averted only after President Joe Biden and Congress intervened, forcing rail workers to accept the terms of a new contract.
It offered a pay rise, an additional personal day and a few other benefits – but no paid sick leave.
The outcome has outraged thousands of workers who had hoped for more support from a political party and a president who had campaigned on the promise of passing national sick leave and supporting unions.
“It’s a slap in the face,” said Gabe, a registered Democrat who voted for Mr Biden in 2020 and is part of Railroad Workers United, an informal group that raised concerns over the issue. “People are scared for their jobs ….We need protection.”
“Here Biden is supposed to be this super pro-labour president and Amtrak Joe and everything like that,” he said, referring to a nickname given to the president for his fondness of riding the national passenger rail.
“People are just deflated because this has happened so many times.”
Sick leave is a major sticking point not just for rail union members.
The US is one of only two countries in the 38-member Organization of Economic Cooperation and Development without a national law guaranteeing paid sick leave for its workers. (The other, South Korea, is now trialling a paid sick leave programme.)
Though 16 states have passed laws requiring paid sick leave over the last decade, one in five workers across the country still does not have access to the benefit, with low-wage workers most at risk.
The issue has emerged repeatedly in labour disputes in recent years, as workers, empowered by a strong job market and contending with coronavirus and an unusually severe flu and virus season, demand more from employers.
Erica, a single mum of three, said she left a job she loved in 2020 – working as a paediatric nurse in an emergency room in Tennessee – to work for a rival hospital that offered paid sick leave, in addition to other time off.
“It just shocked me that they wanted us to use our paid time off and we would be off 10 or 14 days,” said the 38-year-old, who is a community advocate for A Better Balance, an advocacy group, referring to the extended quarantines that were common at the start of the pandemic.
When she didn’t have paid sick leave, she ended up with no vacation and had to take unpaid days to care for her daughter, straining her finances.
“It’s clearly an area where we need federal protections,” said Jennifer Pomeranz, a professor of public health at New York University, who has tracked the issue. “It shouldn’t be because you live in a state that’s more pro-business than another state that you lose paid sick leave.”
For a moment, during the pandemic, it seemed like a national policy might emerge.
In 2020, Congress passed a temporary law requiring most companies to offer two weeks of paid sick leave to staff forced to quarantine due to Covid-19.
But that expired at the end of the year and firms quickly trimmed the benefits.
Despite efforts to revive the issue, many Republicans were opposed to the principle of government-given “business mandates”, and talks petered out.
“We need to remember that we’re really not good at running businesses from Congress,” Senator Richard Burr, a Republican from North Carolina, said in May 2021, the last major public hearing on the issue.
While he said he believed people should be able to take time off if sick, “the one-size-fits-all approach does not work on issues, especially on paid leave”.
Sherry Leiwant, co-founder of A Better Balance, who has been working on paid sick leave campaigns since the early 2000s, called the decision not to extend the benefit in 2020 “the most disheartening thing that has happened in my work on this issue”.
“I found that devastating,” she said, adding that a national law now looks “impossible”.
“At a moment when we were celebrating all these front-line workers, who were keeping the economy going at the risk of their own health, that we couldn’t include paid sick days as a requirement in our Covid relief package – it was just shocking.”
Erik Loomis, a professor of labour history at the University of Rhode Island, said the Biden administration made a mistake not to take the issue more seriously as it worked to broker a deal between unions and railroads earlier this year.
But he said no president, no matter how labour friendly, would be willing to risk an economically damaging strike over sick pay.
“Paid sick leave at the national level is not even part of the conversation at this point,” he said, adding that the rail contract otherwise is “very good for workers”.
“Theoretically maybe a situation like this could spark some conversation … but I think it’s unlikely.”
The National Railway Labor Conference, the organisation representing the freight rail firms in the labour negotiations, argued that rail workers have ample personal and holiday leave, which can be used in the event of illness, as well as the ability to take unpaid time off.
They disputed claims by workers that managers are increasingly rejecting such requests, as staffing levels have fallen.
Gabe, who has worked for the railroad since 2004, said the companies could afford the benefit, noting that they have earned record profits in recent years.
“Nobody out here will tell you that they don’t want to work – we’re all out here to make money. We know that it’s all hours and we’re on call, but you used to have the ability take time off,” he said. “Now they’re just squeezing us so hard, like blood out of a turnip.”
“They could give me 300 personal leave days but what are they worth if I can’t use them?”
Reports /TrainViral/
The prospective new owner of Royal Mail has said he will not walk away from the requirement to deliver letters throughout the UK six days a week, as long as he is running the service.
“As long as I’m alive, I completely exclude this,” Czech billionaire Daniel Kretinsky told the BBC.
Mr Kretinsky has had a £3.6bn offer for Royal Mail accepted by its board.
Shareholders are expected to approve the deal in the coming months, but the government also has a say over whether it goes ahead.
Currently the Universal Service Obligation (USO) requires Royal Mail to deliver letters six days a week throughout the country for the same price. But questions have been raised over whether the service could be reduced in the future.
In an exclusive interview with the BBC, Mr Kretinsky also said he would be willing to share profits with employees, if given the go-ahead to buy the group.
However, he appeared to reject the idea of employees having a stake in Royal Mail, which unions have called for in exchange for their support.
The Royal Mail board agreed a £3.6bn takeover offer from Mr Kretinsky in May for the 500-year-old organisation, which employs more than 150,000 people. Including assumed debts, the offer is worth £5bn.
But because Royal Mail is a nationally important company, the government has the power to scrutinise and potentially block the deal.
As well as keeping the new government on side, Mr Kretinsky also faces the task of convincing postal unions that the proposed deal will benefit employees.
The USO is a potential sticking point for both the government and unions.
Royal Mail is required by law to deliver letters six days a week and parcels five days a week to every address in the UK for a fixed price.
How well this has actually been working in practice is a different matter. Ten years ago, 92% of first class post arrived on time. By the end of last year it was down to 74%, according to the regulator Ofcom.
Last year the regulator fined Royal Mail £5.6m for failing to meet its delivery targets.
Royal Mail has been pushing for this obligation to be watered down. It wants to cut second class letter deliveries to every other weekday, saying this will save £300m, and lead to “fewer than 1,000” voluntary redundancies.
‘Unconditional commitment’
Mr Kretinsky has committed in writing to honouring the USO, but only for five years.
And after that, in theory, the new owners could just walk away from it.
However, Mr Kretinsky told the BBC: “As long as I’m alive, I completely exclude this, and I’m sure that anybody that would be my successor would absolutely understand this.
“I say this as an absolutely clear, unconditional commitment: Royal Mail is going to be the provider of Universal Service Obligation in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around.”
Mr Kretinsky added that the written five-year commitment was “the longest commitment that has ever been offered in a situation like this”.
Another potential stumbling block for the deal, however, is how the company will be structured.
Unions would like to see the company renationalised, but Dave Ward, general secretary of the Communication Workers Union (CWU), told the BBC that would be “difficult in the current political and economic environment”.
Instead, what the CWU is pushing for is “a different model of ownership” – that is, where the employees part-own the business.
To get its support for the takeover, the union wants employees to share ownership of the company, along with other concessions including board representation for workers.
It says profit sharing is “not going to be enough to deliver our support and the support of the workforce”.
If the union doesn’t get what it wants, it won’t rule out industrial action, Mr Ward said. Its members went on strike in 2022 and 2023.
Although Mr Kretinsky said he is “very open” to profit sharing, he is not in favour of shared ownership.
“I don’t think the ownership stake is the right model,” he said. “The logic is: share of profit, yes, [but an] ownership structure creates a lot of complexity.
“For instance, what happens if the employee leaves? He has shares, he is leaving, he is not working for the company, he [still] needs remunerating.”
Mr Kretinsky said he didn’t want to create “some anonymous structure” but instead “remunerate the people who are working for the company, and creating value for the company”.
The union is also concerned about job losses and changes to the terms and conditions of postal workers’ contracts.
Mr Kretinsky has guaranteed no compulsory redundancies or changes in terms and conditions but only until 2025.
“If we are more successful, and we have more parcels to be delivered, we need not less people, but we need more people,” he said. “So really, job cuts are not part of our plan at all.”
He said if the management, union and employees work together, “we will be successful”.
Another concern is the potential break-up of the business.
The profit for Royal Mail’s parent company last year was entirely generated by its German and Canadian logistics and parcels business, GLS. Royal Mail itself made a loss.
Mr Kretinsky has promised not to split off GLS or load the parent company with excessive debt, although borrowings will rise if the deal goes through.
But he has a way to go to convince the CWU.
“I can’t think of any other country in the world that would just just hand over its entire postal service to an overseas equity investor,” Mr Ward of the CWU said.
However, Mr Kretinsky said that the postal unions “do understand that we are on the same ship, and that we need this ship to be successful, and that if we are there, we don’t have any real problems to deal with, because the sky is blue, and it’s blue for everybody.”
The union cannot stop this deal but the government can block it under the National Security and Investment Act.
Business Secretary Jonathan Reynolds has said he will scrutinise the assurances and guarantees given and called on Mr Kretinsky to work constructively with the unions.
Mr Kretinsky may say that he and the unions are ultimately on the same ship but, as things stand, they are not on the same page.
Who is Daniel Kretinsky?
Daniel Kretinsky started his career as a lawyer in his hometown of Brno, before moving to Prague.
He then made serious money in Central and Eastern European energy interests.
This includes Eustream, which transports Russian gas via pipelines that run through Ukraine, the Czech Republic and Slovakia.
He then diversified into other investments, including an almost 10% stake in UK supermarket chain Sainsbury’s and a 27% share in Premier League club West Ham United.
The Czech businessman is worth about £6bn, according to reports.
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