Postal workers have threatened to go on strike and to punish the Government at the next election over An Post's refusal to pay the full terms of Sustaining Progress.
Anger at the Government's stance on the issue was expressed by leaders of all unions at the company at the biennial conference of the Irish Congress of Trade Unions (Ictu) in Belfast.
They called for the support of the trade union movement for "a campaign of industrial unrest" at the company, unless staff and pensioners are paid the full 8.5 per cent pay rise outstanding under Sustaining Progress.
A 5 per cent increase - the first for more than two years - is to be paid by An Post at the end of this month, in line with the recommendations of independent assessors appointed by the Labour Relations Commission. Unions have rejected the assessors' findings and have referred the matter to the Labour Court.
The company, which announced a €7 million profit last year after major losses in the previous two years, had pleaded inability to pay the increase.
Terry Kelleher, a postal worker and member of the Civil, Public and Services Union (CPSU), told the conference that he was losing €40 to €50 a week as a result of the company's stance.
Workers at the company were prepared to "walk out the door and stay out there" if the increases due were not paid in full. "An Post staff blame Fianna Fáil and they are prepared to use their vote at the next election," he added. Mr Kelleher is a Socialist Party activist.
Communications Workers' Union deputy general secretary Terry Delaney said the patience of postal workers had been "seriously tested" over the past two years, yet only one day had been lost to industrial action.
However, "if the Government continues to support management in not paying workers and the even harder-hit pensioners, we will embark on a campaign of industrial unrest including strike action to secure full payment".
The Government's support of the company's position represented a challenge to the trade union movement in general, he said. "It opens the door for other semi-State companies to plead inability to pay on the basis that the cost of providing a public service makes it uneconomic to pay their staff."
Public Service Executive Union deputy general secretary Tom Geraghty said staff at An Post had created one of the great success stories of Irish life. It was not surprising that its finances had met potential difficulty given that it had to meet uneconomic social obligations and had gone nearly 12 years without a price increase.
It was "totally unacceptable" that workers should have to pay for a failure of public policy.
CPSU official Eoin Ronayne said it was not sustainable that a State-owned company could plead inability to pay a cost-of-living increase at a time when the Government was overseeing one of the most successful economies in Europe. If the Government was not prepared to honour the pay terms of Sustaining Progress then unions would have a "serious problem" with continued social partnership, he said.
Association of Higher Civil and Public Servants general secretary Seán Ó Riordáin said industrial relations at An Post had become difficult as "the central issue of trust is not there". His union was not noted for its militancy but members at An Post had twice balloted for industrial action last year.
An Post is seeking to cut up to 1,500 jobs and introduce work practice changes as part of a major rationalisation of collection and delivery services. A Labour Court recommendation on that issue, which will be balloted on by the Communications Workers' Union, is due shortly.