Romania: Latest working life developments – Q2 2016
Opposition to new measures to reduce public sector wage inequality, a fresh start for the Social and Economic Council, and new measures to reconcile family and working life are the main topics of interest of this article. This country update reports on the latest developments in Romanian working life in the second quarter of 2016.
Opposition to measures to reduce public sector wage inequality
A new act to regulate public sector salaries was adopted following long negotiations and several street protests which culminated in a protest by 10,000 trade unionists from the education sector on 1 June 2016. The protests also prompted the resignation of Ana Costea, Minister of Labour, and the appointment of a new labour minister, Dragos Pislaru. The new act (Emergency Ordinance no. 20/2016) aims to eliminate wage inequalities in the public sector and align salaries of employees occupying the same positions in different institutions. It grants wage increases in the health sector and puts in place supplementary payments for performance for workers in health and education. About 30% of the public employees will benefit from wage increase as a result.
The measures introduced by the ordinance will increase public wage expenditure by 10% next year compared with 2016, amounting to 7.7% of the gross domestic product (GDP). This is the highest level of expenditure on the public sector wage bill since 2011. However, it is still below the 2009 level of 9.5% of GDP, the year before public sector wages were cut by 25% as part of the 2010 austerity package. Even so, not all public employees are satisfied with the increases set by the ordinance. Public administration trade unions said aspects of the ordinance are discriminatory and threatened to begin a general strike starting on 19 July. The trade unions from the healthcare sector submitted their proposals for amendments to the ordinance to the Romanian Parliament and announced they would organise public protests if their complaints were not addressed.
Fresh start for Social and Economic Council
Tripartite social dialogue is expected to improve after a fresh start for the Economic and Social Council (ESC), a national tripartite consultative body created in 1997 that approves all important legislation in the field of taxation, social policy, education and labour relations. A new emergency ordinance (66/2016) is expected to permit the formation of a new plenary for the council and make the election of a new president possible. In recent years the council’s work has been obstructed by a set of legislative gaps that made it difficult to replace the government’s representatives with civil society representatives, as required by the social dialogue legislation adopted in 2011 (62/2011). Although several efforts were made to break the deadlock, the government’s representative did not resign until January 2016 and effectively only left the council in May 2016. The emergency ordinance provides that the current ESC members will be removed from office within 30 days from the date it becomes effective, and a new plenary will be formed.
New efforts to reconcile family and working life
A new law (66/2016) provides for more generous and flexible conditions for parental leave. Parental leave can last for a maximum two years and the allowance for this period will amount to 85% of the parent’s average net income for the last 12 months. The new law also provides for a significant increase in the minimum monthly amount of the allowance. It will no longer be linked to the Reference Social Indicator (RSI) but to the gross minimum monthly wage, rising initially from RON 600 (about €150) to €1,062.5 (about €240). About 78,000 people currently receiving the minimum allowance will benefit from the increase.
Another law (57/2016) concerning the legal procedure for the adoption of children creates a new type of leave. Accommodation leave can be granted to employees who have adopted a child. During accommodation leave, the parent is entitled to a monthly allowance of RON 1,700 (about €380).