Dispute hits Wrocławska Jedynka

Download article in original language : PL0405106FPL.DOC

Over January-April 2004, a serious industrial conflict hit Wrocławska Jedynka, a financially troubled Polish industrial construction company. The dispute started when management called for pay cuts in order to save jobs, triggering a strike, and worsened when the company dismissed striking workers. A settlement was finally reached after intervention by regional and national social dialogue institutions.

The Wrocławska Jedynka industrial construction enterprise, based in Wrocław, has been widely hailed as an example of successful restructuring. Indeed it has recently won a notable contract for construction work in Iraq, which is expected to net up to USD 3 million for the company. The contract involves erecting housing developments in three Iraqi cities - Babylon, Basra, and Karbala. However, since autumn 2003, Wrocławska Jedynka has been experiencing financial difficulties, and its problems have been compounded by escalating conflict between the company’s directors and the employees. Friction first arose when NFI XIV (the 14th National Investment Fund) acquired a stake in the company.

The deteriorating financial situation of Wrocławska Jedynka has led to a situation whereby it is two months in arrears in paying its employees. A new board of directors appointed in early 2004 began its work by making an offer to the company branch of the Independent and Self-Governing Trade Union Solidarity (Niezależny Samorządny Związek Zawodowy, NSZZ Solidarność), whereby present employment levels would be maintained if the employees accepted a 20% pay cut. In response to this proposal, 145 of Jedynka’s 303 employees went on strike from 27 January 2004. Experts retained by the company pronounced this industrial action to be illegal, and its participants were dismissed on disciplinary grounds. The company stuck to this decision in spite of a call to reconsider issued by the State Labour Inspection (Państwowej Inspekcji Pracy, PIP). Despite the dismissals, the employees' protests were not discontinued and indeed the strikers embarked on an occupation of the company’s head office. Representatives of the employer made several unsuccessful attempts to persuade the police to intervene on their behalf; finally, they hired a private security company whose staff forcibly ejected the striking employees from the office on the night between 27 and 28 March 2003. Rather than giving up in the face of this setback, however, the striking employees simply moved their protest out into the street in front of Wrocławska Jedynka’s offices.

Involvement of social dialogue institutions

In the light of the conflict’s escalation, the Wrocławska Jedynka case was taken up by the relevant tripartite Regional Social Dialogue Commission (Wojewódzka Komisja Dialogu Społecznego, WKDS) (PL0307105F). A session of the commission presidium was convened on 12 March 2004, and the protagonists at Wrocławska Jedynka were called upon to seek a mediated solution of their dispute. Two weeks of negotiations ensued, involving a mediator recommended by the district authorities, but not only failed to bring about a solution, but actually appeared to lead to the conflict’s worsening. The tension came to a head with the decision to expel the striking workers from the company’s head office by force. In the wake of this action, another session of the WKDS presidium was called on 29 March, and it was agreed that the situation called for the involvement of a higher consultative body.

Accordingly, the situation at Wrocławska Jedynka was discussed at the session of the national Tripartite Commission for Social and Economic Affairs (Komisja Trójstronna do Spraw Społeczno-Gospodarczych) (PL0210106F) held in Warsaw on 30 March. The Tripartite Commission’s presidium decided that the significance of the Wrocławska Jedynka case is regional, and that it should be considered by the Lower Silesia Regional Social Dialogue Commission with the involvement, for the national Tripartite Commission, of Leszek Karwowski of the Polish Employers’ Confederation (Konfederacja Pracodawców Polskich, KPP), who is also the deputy chair of the regional commission. Another member of both the national Tripartite Commission and the regional commission who was involved in the dispute was Janusz Łaznowski of NSZZ Solidarność.

During a session of the WKDS held on 5 April 2004, a representative of the Ministry of the State Treasury (Ministerstwo Skarbu Państwa, MSP) pledged the Ministry's commitment to achieving a resolution of the conflict. It was willing to consider the possibility of extending public aid of up to PLN 1 million to the struggling Wrocławska Jedynka.

The next meeting of the WKDS presidium took place on 20 April, with members of the striking work force in attendance. A representative of NSZZ Solidarność at Wrocławska Jedynka, Z Rudnik, announced that, the day before, he had addressed two proposals to A Krynicki, the chair of the company’s supervisory board. The first proposal was that 65% of the striking employees be allowed to keep their jobs at Wrocławska Jedynka, and the second was that PLN 1 million should be set aside for severance payments to those employees who had been dismissed. Adoption of the latter idea would mean that the dismissed employees would receive some PLN 7,200 each, approximately the same amount as they would be entitled to in the event of a collective redundancy. The union activists also demanded that the PLN 7,200 be guaranteed as a net amount, after any applicable taxes.

The striking workers and company management reached an agreement on 30 April. In lieu of their previous claims, the employees dismissed by Wrocławska Jedynka will receive an average of PLN 7,200 each by way of a severance benefit. The final decision as to whether the law was broken in the dispute, and if so by which party, has been left to the labour court, which yet has to rule on the case. It has been decided that the former employees will receive damages for termination of their employment relationship without due notice and severance benefits under the collective redundancies legislation, as well as seeking reinstatement to their jobs while, at the same time Wrocławska Jedynka will pay every such employee PLN 7,200 net. This money is to be passed on to the former employees once Wrocławska Jedynka has received PLN 1,209,600 in loans from the Ministry of the State Treasury. Jedynka Wrocławska and the union representatives have also agreed that, in the future, industrial relations in the company will be shaped so as to swiftly eradicate any forms of action such as witnessed recently. The management of Wrocławska Jedynka has also undertaken not to effect any further large-scale redundancies prior to the end of 2004.

Commentary

Tracing the history of the conflict at Wrocławska Jedynka leaves one with the conclusion that the parties opted for confrontational means of dealing with the matter. This would back up the arguments many commentators who complain that industrial relations at all levels in Poland are plagued by the lack of a culture of compromise. Hope for the gradual instilling of such a culture is provided by the active efforts of the social dialogue institutions to foster good practices rooted in respect for one another’s interests and in the search for workable consensus. The involvement of the regional social dialogue commissions in mediation also presents the possibility of implementing some procedures to be followed when conflicts arise. The Wrocławska Jedynka case has demonstrated once again that the presidium of the regional social dialogue commission constitutes a sort of 'rapid reaction force' whose involvement is sought in the first instance when a situation becomes difficult. (Jacek Sroka, Institute of Public Affairs [Instytut Spraw Publicznych, ISP] and Wroclaw University [Uniwersytet Wrocławski]