National strike at railway company over pay

The Free Trade Union of Railway Workers launched a nationwide strike after several rounds of wage negotiations failed with the Hungarian Railway Company (MÁV). The trade union is demanding a 10% pay increase for employees of MÁV’s outsourced companies, in addition to a bonus of HUF 250,000 to be paid to all railway workers after last year’s privatisation of MÁV Cargo.

Following the failure of several rounds of negotiations with the Hungarian Railway Company (Magyar Államvasutak, MÁV), the Free Trade Union of Railway Workers (Vasúti Dolgozók Szabad Szakszervezete, VDSZSZ) launched a nationwide strike. Officials of VDSZSZ, which represents 10,000 out of 36,000 employees of MÁV, insisted that they would continue to strike until agreement is reached.

Cause of dispute

VDSZSZ is demanding a 10% pay increase for employees of the companies to which MÁV has outsourced work. In addition, it is calling for a bonus of HUF 250,000 (about €956 as at 11 March 2008) to be paid to all railway workers following the privatisation of MÁV Cargo – the freight transport arm of MÁV. This bonus would be paid by a consortium of Rail Cargo Austria (RCA) and Győr-Sopron-Ebenfurt Railway (Raaberbahn AG, GYSEV), which paid €400 million for 100% of the company’s shares.

According to VDSZSZ, when MÁV outsourced MÁV Cargo in 2006, employees received a 10% wage increase, which established a precedent; it argues, therefore, that the same wage increase should be given to all employees of the outsourced companies. With respect to the bonus of HUF 250,000, the President of VDSZSZ, István Gaskó, referred to the alleged promise of the former Minister of Economy and Transport, János Kóka, to pay a proportion of the privatisation revenue to all of MÁV’s employees in the event of a successful privatisation. The privatisation contract also stipulates that employees of MÁV Cargo should receive 5% of the company’s shares.

Negotiations fail

However, MÁV is contesting the legal grounds of having to pay either the bonus or pay increase, claiming that the demands of VDSZSZ would cost about HUF 30 billion (€115 million), on top of the costs incurred by the strike, which amount to HUF 720 million (€2.75 million) daily.

After several sessions of failed negotiations, the parties requested the help of the Labour Mediation and Arbitration Service (Munkaügyi Közvetítő és Döntőbirói Szolgálat, MKDSZ). The appointed mediator, László Herczog, State Secretary of the Ministry of Social Affairs and Labour (Szociális és Munkaügyi Minisztérium, SZMM), made recommendations during the negotiations, but so far has not managed to resolve the dispute.

Consequences of strike

During the strike, the majority of passenger and freight trains stopped running and passengers received limited information about the suspended services. The three main railway stations in Hungary’s capital city of Budapest were paralysed as most of the ticket and train inspectors, as well as traffic controllers, were on strike. On the first day of the strike, MÁV brought the matter before the court. The Budapest Labour Court (Fővárosi Munkaügyi Bíróság, FMB) declared that VDSZSZ’s claim for a 10% pay increase was unlawful; however, it also ruled that the strike demand for a bonus after the successful privatisation of MÁV Cargo was in fact legal.

Hungary’s Minister of Economy and Transport, Csaba Kákosy, claims that the trade union has been playing a political game in the run-up to the referendum against privatisation of the healthcare system, which was due to take place on 9 March 2008 (HU0802029I). Minister Kákosy warned that if the rail strike drags on, funds will be transferred to bus companies so that they can take on some of the public transport services.

Position of other social partners

Although other railway trade unions did not join the strike, both the Trade Union of Hungarian Railwaymen (Vasutasok Szakszervezete, VSZ) and the Trade Union of Engine Drivers (Mozdonyvezetők Szakszervezete, MOSZ) expressed their support for the employees, albeit not for the officials of VDSZSZ. The President of VSZ, Dezső Simon, stated that the strike would jeopardise jobs and make negotiations more difficult with the government over the closure of secondary lines (HU0711029I).

The National Association of Entrepreneurs and Employers (Vállalkozók és Munkáltatók Országos Szövetsége, VOSZ) published a statement in which it pointed out that the VDSZSZ President, Mr Gaskó, as President of the Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA), had co-signed the agreement in the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT) for wage increases of between 5% and 7.5% for 2008 (HU0802019I).

Meanwhile, the International Transport Workers’ Federation (ITF) sent a letter to Minister Kákosy requesting that the demands of VDSZSZ be met.

Commentary

The recent railway strikes have highlighted the inefficiency of both Hungarian strike law and national wage agreements. In relation to strike law, plans are being made to amend regulations on essential services and on how much notice trade unions need to give in advance of strike action. In terms of wage agreements, the OÉT only makes recommendations for wages, which by definition cannot be enforced; moreover, even signatories may ignore such recommendations in their lower-level actions.

Máté Komiljovics and László Neumann, Institute for Political Science, Hungarian Academy of Sciences

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