Government intervenes in Sintel dispute

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Sintel, a Spanish telephone installation company and a former subsidiary of Telefónica, has been involved in a serious industrial dispute since February 2000 over unpaid wages, redundancy procedures and the suspension of payments. In September, at the initiative of the trade unions, the government agreed to intervene and to seek a negotiated solution to guarantee the future of jobs and the company.

Sintel is a telephone installation company with a workforce of 2,000 employees in the main company and 3,000 in subsidiary companies. Approximately a further 3,000 workers are employed in companies subcontracted by Sintel.

Economic and labour problems

Economic and labour problems in Sintel go back to its privatisation in 1996, prior to which it was a public company that formed part of the Telefónica group. In March 1996, Telefónica (which had not yet been privatised) sold Sintel to MasTec, a private business group. The economic situation of Sintel underwent a continuous deterioration from then onwards, due to financial disagreements between Sintel and Telefónica in relation to the sale operation, the cutting of orders by Telefónica and the absence of a policy of diversification. In 1997 and 1998, Sintel workers were faced with the threat of redundancies that in the end did not take place.

In 1999, a new strategic plan adopted by Telefónica definitively confirmed Sintel's poor prospects of continuing to perform work for this company. The plan involved no investment in extending the telephone network, a 38% reduction in maintenance investment and a 25%-40% cut in the price of work units. These conditions and the award of "portfolios" of orders did great harm to the large installation companies, including Sintel, which had worked in 37 provinces under the old contract and now worked in only seven.

Following the announcement of the plan, the sectoral federations of the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) and the General Workers' Confederation (Unión General de Trabajadores, UGT) held a meeting with representatives of the Ministry of Industry to express their concern about the difficult situation of the workers in the large installation companies, and especially in Sintel. At this meeting, the Ministry representatives agreed to make the relevant contacts with the management of Telefónica and the Ministry of Labour to find a solution to this problem.

Meanwhile, the labour situation in Sintel also seemed to be on the right track and by mid-1999 a new collective agreement (the 12th) for the company was signed. After a long and tense bargaining process, the workers' committee, on which CC.OO held a majority, was able to achieve two of its main demands in the agreement: first, the creation of an industrial plan for Sintel that included the diversification of its activities and ensured the future of the company; and second, agreement by management that there would be no redundancies during the validity of the agreement.

However, the economic and labour situation at Sintel continued to deteriorate. While the contacts with the Ministry of Industry continued without effective results, at the end of 1999 the company's workers' committee complained of a lack of information on the economic situation of the company and alleged systematic infringements of the agreement. Industrial relations deteriorated even further due to a perceived lack of transparency on the changes in the composition of the shareholders of the company after the death of the owner of Mas Tec. The committee called for a meeting with the management of the company and the Ministry of Industry to clarify the situation of ownership of the company and the composition of its board of directors, but this meeting failed to materialise.

Dispute

A dispute broke out in March 2000 following the company's failure to pay workers for February and its announcement that 889 workers would be made redundant. The trade unions consider this to be a flagrant infringement of the current collective agreement, in which the company expressly agreed that it would take no "traumatic" measures to reduce the workforce. They also believe that the poor economic situation of the company is due not only to the cutting of orders by Telefónica but also to disastrous management at Sintel.

As a protest measure, the workers' committee called four-hour strikes on two days a week during April, May and June, and repeated its desire to negotiate an industrial plan for the future with the company. However, negotiations with Sintel continued to be deadlocked and the situation became increasingly unsustainable. In June, the company announced a suspension of payments without previously informing the workers' representatives and a protest demonstration by the workforce was reported to have been severely repressed by the police.

This led to a new wave of mobilisations, with wider backing from the trade union federations and a major campaign of protest aimed at the government, parliamentary groups and public opinion. The unions continued to call for government intervention to resolve this dispute and to guarantee jobs and the future of the company.

Government intervention

The dispute began to be resolved at the beginning of September 2000, when the Directorate-General of Labour backed the Sintel workers' committee and refused to authorise the redundancy procedures because there were no organisational, economic or production reasons to justify them.

Shortly afterwards, the Minister of Science and Technology agreed to meet the general secretaries of CC.OO's Mining and Metalworking Federation (Federación Minerometalúrgica) and UGT's Federation of Metalworking, Construction and Allied Sectors (Federación Metal, Construcción y Afines) to deal with the situation at the company. At this meeting, the trade unions called for the immediate payment of four months' unpaid wages, clarification of the ownership of the company and negotiation of an industrial plan to guarantee jobs and the future of the company. It was agreed to set up a bargaining commission involving the Ministry of Science and Technology, the management of Sintel and the workers' representatives, which met for the first time a few days later. The Ministry of Science and Technology also agreed to make contacts with Telefónica to ask it to pay its debt to Sintel so that the wages could be paid. Meanwhile, the workers' committee of Sintel called a new series of stoppages and demonstrations.

Commentary

It is a positive step that the government has intervened in the conflict through the Ministry of Science and Technology and has set up a tripartite bargaining commission to seek a negotiated resolution is positive. This intervention is justified by the gravity of the dispute and by the fact that it arose from the privatisation of Telefónica and its subsidiaries. However, it has come at a time when the economic and labour situation of Sintel has greatly deteriorated and after several months of mobilisations. The dispute has had a very high cost up to now for the workers, who have been faced with unpaid wages, the threat of dismissals and uncertainty on the viability of the company. The government could perhaps have taken action before the situation had deteriorated so far. (María Caprile, CIREM Foundation)