Trade unions mobilise opposition to government reforms

Government legislation on a unitary pay system for public employees and on the reorganisation of public authorities and institutions, enacted in the autumn of 2009, was criticised for its unclear or conflicting provisions. In an attempt to clarify the situation, the government issued more regulations. However, these have only fuelled trade union protests, leading to concerted action by all of the country’s five national trade union confederations.

Impact of economic crisis

In 2008, a year of significant economic growth, when gross domestic product (GDP) rose by 7.1% from 2007, the average national monthly gross salary increased by about 18% in real terms. The parliamentary elections of 2008 somehow obscured the economic and financial crisis until it became obvious in the fourth quarter of that year. By the end of 2008, a budget deficit of 5.4% of GDP was recorded, and the forecasts for 2009 were alarming, mirroring the downward trend of the economy.

As a result, Romania was forced to ask for assistance, which it received from the International Monetary Fund (IMF), the World Bank and the European Commission in the form of an aggregate support package of about €20 billion. The loan agreement set the budget deficit target for 2009 at 7.2%. However, throughout 2009, economic indicators continued to plummet and, by the end of the first three quarters, the country’s GDP had dropped by 7.4% compared with the reference period of 2008.

Under the circumstances, the Romanian government (Guvernul României, GR) assumed responsibility for two pieces of legislation:

• the framework law on the unitary pay system for public sector employees (Law No. 330/2009);

• the law regarding the reorganisation of some of the public authorities and institutions, the rationalisation of public spending, the development of the business environment, and compliance with the framework agreement with the European Commission and the IMF (Law No. 329/2009).

Framework law on unitary pay system

For several years, the social partners had been demanding uniform criteria regarding the pay grid for the public sector; as a result, they were supportive of the government’s initiative (RO0912019I). The law on the unitary pay system for employees paid from public funds provides for a period of transition until 2015 and guarantees that no public employee may be paid below their December 2009 salary.

After the law was enacted, trade unions in the public sector expressed their dissatisfaction regarding the placing assigned to various groups of employees in the salary grids amended at the close of the negotiations.

To supplement this law, the government also issued an emergency ordinance (No. 114/2009), not only reducing the number of personnel in various public institutions but also eliminating concessions such as meal coupons, holiday tickets and gift tickets (RO1001019I).

Reorganisation of public authorities and institutions

For the application of the law regarding the reorganisation of public authorities and institutions, the government issued Emergency Ordinance No. 1/2010 regarding the repositioning of certain jobs in the public sector, the payment thereof and other budget-related measures. This ordinance sought to fill certain gaps in the two laws, which became visible when applied in practice and which were duly signalled by the trade unions.

In addition to this ordinance, the government also drafted a bill regarding the personnel standards for Romania’s administrative subdivisions and the public entities under their authority. The new personnel standards proposed by the draft will result in the layoff of some 17,000 employees. The government also issued decisions that set standard costs and ceilings for public services, health services, social services and pre-academic education, which, in practice, will translate into some 20,000 redundancies.

Public pension reform

The loan arrangements demanding a certain budget deficit target also involve the public pension system. Under the current legislation, the pension system is becoming unsustainable due to the imbalance between social security contributions and the current pension payroll.

To address this issue, the government drafted a new public pension bill, providing for the extension and equalisation of the retirement age for men and women. The reform also modifies the calculation basis by removing the salary extras for which the new law on the unitary pay system has provided.

The trade unions warn that the new bill may lead to discrimination between various segments of employees, and various groups of retirees.

Trade unions mount strong opposition

Romania’s public sector employs between 25% and 30% of all workers in the national economy. In 2009, the most vocal trade union structures were the Budgetary Sector National Trade Unions Alliance Sed Lex (Alianţa Naţională a Sindicatelor Bugetarilor Sed Lex, Alianţa Sed Lex) and the trade union federations representing education workers (RO1001019I). In their protest against the new regulations, they were subsequently joined by trade unions from administration, healthcare, justice and the police.

Until the enactment of the two laws, the various trade union organisations were acting independently. However, after the two laws took effect, the unions started coordinating their actions, and some of them even coalesced to form a new organisation – namely, the Alliance of Budgetary Employees (Alianţa Bugetarilor, AB) (RO0912029I).

At the beginning of 2010, the National Trade Union Federation of Civil Servants (Federaţia Naţională a Sindicatelor din Administraţie, FNSA) – which counts over 50,000 members and is affiliated to the National Trade Union Confederation Cartel Alfa (Confederaţia Naţională Sindicală Cartel Alfa, CNS Cartel Alfa), which also confirmed its support – became the most active, issuing warnings and calling a warning strike on 2 February 2010. Although the general strike due for 12 February 2010 was called off, the signatures obtained for it are still valid.

The National Trade Union Bloc (Blocul Naţional Sindical, BNS), another national trade union confederation, includes among its members the Trade Union Federation from Public Administration Publisind (Federaţia Sindicatelor din Administraţia Publică Publisind, Publisind). The latter announced its plans to set up the Trade Union of Redundant Workers from Romania ‘New Chance’ (Sindicatul Disponibilizaţilor din România ‘Noua Şansă’).

The National Confederation of Free Trade Unions from Romania Frăţia (Confederaţia Naţională a Sindicatelor Libere din România Frăţia, CNSLR Frăţia), which has under its umbrella the Sanitas Trade Union Federation (Federaţia Sanitas) representing healthcare workers, also threatened protest actions against the layoffs and called on other confederations to join them.

Meanwhile, the Meridian National Trade Union Confederation (Confederaţia Sindicală Naţională Meridian, CSN Meridian), which includes trade union structures representing local public administration and the police, expressed its dissatisfaction at the way in which the government seeks the opinion of the unions on the legislation it adopts. The federation promised to proceed with specific forms of protest action. The same intentions were declared by the Confederation of Democratic Trade Unions in Romania (Confederaţia Sindicatelor Democratice din România, CSDR).

Main trade union demands

Despite certain differences between trade union claims due to the particularities of each organisation, on the whole they made the following demands:

• respect for social dialogue and concerted efforts to this end;

• eliminating from the legislation restrictions on the freedom of collective bargaining, as provided for by Convention 98 of the International Labour Organization (ILO) on the right to organise and collective bargaining;

• abolishing measures such as flat-rate, unnegotiated pay for public employees, which render collective bargaining futile;

• the payment of overtime work that cannot be compensated by time off;

• revising pay grids in accordance with the principles of Law No. 330/2009, and safeguarding the requirement that no employee should lose rights already gained, or see their income reduced as a result of the new regulations;

• reversing the abolition/suspension of meal coupons, gift tickets and holiday tickets;

• introducing mechanisms to regulate employee incentive schemes from own funds;

• joint renegotiation of the salary extras scheme, and the reintroduction of the bonus for holders of doctorate (PhD) degrees;

• preventing staff layoffs or creating a severance pay mechanism where layoffs are unavoidable;

• respect for the principle of local or regional autonomy, and grading local administration staff based on fair criteria;

• unfreezing any vacant positions in understaffed sectors, such as education, healthcare and the police;

• creating an equitable pension system.

In addition, the joint action plan announced by CNS Cartel Alfa includes measures to:

• set up monitoring commissions to verify the application of the uniform pay act during the entire transition period (up until 2015);

• assist trade union members to pursue their rights in court, and further refer cases to the ILO when such rights are recognised in court but not granted;

• picket the offices of prefectures and ministries;

• organise rallies in the capital city of Bucharest and in the counties;

• evaluate results, stage warning strikes and hold a general strike in May 2010.

Commentary

One of the omissions in the legislation package adopted by the government, which has been criticised widely, concerns the continued force and effect of the current collective agreements, which are due to expire after the effective date of the law, and the preservation of the constitutional right to renegotiate them afterwards. Therefore, the two framework laws and the regulatory legislation complementing them may not apply in practice with effect from 1 January 2010, as stipulated therein. The simultaneous application of the two laws, which is to be done under the surveillance of the IMF evaluation mission, may not lead to errors or generate violations of ascertained rights.

Public sector trade unions have impressive membership levels; they also comprise experts who not only have a good knowledge of the legislation enacted by the government but are also bound to apply it correctly. Although private sector trade unions have remained silent in relation to these latest reforms, should the economy fail to recover, their involvement could cause social tensions to reach the critical mass.

Luminiţa Chivu, Institute of National Economy, Romanian Academy