Three-way dispute on Austrian railways

Staff reductions and investment priorities at Austrian Federal Railways sparked a new dispute between management, the trade union and the government in September 1998. An effort is being made to contain and de-escalate the dispute, which follows on the heel of rail union discontent over pension reform and unemployment insurance obligations.

On 16 September 1998 a new dispute broke out on the state-owned Austrian Federal Railways (Österreichische Bundesbahnen, ÖBB). The Union of Railway Employees (Gewerkschaft der Eisenbahner) went public with demands aimed at halting staff reductions and at promoting massive investment in rolling stock. The ÖBB currently employs under 54,000 workers, down from an annual average of 56,000 in 1997. This is 1,000 fewer than originally planned. Labour costs in 1997 were ATS 1.2 billion less than in 1996.

Two plans exist. One, agreed by the board, is to reduce employment to 50,000 by 2002. The other, based on recommendations by external consultants, is to reduce it to 44,000 by cutting staff by between 25% and 30% across all business divisions. Either way, there would be no redundancies. Management is driven by the need to be competitive on a European level on the eve of market liberalisation. The trade union acknowledges the need to cut costs. Its opposition, as in the case of the Post Office (AT9806196N), stems from the pace of staff reductions and at the lack of compensatory measures that would reduce actual workloads. Instead, claims the union, investment in rolling stock has also been cut, and this has led to an ageing fleet of engines and carriages requiring a rapidly increasing amount of working hours to be spent on maintenance and repairs. As a consequence, a leading trade unionist has said, "we will next be charged with having the highest maintenance costs in Europe." More specifically, the union has lodged the following complaints and demands.

• By the end of June 1998, some 3.5 million overtime hours had been amassed during the year, the equivalent of 4,500 jobs.

• The railways lack between 200 and 250 trained engine drivers.

• The dearth of cleaning personnel may in the very near future lead to carriages being cleaned less often.

• Service reductions in the handling of goods that accompany passengers (excess luggage) are imminent.

• 200 new long-haul passenger carriages are required because old stock needs to be replaced and a reserve should be kept.

• 30 or 40 engines for goods operations are needed.

• Management refuses to discuss the issues with the trade union.

After an all-day board meeting of the union on 17 September, these demands were formally reiterated. A deadline was set for 29 September 1998. Thereafter a strike could not be excluded if management continued its intransigence. Passenger traffic would remain unaffected, however. In the past year or so, the railways have also seen disputes over pensions (AT9712152N) and unemployment insurance obligations (AT9709132N).

Management stated that a decision to invest ATS 7 billion in new rolling stock for commuter trains had just been taken. The overtime complaint was described as annoying, since management had made several attempts to deal with the issue only to face opposition from the union on the grounds of loss of pay. In the first half of 1998, ATS 1.9 billion had been paid out for overtime. In 1997 the overtime budget had been exhausted by October.

Government intervention

The government immediately intervened in the dispute. It demanded an expansionary alternative to the current focus on cost cutting. It wants greater attention paid to the opening up of new revenue streams. This drew an angry reaction from management. The ÖBB had paid a dividend of ATS 500 million to the government for 1997, plus the ATS 850 million earned from the sale of its telecommunications operations, plus the ATS 500 million saved in lease-back operations of its goods shunting yards. It claimed that, the government having pocketed all this revenue, it was asking too much for the company also to invest in new operations. The ÖBB in 1998 will also pay about ATS 3.9 billion for the use of the tracks, an increase from about ATS 3.8 billion in 1997.

In order to sort out this three-way dispute, the government called a meeting for 23 September to establish the facts and to urge two parallel plans for the next five years, one focused on raising efficiency and the other on maintaining overall service and business. The meeting was chaired by the Prime Minister. Its basic result was to reduce the acrimony, secure commitment to produce the new plans by December and relaunch negotiations between management and the trade union over how and when to achieve the necessary cost reductions. The weekend of 26-27 September 1998 was to be dedicated to this.

The European level

The government is aware that the railways, having to pay for the use of the track, are not in a competitive position equal with road transport. An attempt to introduce road pricing for trucks in 1996 failed. No new attempt will be made before the 1999 elections. Hopes are now pinned on the European Commission to introduce road pricing. The current Austrian Presidency of the EU is trying to make progress in this respect. There are, so it says, signals from Germany that EU-wide road pricing may become possible from 2001. This is flanked by attempts to achieve a commitment to greater harmonisation of labour rights and standards in transport and of technical norms on the railways. Otherwise, it is feared that up to 300,000 railway employees in the EU will lose their jobs after liberalisation. The railways have already shed 750,000 jobs over the past 15 years.

Commentary

It was an unusual development for an Austrian enterprise, especially for a very large state-owned one, to try and reduce trade union involvement in a major cost-cutting exercise to the formally required minimum. This is essentially what the dispute is about, as were previous conflicts centring on pensions. The railways fight an uphill battle for market share in the transport of goods while there is no known way of making passenger services profitable. At the same time resources for infrastructure improvement and harmonisation, both in the state's budget and at the ÖBB, are strained. The process of preparing the ÖBB for the market will remain a difficult and divisive manoeuvre for the union, for management and for the owner. (August Gächter, IHS)