Strike averted in Budapest public transport

In February 2005, following lengthy bargaining and the threat of a strike, the Budapest Transport Company (BKV) and five trade unions reached a pay agreement. In 2005, the workforce will receive a flat-rate wage increase, worth about 8% on average but more than 10% for low-paid workers.

On 10 February 2005, following three weeks of unsuccessful bargaining on the annual wage increase, the five trade unions operating at the Budapest Transport Company (Budapesti Közlekedési Vállalat, BKV), representing almost 90% of the 12,600 employees, decided to hold a strike on 15 February. The unions set up a strike committee and the company started preparations for the half-day long strike that would paralyse the whole capital city, which is badly served by road and rail transport facilities. Although strike threats at BKV are not unprecedented, this was the first time that the five unions had acted in full agreement and a written strike call was issued .

The main objective of the trade unions in the 2005 bargaining round was to diminish wage differentials among employees, which they claimed had grown sharply in recent years. Unions demanded a flat-rate HUF 19,000 (EUR 80) gross increase in monthly pay rather than a percentage rise, which would raise wages by over 10% in low-paid categories and by 5% in higher-paid ones. The management, reminding unions of the HUF 10 billion debt of the company, initially offered a HUF 11,000 monthly increase only, which meant 6% on average, in line with the nationwide recommendation of the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT) (HU0501102N). In contrast to the unions’ position, the company wanted to implement a differentiated rate of increase instead of a flat-rate one.

In the meantime, the Budapest Labour Court (Fővárosi Munkaügyi Bíróság) issued a ruling that the proposed strike was lawful. The Strike Law, however, requires the parties to agree on the exact definition of minimum services to be provided during the strike. The lack of such an agreement added fuel to the conflict. While the company insisted on running at least 50% of the services, the unions rejected the idea on grounds of safety regulations and proposed to maintain only a few special bus services for people with disabilities.

Interestingly, Hungary's highly polarised party politics also sharpened the wage conflict. As BKV is owned and mainly financed by the municipality of the capital city, which is dominated by the socialist-liberal coalition parties, the right-wing opposition Alliance of Young Democrats-Hungarian Civic Party (Fiatal Demokraták Szövetsége-Magyar Polgári Szövetség, FIDESZ-MPSZ) took the opportunity to attack the mayor of Budapest, a prominent politician in the Alliance of Free Democrats (Szabad Demokraták Szövetsége, SZDSZ) coalition party.

Both the management and the unions made incremental concessions in the course of negotiations that lasted until early morning on 14 February, when the parties reached agreement on a HUF 16,000 flat-rate gross monthly wage rise, which means an approximately 8% wage increase on average, but more than 10% for low-paid workers. Management said that the agreement adds HUF 400 million to the expected costs of the wage rises planned for 2005, and the expected resulting cost-saving measures would include freezing the salaries of 150 managers at the company.