In early November 2009, trade union leaders operating at the Prague Public Transport Company – one of the biggest transport companies in the Czech Republic – agreed to prepare a strike declaration. The trade unions criticised shortcomings in the transport company’s financing by Prague City Hall and disagreed with the planned dismissal of workers along with wage reduction measures. In the end, however, the strike was averted following the conclusion of an agreement.
Poor financial standing of company
At the end of September 2009, the Prague Public Transport Company (Dopravní podnik hlavního města Prahy, DPP) reported a loss of CZK 2.34 billion (about €90.3 million as at 3 February 2010). While the company has shown a higher output, the volume of subsidies received from Prague City Hall (Magistrát hlavního města Prahy) has been decreasing each year. In 2007, Prague City Hall earmarked CZK 14.7 billion (€567.4 million) for DPP; in 2009, subsidies should have amounted to CZK 9.1 billion (€351 million), however the city hall only granted CZK 7.2 billion (EUR 278 million) to the company.
Austerity measures at DPP
In previous years, the introduction of austerity measures has resulted in job losses for more than 1,000 employees at DPP. From January to the end of September 2009, DPP employed 11,426 people, which represents a decline of almost 1.5% in an interannual comparison (see also the European Restructuring Monitor (ERM) 2007 fact sheet and 2009 fact sheet). The potential for further dismissals has been discussed by the DPP’s management and the trade unions.
Prague City Hall pressed for another radical cost reduction initiative – especially in the area of bus operations. The Mayor of Prague, Pavel Bém, suggested that the company management should cut their salaries by 30% and by 7% for other staff. Meanwhile, Prague City Hall refused to allocate additional funds to cover operating costs at the company.
Trade unions threaten strike action
Trade unions supported the requirement made by the management of DPP for an additional allocation of CZK 1.9 billion (€73.3 million) for its operating costs. In their declaration, the unions also strongly opposed the continuation of all current outsourcing projects, along with further mass dismissals and wage reduction measures. To highlight their demands, all of the 13 trade union organisations operating at DPP decided to establish a strike committee and prepare a declaration of indefinite strike action. The proposed strike was directed at Prague city councillors rather than the transport company’s management. As the trade union leaders underlined: ‘Employees cannot assume responsibility for low-quality work of the order party prescribing the volume of transport.’
The demands of the DPP trade unions were supported by the country’s largest national trade union confederation the Czech-Moravian Confederation of Trade Unions (Českomoravská konfederace odborových svazů, ČMKOS), which was also joined by the sectoral-oriented Coalition of Transport Trade Unions (Koalice dopravních odborových svazů). The trade unions appealed to all transport company employees not to be manipulated into breaking the strike. In the event of a strike, Prague City Hall would be unlikely to be able to maintain operations during the stoppage, even if it sought the support of the Central Bohemian transport companies. Regardless of the capacity of the Prague underground, DPP has about 1,200 buses and 900 trams available, which cannot be matched by any other Czech transport company. The city could probably only secure temporary operations on the most heavily used bus lines. A subsequent collapse of the transport network would stop supplies and severely hinder the operation of companies and institutions, therefore effectively paralysing life in the capital city.
Talks end in agreement
During a series of, often dramatic, talks between the trade unions and Prague City Hall, the strike committee on behalf of the trade unions and a crisis management team established by the Mayor of Prague expressed their willingness to reach a compromise. In the end, Prague councillors agreed to pay an advance supplementary subsidy to cover the needs of DPP and to terminate outsourcing, while the trade unions agreed to austerity measures regarding wages and employment.
The amicable settlement was enhanced by the conclusion of a collective agreement at DPP, following more than three months of collective bargaining. Under the collective agreement, which is valid for three years, free transport tickets are to be preserved for employees and their family members. On the whole, however, the agreement will result in a wage freeze and a reduction in social benefit expenditure. Apart from representatives of the contracting parties, Mayor Bém was also present at the signing of the agreement.
Jaroslav Hála, Research Institute for Labour and Social Affairs (RILSA)