Government issues draft Social Dialogue Code

In late November 2010, Romania’s Ministry of Labour, Family and Social Protection issued a draft Social Dialogue Code. The draft is intended to overhaul the way social dialogue is currently regulated and relates to the structure and functioning of trade unions and employer organisations, the country’s Economic and Social Council and social dialogue committees, as well as the information and consultation of employees, collective bargaining and labour disputes.

Contents of the Code

The bill for a Social Dialogue Code, posted on the website of the Romanian Ministry of Labour, Family and Social Protection, consists of 10 chapters dedicated to:

• definitions;

• trade unions;

• employer organisations;

• information and consultation of employees;

• the structure and functions of Romania’s Economic and Social Council (CES);

• the appointment and operation of the social dialogue committees in central and local public administration bodies;

• collective bargaining;

• the settlement of labour disputes;

• penalties;

• final provisions.

The draft includes updated versions of a number of existing pieces of legislation, adopted in different contexts and at different times between 1996 and 2009.

New proposals on trade union organisations

The proposed Code overhauls the establishment, structure and management of trade unions, regulated at present by Law No. 54/2003.

The new proposals stipulate that in order to establish a trade union it is necessary to have ‘at least 15 employees from the same unit/company, domain or branch’, compared with ‘at least 15 persons from the same brand or profession’ currently required.

The difference is significant because it denies membership to retired union members as they are no longer ‘employees’.

In the new Code, a new category of union, the professional union, is clearly defined as being formed of members of the same profession working with different employers.

Under the new regulations, individual trade unions would be obliged to transfer 30% of their trade union membership fund to the trade union federation, and 10% of the fund to the national trade union confederation to which the union is affiliated.

Another novelty is that the scheduling of union activities during working hours is now at the discretion of the parties to collective agreements. The current law stipulates that three to five working days a month may be set aside for union activities.

New proposals on employer organisations

The definition of an ‘employer’ has been redefined as any incorporated entity, which excludes self-employed people.

The new law no longer obliges the initiators of new legislation relating to employers’ activities or development/restructuring programmes to obtain the prior consent of the employer organisations. Such consent is presently required under Employers’ Law No. 356/2001.

New regulations on collective bargaining

The new Code proposes a number of changes to Law No. 130/1996 regarding collective agreements. These changes may have a major impact on the activities of the social partners.

The proposals have simply abolished the unique national collective agreement. Collective bargaining is regulated differently for the public and private sectors. The new document provides for company-level, multi-employer, sectoral, occupational and national collective agreements for the private sector, and for the same levels of collective agreement, minus the national one, for the public sector.

Another important modification is the redefinition of economic branches for which collective agreements may be bargained and concluded.

The number of sectors of the national economy has been reduced from 30 to 20, mostly by amalgamating 14 branches of manufacturing industry into a single one called ‘processing industry’.

Under the current law, the number of economic branches for which collective agreements may be concluded between the social partners is left at their discretion. As a rule, they coincide with the sectors in which sectoral federations have been created for both employers and employees.

Besides the reduction in the number of economic branches, the draft Social Dialogue Code proposes new eligibility criteria for representation at company level. A trade union will be deemed representative if the number of its members is equal to at least 50% plus 1 of the total number of the company’s employees (instead of one-third, under the current law).

Although the representative trade union federations may take part in the bargaining on collective agreements if they can prove that their members account for at least 7% of total employees in their particular sector or professional area, a sectoral collective agreement may now only be concluded if the number of members of the signatory trade unions is higher than half of the total number of employees in that particular branch or domain.

In effect, the new regulations compel all trade unions and employer associations to be re-affirmed as representative within six months from the effective date of the Code. While company unions will find it easy to fulfil this condition, federations and national confederations will have a hard time reorganising themselves to align with the new configuration of the economic branches in time.

Bargaining powers will from now on be concentrated and produce their effects particularly at company level.

Social dialogue at national level

The CES is to become a ‘public institution of national interest charged with the creation of the conditions for a civic dialogue between employer associations, trade unions and structured entities of the civil society’. In the legislation in force (Law No. 109/1997), the CES is defined as a ‘tripartite public institution of national interest established for the social dialogue at national level between trade unions, employer organisations and the government’.

In other words, the government is bowing out of the CES, giving up its place to the representatives of civil society entities.

Social partner views

The trade unions, employer organisations and all other interested parties had until 15 January 2011 to propose amendments to the draft Social Dialogue Code.

So far, both the employer organisations and the trade unions have proposed that the laws governing social dialogue be amended as they are, without coalescing them into a single piece of legislation.

In a letter (in Romanian) dated 25 November 2010, the five national trade union confederations reminded the Minister of Labour of their request that:

• a tripartite expert committee should be appointed to examine the amendments proposed for the laws relating to social dialogue;

• based on the committee’s findings, the social partners should be allowed to forward the jointly agreed amendments to the cabinet.

The letter stated:

Unfortunately, the [ministry] totally ignored our request, and … invited us to take part in the session of the social dialogue commission on 26 November 2010, in order to discuss the proposal for a Social Dialogue Code.

The letter also expressed the disagreement of the five trade union confederations with the Social Dialogue Code initiative and their ‘determination to abstain from any action that could render legitimacy, by their mere presence, to unilateral initiatives that blatantly scorn the true values of real social dialogue’.

Prior to this letter, the National Trade Union Confederation Meridian (CSN Meridian) had told the labour minister that the draft Social Dialogue Code was, in its opinion, ‘an expression of the ministry’s inconsistency in its relations with the social partners’ and proof of the ‘ministry’s undeniable impotence to coordinate the amendment of the legislation on social dialogue’.

Commentary

The proposal to integrate the entire body of legislation on social dialogue into a single law apparently seeks to eliminate the pyramid-like system of collective bargaining. This means abolishing the single general national collective agreement enshrining equal rights for all employees, irrespective of sector, professional area and corporate entity, and irrespective of an employee’s trade union membership status.

If the reform is enforced, as the final blow, the national minimum wage will no longer be a standard of reference for the set of rights traditionally negotiated under collective agreements. This will render pointless the tripartite agreement on minimum wage rises for 2008–2014 (RO0808019I).

Constantin Ciutacu, Institute of National Economy, Romanian Academy