Dispute at Tudor over dual pay scale

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Workers at SEA Tudor, a Spanish subsidiary of the US-based multinational EXIDE, have been holding intermittent strikes in February 2000 to put pressure on management to modify the "dual pay scale" agreed in 1996, whereby new recruits receive 30% less pay than existing workers in the same jobs. The workforce want to abolish this scheme now that the company is making profits, and the actions are planned to continue until June if there is no movement from management.

Sociedad Española del Acumulador Tudor SA (SEA Tudor), part of the Tudor group, produces batteries and markets coils, spark-plugs, filters, lamps and shock-absorbers, mainly for the automobile industry, at six sites located in various parts of central Spain (Guadalajara, Zaragoza, Madrid, Ciudad Real and Soria). It has a total workforce of around 1,700 workers, represented by three trade unions: CC.OO, which is the majority union, UGT and the independent ASIT.

The context of the dual pay scale

In the early 1990s, the Tudor group went through a serious crisis involving major losses and redundancies and its sale to the USA-based multinational EXIDE. At the same time, EXIDE bought other important companies in the batteries sector in Europe and undertook a restructuring of the business that has involved the closure of most of its European factories (in countries such as France, Belgium and Sweden).

In this context, and under the threat of relocation, the management put pressure on the workers' representatives at SEA Tudor to accept concessions which, it was claimed, made workers bear the cost of the economic crisis in the company's Spanish operations. Among other aspects, a collective agreement signed in 1996 included a loss in purchasing power for employees, through wage rises far below the increase in the retail prices index, and a "dual pay scale" (doble escala salarial) - a scheme whereby employers may recruit workers at lower wages than workers in the same job grade who are already employed by the firm - based on the establishment of a new category ("specialist C") for new recruits, whose basic wages would be 30% lower than normal. In exchange, the management agreed to: site its industrial production in Spain; set up a plan for an increase in production involving job creation (although no percentage was established); and, over a five-year period (the duration of the agreement), convert 25% of temporary contracts into permanent ones, at a rate of 5% per year. As a result of these agreements, over the past three years there have been no job losses at SEA Tudor: In fact jobs have been created and the agreed conversion of temporary jobs into permanent ones has been carried out. However, the employees recruited to work in direct production since 1996 (around 345) receive about 30% less than their colleagues with more seniority performing the same jobs, even though the trade unions claim that "a worker becomes productive 15 days after joining the company".

This situation is not new in Spain: the dual pay scale proliferated during the 1990s in several forms (ES9705209F). The defence of employment has been, and still is, an objective for Spanish trade unions at all the levels of bargaining in which they participate. In the face of the possible loss of jobs, the evident inequality of the dual pay scale offers advantages: it is better to have a job with a lower wage that no job at all. This situation explains to a certain extent why workers' representatives have accepted agreements that go against the right to equality (in that unequal conditions are agreed for performing the same work) by transforming the date of starting employment at a company into a reason for pay discrimination.

Mobilising against the dual pay scale

At present, SEA Tudor no longer shows losses, and in the past two years it has recorded considerable profits: in 1999, with sales of ESP 37,130 million, it achieved a profit of ESP 3,355 million. This represents a 16.3% increase over the previous year, in which it showed a profit of ESP 2,884 million. The workers' representatives consider that in this situation of high profits the dual pay scale is no longer justified, so they have asked the management to abolish it. The management not only refuses to abolish it, but also refuses to promote the workers concerned, which is the only way for them to earn the same wages for the same work: no time limit was agreed for the dual pay scale, nor were control mechanisms established to force the company to pay equal wages when the situation justifying the dual pay scale changed.

In response to the management's refusal to negotiate, the trade unions decided jointly to call mobilisations. On 12 November 1999 a demonstration of delegates was organised in front of the the company's headquarters in Madrid. The workforce, including the newly recruited workers and those with more seniority, agreed to put pressure on the company through open conflict: a one-day strike was called at all sites on 26 November. It was widely supported by the workforce (around 90% of the workers went on strike according to union sources), who thus showed their solidarity with the new workers.

A new round of negotiations between the workers' representatives and the management showed no results. After mediation without agreement on 20 January 2000, intermittent mobilisations were called for the period between February and June. The one-hour stoppages called during February (on 3, 10 and 17 February) received wide support.

At the time of writing (late February 2000) the management is maintaining an unbending attitude, and is not willing to modify its wage costs. Workers' representatives claim that management constantly uses the threat of relocation, and allegedly shows an attitude of "absolute scorn" toward the workers' representatives. For its part, the workforce plans to continue the mobilisations: a strike will be held on 14 and 15 March; if there are no results, two-hour stoppages will be held on 5 and 12 April and 11 and 18 May; and if the position of the company still remains unchanged, strikes will be held on 21, 22 and 23 June .

Commentary

To agree a dual pay scale (especially one without controls or time limits) entails serious dangers for trade union action. It involves the consolidation of an increasing segmentation of the labour market that divides workers. More important still, it questions the principle of solidarity that has traditionally characterised trade union action. Therefore, when there is no alternative to accepting part of the burden of a company's crisis, perhaps it would be more advisable to seek formulae involving an equal allotment between all workers. Perhaps, instead of accepting the dual pay scale, the unions could have tried to manage the paybill, effecting an equal distribution of the wage cuts that EXIDE demanded in order for Tudor to remain in business.

Now the situation in SEA Tudor is different. Under the banner of solidarity, the workers are fighting persistently to obtain improvements for their colleagues with less seniority. The problem is that the workers of SEA Tudor are fighting against a multinational, EXIDE, which will encounter no obstacles if at any time it decides to leave Spain because the profits obtained are insufficient. Industrial action company by company must, in the view of the author, be accompanied by another type of action that brings together all workers (and not only in one country), citizens and governments in order to recover the power to regulate the economy and to place some restraint on the accumulation of profits that is encouraged by the prevalent logic of the market (Clara Llorens Serrano, QUIT-UAB).

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