Social partners evaluate role of mediation and arbitration service

At an international conference marking the tenth anniversary of the Hungarian Labour Mediation and Arbitration Service (MKDSZ), the social partners voiced their opinions and expectations of the service. It emerged that employers are interested in reducing the costs of labour disputes, while trade unions consider that the future role of the MKDSZ should be to prevent disputes. Both parties also highlighted obstacles to conflict resolution through mediation.

As part of the tenth anniversary celebrations of the Hungarian Labour Mediation and Arbitration Service (Munkaügyi Közvetítoi és Döntobírói Szolgálat, MKDSZ), the social partners were invited to give their opinion and expectations of the service.

Industrial relations experts consider the usage rate of the MKDSZ to be low compared with the rate of labour disputes that is likely to emerge (see Hungarian contribution (65Kb MS Word doc) to EIRO thematic feature on Collective dispute resolution in an enlarged European Union).

Trade union view

The President of the National Association of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége, MSZOSZ), Péter Pataky, identified several obstacles to effective mediation. In practice, collective disputes can easily develop into individual disagreements, which cannot be handled by the MKDSZ. Inconsistent information between parties is common and their interpretation of the law can differ, for example in the case of collective redundancy. Parties generally wish to resolve their own disputes in order to demonstrate their strength. In the Hungarian context of a pluralistic union system, disagreements between members of different unions can also make it difficult to resolve disputes.

A further problem relates to the fact that legal regulations concerning mediation do not suit multinational companies – one of the main employers today – as the Labour Code is tailored for companies with a single proprietor or a single site. Consequently, local executives may not have the competence to make decisions and, in such a situation, the MKDSZ has no mediation instruments at its disposal either.

Moreover, parties often have prejudices about mediators, considering them to be outsiders and unfamiliar with the situation; therefore, they tend not to trust mediators, nor do they attribute much professional competence to them. Mr Pataky concluded that there is no need for arbitration services, as they are alien to Hungarian traditions. Instead, he envisages an enhanced advisory, information and supportive role for the MKDSZ, aimed at preventing conflicts.

According to József Kemecsei, representing the Federation of Building, Wood and Material Workers’ Unions (Építo, Fa- és Építoanyagipari Dolgozók Szakszervezeteinek Szövetsége, ÉFÉDOSZSZ), the role of the MKDSZ should be to provide legal counselling and conflict prevention services. The Secretary General of the Trade Union of Hungarian Civil Servants and Public Service Employees (Magyar Köztisztviselok és Közalkalmazottak Szakszervezete, MKKSZ), József Fehér, supports the service’s move towards individual cases and called for clarification on the required qualifications for mediators.

Employers’ view

The Secretary General of the National Association of Entrepreneurs and Employers (Vállalkozók és Munkáltatók Országos Szövetsége, VOSZ), Ferenc Dávid, highlighted that employers do not support the idea of obligatory mediation that had previously been proposed by mediation professionals and trade unions. He explained that introducing a legal obligation to this effect would be in vain, as employers unwilling to conclude an agreement in the event of a conflict would find a way to evade this obligation. Mr Dávid noted that, contrary to expectations, the operation of the MKDSZ is not profitable either for users of the service or for the mediators, which in his view explains the low usage rate.

As maintaining a good reputation is of the utmost importance to companies, Mr Dávid continued, employers should strive to prevent an escalation of disputes as much as possible. He called for the MKDSZ to adopt an advisory role on the elimination or reduction of costs (in the range of millions of euro) related to working hours lost during strikes and other reasons. The secretary general also suggested that the MKDSZ should make an agreement with employer organisations, as the latter would be in a better position to recommend its activities to their members more effectively than the MKDSZ itself. He underlined that the mediators of MKDSZ are professionally committed and that no charges were being made against them on the grounds of breaching the code of conduct.

Human Resource Manager of Hungarian State Railways (Magyar Államvasutak, MÁV), Flórian Kugler, added that employers are not interested in making a dispute public, as the evaluation of management in a conflict situation is always negative. In his view, the presence of a mediator often has an impact on the behaviour of employers; trade union representatives, on the other hand, often engage in conflict situations in order to be the protagonists of their own case, when the involvement of a mediator might not be necessary.

Furthermore, the Human Resource Manager of Hungarian Post (Magyar Posta), Tamás Potykiewicz, agreed with the trade unions in relation to the claim that multinational companies are hard to access. While they seemingly accept the unions’ presence, he claimed, complaints filed to headquarters are sanctioned by local managers. He suggested that it would be useful if the MKDSZ had direct access to the registry database of collective agreements, handled by the Ministry of Social Affairs and Labour (Szociális és Munkaügyi Minisztérium, SZMM).

Wider role for MKDSZ

Labour Inspector János Nagymihály highlighted a significant problem: the MKDSZ only has access to large organisations where trade unions are present, even though a substantial proportion of individual disputes are emerging in small and medium-sized enterprises (SMEs). He added that the only remedy for this situation would be to improve employees’ awareness of labour law issues, which might be raised if mediation cases received more publicity.

The social partners generally agreed that the scope of the MKDSZ’s activities could be expanded if the service was also allowed to deal with individual disputes, and if it was given an enhanced advisory role. They called for more effective legal regulation and for better promotion of the service. The trade unions are demanding obligatory mediation in certain types of disputes; however, the employers are resolutely opposed to this.

According to the recommendation accepted at the conference, parties involved in a dispute should inform the MKDSZ about their collective bargaining developments. At the same time, dissemination of information about conciliation, mediation and arbitration should be more effective. The participants agreed that the legal regulation concerning the operation of the MKDSZ needs to be clarified; this should include specifying the individual cases in which the MKDSZ is authorised to act, together with supplementing public sector laws to regulate proceedings of conciliation, mediation and arbitration.

Gabriella Lovász, King Sigismund College and László Neumann, Institute of Political Science, Hungarian Academy of Sciences

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