EurWORK European Observatory of Working Life

Wage agreement at Hungarian Post averts planned strike action

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An agreement on wage developments for 2008 between the biggest state-owned company, Hungarian Post, and the trade unions was finalised the day before strike action was due to take place. The government used the agreement reached at Hungarian Post to facilitate consensus among social partners at the National Interest Reconciliation Council on recommendations for annual wage increases; it also served as a benchmark for national-level negotiations.

Details of agreement

On 13 December 2007, the 2008 wage agreement for postal workers was concluded as a result of the National Property Management Council (Nemzeti Vagyongazdálkodási Tanács, NVT), a public body exercising ownership rights over Hungarian Post (Magyar Posta, MP), accepting the company’s business plan for 2008.

The deal brokered between MP and the company’s 38,621 employees provided for an average pay rise of 7.5% for 2008; this represents the fourth successive year in the history of MP that annual wage negotiations have been successful. The 2008 wage increase will result in a higher percentage of pay for low-paid workers – a 10% pay rise for the two lowest earning groups – and a smaller (5%) rise for the highest earning group. The agreement also stipulated an increase in the quality bonus that workers may receive for improving the standard of postal services, along with showing initiative in their work or giving an outstanding performance in selling other related services, such as insurance schemes or lottery tickets. Agreement had also been reached previously on increasing the annual value of the cafeteria allowances, including for instance meal and internet vouchers, and support for workers with children starting school, from HUF 160,000 (about €618 as at 23 January 2008) to HUF 190,000 (€734).

Interestingly, the agreement replicates exactly the conditions agreed a year before – a 7.5% average salary increase and a rise of HUF 30,000 (€116) in the value of the extra-wage allowance.

Position of trade unions

The agreement was signed by seven out of nine trade unions representing workers at MP, which included the two main representative unions: the Postal Trade Union (Postások Szakszervezete, PSZ), affiliated to the National Association of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége, MSZOSZ), and the Independent Trade Union of Postal Workers (Postások Független Szakszervezete, POFÜSZ), affiliated to the National Federation of Works Councils (Munkástanácsok Országos Szövetsége, MOSZ) (see also the Hungarian contribution to the EIRO comparative study on Industrial relations in the postal sector). The seven signatory trade unions altogether cover 99% of all postal workers in Hungary. The two trade unions that did not sign the agreement were the Trade Union of Delivery Workers (Kézbesitők Szakszervezete, KÉSZ), the youngest postal trade union, and the Postal Interest Protection ‘92 (Postai Érdekvédelem ‘92, PÉV92), representing 300 and 200 workers, respectively.

Strike against low wages of delivery workers

The postal sector, unlike other strategic sectors of the Hungarian economy, is virtually free from strikes. Notwithstanding, on the morning of 16 November 2007, KÉSZ organised a one-hour warning strike to highlight the low wages of postal delivery workers who may be paid as little as HUF 80,000 (€309) a month before taxation, even after counting several years of service to the company. However, the national media, just like MP itself, downplayed the relevance of the strike action. As a result, KÉSZ embarked on organising another strike for 18 December 2007, pushing for a 30% pay rise for all postal delivery workers. A wage agreement was finally signed by the majority of trade unions in the postal sector, including PSZ and POFÜSZ. Consequently, KÉSZ had no choice but to call off the strike and accept the verbal promise from directors of MP that, during the first quarter of 2008, negotiations on the wage demands made by KÉSZ would continue.

Commentary

At the same time, difficult and lengthy wage negotiations were taking place at the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT) in relation to recommendations for annual wage increases. Compared with previous years, the social partners did not reach agreement until 21 December 2007, when they finally accepted a 5%–7.5% increase as the recommended range for lower-level wage settings. The agreement reached between the biggest state-owned employer, MP, and its workforce only days earlier could be interpreted in two ways. First, the government was able to convince the main social partner organisations to come to an agreement by allowing the management of MP to make some concession for the trade unions. Therefore, the agreement in the postal sector somehow sets a benchmark for national negotiations by helping to push higher employers’ wage offers and to lower employee demands. Secondly, postal workers will get the highest recommended wage rise in the state-owned sector in 2008.

Márk Edelényi and László Neumann, Institute for Political Science, Hungarian Academy of Sciences

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