Railway redundancies could lead to major strike

In August 2003, the Romanian Ministry of Transport, Construction and Tourism announced that restructuring of the railway system would result in a workforce reduction of 19,000 by the end of September. Opposed to such a sharp and rapid cut in jobs, trade unions held a two-hour warning strike and threatened a general rail strike.

In early August 2003, Miron Mitrea, the Minister of Transport, Construction and Tourism, announced a restructuring of the national railway system, stating that this would result in the redundancy of 19,000 employees of the public rail companies by 30 September 2003. Trade unions reacted promptly, considering unacceptable both the size of workforce reduction and the short timescale for implementing it. They argued that a rail transport strategy agreed by the government and social partners in 2001 provides that jobs are to be cut over a 13-year period, following a major modernisation of infrastructure.

The trade unions announced a two-hour warning strike and threatened a general rail strike. Several rounds of negotiation were held between the unions and the employer-side signatories of the rail sector collective agreement, but no deal emerged, with the unions refusing to accept a workforce reduction greater than 10,000 in 2003. The government maintained its position in respect to the job cuts, arguing that: rail traffic has fallen to around one-third of 1990 levels, while the workforce is still over 40% of the 1990 level; and future European integration and agreements with the International Monetary Fund require a profound restructuring process of the railway system as a whole, which can not be undertaken under current staffing conditions.

The warning strike took place on 28 August 2003, between 07.00 an 09.00, halting all railway traffic. On 1 September, a new round of negotiations occurred between representatives of the Ministry of Transport, Construction and Tourism (Ministerul Transporturilor, Constructiilor si Turismului, MTCT) and the trade unions. The balance of power seemed to be in favour of the government, as the two-hour strike did not generate a reaction of support from the general public, which had to face inconvenience and delays. During the discussions, the parties agreed on the majority of issues relating to the restructuring of the rail system, such as changes in organisation, management and privatisation. As far as workforce reductions are concerned, the following new figures - not agreed with the unions - emerged:

  • a total cut of 15,701 jobs through redundancies, of which 10,501 will affect the three most important public rail companies and 5,200 their subsidiary units; and
  • the public rail companies' workforce will be cut by a further 4,109 by means of spinning off several subsidiary activities. For this purpose, a rapid privatisation will take place under the terms of an emergency ordinance the government will issue during September.

In accordance with present legal framework, each redundant worker will receive two months' pay as compensation immediately after termination of contract and, during the following 20-24 months, a combined income of up to the national average wage, derived from unemployment benefits (75% of the national minimum wage) and complementary benefits (the amount of which depends on the duration of previous employment). MTCT has stated that actual number of redundancies will be lower, as retirement will be mandatory for all redundant railworkers who will become eligible for a pension in the following year. This is a source of anxiety for the employees concerned, because normally those retiring will receive only the two months' pay compensation, being excluded from the other benefits.

Trade unions still disagree with redundancy figures, but there was little time for them to prepare a general rail strike before 15 September, when the workforce-reduction process was due to be launched. In their opinion, such a sharp decrease in the workforce may result in rail safety problems if the infrastructure remains in its current state. They also argue that wage costs - which represent between 25% and 40% of expenditure in the various public railway companies - are not the only or most important issue to be addressed during restructuring and that, in order to manage the rail companies' current financial difficulties, the focus should be on other costs, such as a rise in energy prices of about 17.5% in September

In early September, there is still uncertainty if a general rail strike will occur. The rail companies have drawn up lists of the workers to be made redundant and have already received requests to be made redundant from some employees, who have been attracted by the level of income provided in the event of redundancy. This is another obstacle that the trade unions will have to deal with in organising a strike.

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment