The development and current situation of employers’ organisations

During Romania's transition to a market economy, numerous national-level employers' organisations have grown up and in many cases merged or divided, against a background of privatisation and economic restructuring. There are currently 12 organisations regarded as nationally representative, and this fragmentation is regarded by commentators as reducing their power and influence. This article examines the development of employers' organisations and their current situation in 2003.

In this feature, we trace the development of employers' organisations in Romania and examine their current organisation and structure, as well as the legal framework for their activities.

Legal framework

During the period of communist rule from 1948 to 1989, no employers' organisations existed in Romania. After the overthrow of the Ceausescu regime, the employers' organisations that emerged - the first of which was the Romanian National Employers (Patronatul Naţional Român, PNR) - were governed only by a regulation dating back to 1924 (Law No. 21/1924). In 1991, the legal framework was partially adjusted in order to allow the formation of employers' organisations in the then dominant public sector. Government Decision No. 503 thus provided for employers' organisations representing state-run companies (regies autonomes) and fully state-owned companies. As the private sector was still young and privatisation had not been initiated at that time, this initial regulation, though covering only the public sector, assisted the process of building up new industrial relations structures. It was only in 2001 that parliament adopted a comprehensive legal framework for the existence of employers' organisations, in the form of Law No. 356.

The representativeness of employers' organisations is regulated by Law No. 130/1996, amended by Law No. 143/1997 concerning collective agreements. Among other provisions, the latter sets out the conditions for employers' organisations to be considered as nationally representative. These organisations must:

  • have organisational and financial independence;
  • represent employers which operate in at least half of the country’s 42 counties; and
  • represent employers which operate in at least 25% of economic branches (a minimum of eight) and employ at least 10% of all workers.

This law also lays down two representativeness conditions concerning the branch level.

As a result of economic restructuring, over the period 1990-2002, the total number of employees in Romania fell from 8.1 million to 4.6 million. Given the representativeness criteria, in theory any employers' organisations representing employers with at least 460,000 employees could thus be considered a national 'peak' employers' association (see the table below)

As regards the membership of employers' organisations, Law No. 356/2001 stipulates that they should be set up in relation to the activity performed by member employers and organised at the section, division, branch and economy level. At least 15 authorised legal and natural persons may set up an employers' organisation in accordance with the law. An employers' organisation may be formed by at least five companies in branches where they represent 70% of total production. Two or more employers' organisations may set up a union or a federation. Several unions or federations may associate to set up confederations, and the nationally representative confederations may set up, in accordance with the law, a single representation body at national or international level.

By law, no employers' organisation may receive financial support from the government.

Development and current situation

The creation and development of employers' organisations during the transition to the market economy has been difficult. The organisations had to start from nothing as they initially had no resources and lacked specific knowledge. Since privatisation advanced more slowly than anticipated, there were disputes over whether to include only private companies in employers' organisations, or also to involve state-owned companies (represented by their managers). There were also problems caused by adjusting to the new status of employer, and the new organisations faced financial problems, not least because of a lack of tax exemptions.

The role of employers' organisations has arguably not been very significant in some respects as they have undergone reorganisation, division, or merger in the context of the state-owned sector that prevailed until 1997-8, and given the trade unions' wish to negotiate directly with the government (RO0307101F).

At present, there are 12 nationally representative employers' organisations in Romania, as follows:

  • the General Union of Romanian Industrialists - 1903 (Uniunea Generală a Industriaşilor din România 1903, UGIR 1903);
  • the Employer Confederation of Romanian Industry (Confederaţia Patronală din Industria României, CONPIROM);
  • the National Council of Romanian Employers (Consiliul Naţional al Patronatului Român, CoNPR);
  • the National Council of Romanian Small and Medium-sized Enterprises (Consiliul Naţional al Întreprinderilor Private Mici şi Mijlocii din România, CNIPMMR);
  • the General Union of Romanian Industrialists (Uniunea Generală a Industriaşilor din România, UGIR);
  • the National Union of Romanian Employers (Uniunea Naţională a Patronatului Român, UNPR);
  • the National Confederation of Romanian Employers (Confederaţia Naţională a Patronatului Român, CNPR);
  • the Romanian National Employers (Patronatul Naţional Român, PNR);
  • the National Union of Romanian Employers with Private Capital, recently renamed Romanian Employers (Uniunea Naţională a Patronatelor cu Capital Privat din România - Patronatul Roman, UNPCPR - PR);
  • the VITAL Confederation (Confederaţia VITAL);
  • the Romanian Association of Building Entrepreneurs (Asociaţia Română a Antreprenorilor de Construcţii, ARACO); and
  • the Employers' Confederation of Romania (Confederaţia Patronatelor din România, CPR) - which is an umbrella organisation for a number of the other employers' organisations (see below).

The table below lists for these 12 organisations: whether they are members of the Economic and Social Council (Consiliul Economic şi Social, CES) (see below); the dates of their establishment and of the recognition of their nationally representative status; their international affiliation; the number of affiliated federations; the number of branches of the economy in which their members operate; the number of counties in which their members operate; the number of companies they represent; and the total number of employees of member companies. The international organisations referred to in the table are: the Union of Industrial and Employers’ Confederations of Europe (UNICE); the International Organisation of Employers (IOE); the European Association of Craft, Small and Medium-Sized Enterprises (UEAPME); the World Association for Small and Middle Enterprises (WASME); and the European Construction Industry Federation (FIEC).

Nationally representative employers' organisations, 2003
Organisation (membership of CES) Date of establishment/recognition of national representativeness International affiliation No. of federations No. of branches in which represented No. of counties in which represented (out of 42) No. of member companies No. of employees of member companies
UGIR 1903 (CES member) March 1994/October 1997 Application for membership of IOE and UNICE 69 All All 7,567 1,850,000
CONPIROM (CES member) 1992/March 1996 - 12 11 nd 2,572 1,450,000
CoNPR (CES member) 1992/- - 10 nd All 35,000 nd
CNIPMMR (CES member) 1990/- UEAPME, WASME, member of supervising committee of OECD Centre for Private Sector Development, collaborations with 15 similar foreign organisations 12 (plus 7 partners and 2 alliances) nd All 35,000 nd
UGIR (CES member) September 1992/February 1998 Collaboration agreements with employer's organisations in 19 countries 7 nd All nd 325,000
UNPR (CES member only until 2002) 1991/- WASME 11 territorial federations nd All 1,712 (affiliated organisations) 493,114
CNPR (CES member) August 1992/March 1997 Application for membership of UNICE 15 10 All 18,171 477,468
PNR (CES member) . June 1990/December 1997 Cooperation with 5 similar organisations from 5 countries 7 nd All nd nd
UNPCPR-PR 2001/March 2003 - 7 nd All nd nd
Confederatia VITAL 1999/1999 - nd nd 20 2,000 30,000
ARACO December 1990/2000 FIEC 7 territorial federations 15 All 1,180 (plus 140 individuals) 394,324
CPR 2000/- IOE nd nd nd nd nd

Data are available on the number of workers employed by member companies for seven of the employers' organisations, and these add up to about 5.4 million, although the average number of employees in Romania was 4.6 million in 2002. As regards the number of affiliated companies (which has varied considerably over the years in all cases), figures are available for eight organisations, which represent a total of over 80,000 firms. According to official statistics (the Romanian Statistical Yearbook), there were 308,000 active companies in 2000 and 311,000 in 2001, of which (in both years): 270,000 had nine or fewer employees; 29,000 had 10-49 employees; something over 7,000 had 50-249 employees; and a little over 1,950 had 250 employees or more.

Over the 12 years that employers' organisations have existed in Romania, many mergers and divisions have taken place and many new national organisations have been set up. This has resulted from the profound restructuring of enterprises in all economic branches. Many enterprises have been closed and large numbers have reduced their workforces. Examples of restructuring over the past decade include the creation of two UGIRs and the split of CONPIROM from CNPR in March 1996, Two attempts have ben made to create a large umbrella organisation - one in 1995 and the second resulting in the current CPR (a member of IOE), which brings together CNIPMMR, CoNPR, PNR, CNPR and many of the affiliates of CONPIROM.

Activities

The main responsibilities of nationally representative employers' organisations are to: be consulted on draft regulations concerning their activities; be consulted by the government on the proposal, drawing up and promotion of programmes for economic development, restructuring, privatisation and liquidation, and on managing programmes related to accession to the EU (planned for 2007); participate in collective bargaining and the conclusion of collective agreements and other negotiations and agreements in tripartite and social dialogue structures; and propose regulations concerning employers' interests. Most of these general activities are also valid for the national organisations' affiliates.

With regard to participation in national intersectoral collective bargaining, the 2003 national collective agreement was negotiated and signed by seven of the nationally representative employers' organisations - CONPIROM, UGIR, UGIR 1903, PNR, CoNPR, CNPR and CNIPMMR.

In terms of national tripartite bodies and institutions, nationally representative employers' organisations are involved in:

  • the tripartite advisory Economic and Social Council (Consiliul Economic şi Social, CES), set up under Law No. 109/1997 amended by the Law 58/2003. Seven national employers' organisations are members - CONPIROM, CoNPR, UGIR 1903, UGIR, PNR, CNPR and CNIPMMR;
  • the National Employment Agency (Agenţia Naţională pentru Ocuparea Forţei de Muncă, ANOFM);
  • the National Commission for Employment Promotion (Comisia Naţională de Promovare a Ocupării Forţei de Muncă, CNPOFM), on which PNR, CNPR, CONPIROM, UGIR 1903, UGIR, ARACO and CNIPMMR are represented;
  • the National Adult Training Board (Consiliul National pentru Formarea Profesionala a Adultilor, CNFPA);
  • the Commissions for Social Dialogue at ministry level. The most important are those at the Ministry of Public Finances (Ministerul Finanţelor Publice, MFP), Ministry of European Integration (Ministerul Integrării Europene, MIE), Ministry of Labour, Social Solidarity and Family (Ministerul Muncii Solidarităţii Sociale si Familiei, MMSSF), Ministry of Public Administration and the Interior (Ministerul Administraţiei Publice şi Internelor, MAPI), Ministry of Economy and Commerce (Ministerul Economiei şi Comerţului, MEC), Authority for Privatisation and Management of State Ownership (Autoritatea pentru Privatizare si Administrarea Participatiilor Statului, APAPS) and Ministry of Transport, Construction and Tourism (Ministerul Transporturilor, Construcţiilor şi Turismului, MTCT);
  • the National Health Fund (Casa Naţională de Sănătate, CNS); and
  • The National Pensions and Social Insurance Fund (Casa Naţională de Pensii şi Asigurări Sociale, CNPAS).

There are also local social dialogue commissions under the prefect’s office in every district.

Commentary

The development of strong employers' organisations during the transition to a market economy seems to have been extremely difficult, and slow creation of a legal framework for these organisations have hardly been in their favour. Over the period since the beginning of the 1990s, many mergers and divisions have taken place and many new national organisations have been. The large number of peak associations has diminished their bargaining power and their financial and lobbying capabilities, and continues to do so. However, once privatisation has been completed, it is likely that these organisations will undergo merger and concentration. Overall, the issue of employers' organisations does not seem to be very high on the agenda and no debates have been initiated so far by the social partners or the government in relation to their activity. (Constantin Ciutacu, Institute of National Economy, Romanian Academy)

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