Unrest over privatisation-related job losses

During October 2003, employees at two large state-owned Romanian companies - Roman SA (truck manufacturing) and Siderurgica SA (steel) - held protests over their forthcoming privatisation and accompanying large-scale job losses. Trade unions are calling for better redundancy terms.

On 2 October 2003, about 4,000 employees of Roman SA, a state-owned truck-manufacturing company located in Braşov (one of the largest towns in Romania) walked out while awaiting the results of negotiations at the Authority for Privatisation and Management of State Ownership (Autoritatea pentru Privatizare şi Administrarea Participaţiilor Statului, APAPS) - the highest administrative body for Romania's remaining state-owned commercial companies - concerning the provisions of the contract for the firm's forthcoming privatisation. It turned out that the buyer, Pesaka Asana (M) Sdn Bhd, is going to take over only a part of the plant and will retain only 800 employees, and 3,000 employees (out of 5,000) will thus be made redundant, at least until a new industrial park is created at the site. The announcement of the job losses brought swift reactions from trade union representatives, who stated that they would hold protests until the issue was resolved.

On 24 October, the company was sold at the token price of EUR 1, under Government Emergency Ordinance No. 155 concerning the privatisation of SC Roman SA Braşov and the establishment of an industrial park on its site. The ordinance also stipulates that, in line with the legislation in force, each redundant worker will receive two months' average pay immediately after termination, unemployment benefits and, during the following 20-24 months, complementary benefits (depending on the duration of previous employment). The new administrator of the industrial park is obliged to set up a special fund - financed by a minimum of 8% of the total value of rent collected on the park and from the sale of assets - which will provide the complementary benefits for the redundant workers. Furthermore, the administrator is required to give priority to former Roman SA employees in any future recruitment.

On 27 October, 5,000 workers from Roman SA blocked the national highway that runs near the plant (as they had already done on previous occasions), in support of demands for:

  • payment in a single amount of all unemployment benefits, complementary benefits and wage compensation due to the redundant workers, as stipulated in the relevant collective agreement;
  • clearer provisions concerning the job prospects of the redundant workers; and
  • a 'social agreement' between APAPS and the trade unions.

On 29 October, 5,000 workers again blocked again the road, demanding to be consulted over any decision concerning the industrial park. Furthermore, there is still a dispute over a lack of funding sources (of about ROL 150 billion) for further complementary benefits for the redundant workers.

Roman SA is not the only current case of industrial unrest over privatisation-related job losses. On 27 October, trade union representatives at Siderurgica SA- Romania's last integrated steelworks in state ownership, located in Hunedoara, where it is the main employer - received documentation from APAPS announcing the sale of 80.9% of the company’s shares to LNM Holding and the redundancy of 2,800 out of 5,000 employees. On the same day, 400 employees blocked the road between Hunedoara and Deva for an hour in protest. They demanded an initial payment of ROL 50 million (EUR 1,300) to ROL 100 million (EUR 2,600) for each redundant workers - as awarded in the case of SIDEX, the largest Romanian steelworks, when it was sold earlier to the same holding company - accompanied by 20-24 months of complementary benefits.

The contract for the sale of Siderurgica SA, signed on 28 October, is part of a 'privatisation package', also involving SC Petrotub SA, with the two companies being sold together to LNM Holding. The Government Emergency Ordinance on the privatisation of Siderurgica SA (No. 116 of 24 October 2003) does not explicitly deal with redundancies. The only relevant provision stipulates: 'the amount received by APAPS from the sale of the company shares shall be transferred to the Hunedoara industrial park within five days after the payment, in accordance with the sale contract, in order to create new jobs.'

On 28 October, about 300 Siderurgica SA workers again blocked the road and the next day, 1,000 employees held a march. Trade unions said that the redundancies would kill Hunedoara, which survives only because of the presence of the steel industry, and announced that protests would continue until their claims were met.

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