Employers' organisations hold forum

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In October 2004, the Union of Romanian Employers (UPR), grouping six of Romania's nationally representative employers’ organisations (of the 14 currently in existence) held a forum, the first joint initiative of its kind. The forum drew attention to economic 'competitiveness gaps' and proposed a number of changes to current social dialogue provisions.

A 'forum of chairs of employers’ organisations in Romania' was held on 26 October 2004. The forum was organised at the initiative of the General Union of Romanian Industrialists 1903 (Uniunea Generală a Industriaşilor din România 1903, UGIR 1903), in cooperation with five other nationally representative employers’ confederations (RO0310103F): the General Union of Romanian Industrialists (Uniunea Generală a Industriaşilor din România, UGIR); the National Council of Private Romanian Small and Medium-sized Enterprises (Consiliul Naţional al Întreprinderilor Private Mici şi Mijlocii din România, CNIPMMR); the Romanian Employers (Patronatul Român, PR); the Romanian National Employers (Patronatul Naţional Român, PNR); and the National Council of Romanian Employers (Consiliul Naţional al Patronilor din România, CoNPR). In spring 2004, these six employers’ organisations decided to merge, by setting up the Union of Romanian Employers (Uniunea Patronatului Român, UPR) (RO0404101F). The October forum was the first joint event of its kind.

The event was held at the Academy of Economic Studies (Academia de Studii Economice, ASE) in Bucharest and received extensive press coverage. In addition to UPR-affiliated organisations, other guest participants included: representatives of trade union confederations (RO0307101F); representatives of chambers of commerce; ambassadors; and the rector of ASE. Attending the event on behalf of the government were the minister for European integration and the delegate minister for the coordination of control authorities.

Memorandum on the economy

The main subject on the forum's agenda was a report entitled 'memorandum on the economy'. The document makes a statistical analysis of the current state of the Romanian economy and society. Concretely, employers highlight low purchasing power among consumers, insufficient market competition, a burdensome tax system and few foreign investments. Domestic production of goods and services meets only 60% of the home market's needs with the rest having to be imported, which leads to a negative trade balance. In the social field, the memorandum finds that insufficient resources are allocated to health, education and urban and rural infrastructure. Productivity is low and there has been an alarming increase in the ratio between the number of pensioners and tax-paying employees (1.5/1 in 2003).

According to the employers, the widening of economic development and market competitiveness gaps between Romania and other European countries is due primarily to: poor-quality government actions; and dysfunctional relationships between state institutions on the one hand, and entrepreneurs and their organisations on the other. The crucial issue facing Romania, according to the authors of the memorandum, is that of 'increasing market competitiveness with a view to accession to the European Union'.

With regard to social dialogue, the document calls on authorities to make significant changes, by:

  • introducing new standards of representativeness for employers’ confederations, by amending law no. 356/2001 (the Employers’ Law);
  • making the approval of employers a sine qua non condition for passing new regulations with economic impact; and
  • repealing the provisions of government ordinance no. 37/2003, which imposes restrictions by stipulating mandatory approval from authorities when setting up an employers’ organisation

Debates and standpoints

During the proceedings at the forum, the leaders of the six employers’ confederations viewed the oncoming 'wave of legislative changes' expected over the next couple of years, as well as European competition, as catalysts in the process of employers’ joining forces and speaking as one in their partnership with trade unions and the government.

Leaders attending the forum denounced tripartite dialogue as being carried out prevailingly between the government and trade unions and stated that employers’ associations had obtained no results in the negotiations over drawing up the recent Fiscal Code and Labour Code (RO0401107F and RO0308102N), as their organisations had been fragmented and concerned themselves with minor, isolated issues.

With regard to the tax system, the chair of PNR declared that, contrary to a widely held belief, 'the biggest obstacle in the way of business is not the tax system or the absence of an efficient social dialogue, but the credit system; without loans there will be no investments and the tax system issue will not be resolved.'.

The disquieting character of the statistics outlined by the employers prompted government representatives at the forum to refer to the necessity of extending dialogue with employers’ organisations in order to cut down on corruption, reduce the underground economy and increase economic competitiveness. However, employers declared that the government in power 'had failed to convince that it truly understood the role of state institutions in a modern market economy and the importance of employers for the economic development of Romania'.

The representatives of trade union confederations at the event emphasised the usefulness of social dialogue with employers’ organisations, pointing out that in many cases the partners had reached a common opinion, but quite the opposite of the one expressed by the government.

Main decisions reached

At the proposal of UGIR 1903, UPR members decided, with several adjustments, to:

  • adopt a system of gradual approaches to reaching employers’ goals, including lobbying, written statements and protests and if deemed necessary, going as far as ceasing collective bargaining, withdrawal from tripartite institutions or even holding a 'fiscal strike';
  • appraise the quality of government services, by conducting studies on the bearable limits of taxation and sending out questionnaires on control actions for companies to fill in, in order to prevent abuse on the part of authorities;
  • monitor the deficiencies of the legislation in force, and propose penalties for political decision-making errors; and
  • declare 26 October 'Employers’ Day'.

The forum saw the launch of the first edition of The Employer, a magazine promoting unity among employers. It was also decided to draw up an 'employers’ code of ethics'. An appeal was also launched to politicians and employers’ confederations in Europe.

Commentary

2004 has witnessed major events in the employers’ movement. At the end of 2003. there were 12 nationally representative employers' organisations in Romania (RO0310103F) and in 2004 one more was added to the list - the Confederation of Employers in Industry, Services and Trade (Confederaţia Patronatelor din Industrie, Servicii şi Comerţ, CPISC). Furthermore, following a change in the statute of the former Confederation of Romanian Employers (Confederaţia Patronatului Român, CPR), a new top-level employers’ organisation emerged: the Alliance of Employers’ Confederations in Romania (Alianţa Confederaţiilor Patronale din România, ACPR) (RO0404101F). ACPR inherited from the former CPR membership of the International Organisation of Employers (IOE) and since June 2004 has also been a member of the Union of Industrial and Employers’ Confederation of Europe (UNICE). ACPR currently includes three nationally representative employers’ organisations:

  • two as members - the National Confederation of Romanian Employers (Confederaţia Naţională a Patronatului Român, CNPR) and CPISC; and
  • one as an associate member - the Romanian Association of Entrepreneurs in Constructions (Asociaţia Română a Antreprenorilor din Construcţii, ARACO).

Six other employers’ organisations set up UPR - UGIR 1903, UGIR, CoNPR, PNR, PR and CNIPMMR. In the cases of both ACPR and UPR, member organisations retain their nationally representative character, so that there are now 14 nationally representative employers’ organisations In Romania. In the course of 2004, UPR criticised the decision of UNICE to admit ACPR as a new member. Since July 2004, UGIR 1903 has been a member of the Federation of European Employers (FedEE).

The October 2004 forum organised by the six nationally representative employers’ confederations which agreed to set up UPR was meant to be a further attempt to coalesce the employers’ movement in Romania, by attracting employers’ organisations which until now have not expressed their intention to become affiliated to either of the two poles.

Criticism of the government, especially in terms of abuses by control authorities, seems to have been triggered at least partly by the tax control carried out over an entire year at UGIR 1903. As a result, the tax imposed on UGIR 1903 was ROL 2 billion for a profit of only ROL 85 million, after it had previously paid a fine of ROL 6 billion. (Luminiţa Chivu, Institute of National Economy)

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