National collective agreement put on hold
In May 2004, negotiations in Romania over a national collective agreement for 2004 broke down and the bargaining process has been put on hold. While 10 out of 12 nationally representative employers’ organisations and four out of five nationally representative trade union confederations agreed to sign a draft accord, the Cartel Alfa union confederation refused to do so, as it rejected the proposed increase in the national minimum wage.
The annual national collective agreement provides a minimum basic framework for employment conditions in Romania. The 2003 agreement came into force on 27 January 2003 for a one-year period - however, unless denounced by one of the signatory parties, it is still considered valid until the conclusion of a new agreement.
In May 2004, after more than five months of bargaining, a new national collective agreement was very close to being concluded. Like the previous agreement, the draft contained special provisions regarding:
- working time, in terms of the working day and working week, and compensation for overtime by means time off or a pay premium;
- additional payments for working at night, and for seniority and special working conditions;
- the statutory minimum annual paid leave and other days off for various reasons; and
- employees’ rights to other types of remuneration apart form wages, such as profit-sharing or meal vouchers.
A new feature of the draft 2004 accord was a clause on trade union membership fees, which at the employees' request could be collected by the employer in order to be transferred to the trade unions. The draft agreement also included amendments in line with the provisions of the 2003 Labour Code (RO0401107F) and provided for mandatory consultations between the employer and employees over collective redundancies.
The main issue of dispute in the talks related to the level of the national minimum wage, which was previously set at ROL 2.8 million (EUR 70) per month (RO0401104F). Any major increases might threaten the balance of the 2004 state budget (RO0401106F).
Initially, trade unions requested a much higher minimum wage, but they finally lowered their demands to a monthly rate of ROL 3.2 million (EUR 78). The government and the employers offered only ROL 3 million (around EUR 74). Finally, on 19 May 2004, four nationally representative (RO0307101F) trade union confederations - the National Confederation of Free Trade Unions in Romania Brotherhood (Confederaţia Naţională a Sindicatelor Libere din România Frăţia, CNSLR Frăţia), the National Trade Union Bloc (Blocul Naţional Sindical, BNS), the Confederation of Democratic Trade Unions in Romania (Confederaţia Sindicatelor Democrate din România, CSDR) and Meridian- accepted the employers’ proposal and decided to sign the 2004 national agreement as it stood.
Even though all the trade unions had called for a substantial increase in the minimum wage, CNSLR Frăţia stated that it had decided to accept a lower rise in order to prevent the failure of collective bargaining. The BNS vice-president, Ovidiu Jurcă, also argued: 'It is true that, two years ago, we commonly agreed that, in the view of joining the European Union, the minimum wage should reach EUR 100 in 2004, but taking into account the International Monetary Fund pressures and the even lower amount of ROL 2.8 million established by the government, a policy of small steps was preferred ... ROL 3 million is more than nothing.' Although they had already signed the deal, BNS representatives declared that, if this was decided together with the other union confederations, it would join a call for protest demonstrations.
However, the leaders of the Cartel Alfa union confederation did not accept the settlement, claiming that, by comparison with EU prices and exchange rates, the agreed rise does not even preserve the 2003 purchasing power of the Romanian minimum wage (EUR 75 in January 2003). Given liberalisation of the electric power market and a gradual increase in the prices of certain public utilities that started on 1 July 2004, the purchasing power of the minimum wage will fall even further, although Prime Minister Adrian Năstase claims that 'the economy is roaring'.
As a last negotiating position, employers made a new proposal for a month minimum wage of ROL 3.1 million, but Cartel Alfa could not be persuaded to sign and thus the minimum wage was set at ROL 3 million. Bogdan Hossu, the leader of Cartel Alfa, threatened that, if the 2004 national agreement were registered and made public without his confederation's signature, it would take the government to court for breach of the law on collective bargaining.
Negotiations ended on 19 May and the agreement for 2004 is therefore still only a draft in early July 2004, despite the fact that it already has the signatures of four trade union confederations (CNSLR Frăţia, BNS, CSDR and Meridian) and 10 of the 12 representative employers’ organisations (RO0310103F):
- the Employer Confederation of Romanian Industry (Confederaţia Patronală din Industria României, CONPIROM);
- the National Confederation of Romanian Employers (Confederaţia Naţională a Patronatului Român, CNPR);
- 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 General Union of Romanian Industrialists - 1903 (Uniunea Generală a Industriaşilor din România 1903, UGIR 1903);
- the National Council of Romanian Employers (Consiliul Naţional al Patronatului Român, CoNPR);
- the Romanian National Employers (Patronatul Naţional Român, PNR);
- the Romanian Employers (Patronatul Roman, PR);
- the National Union of Romanian Employers (Uniunea Naţională a Patronatului Român, UNPR); and
- the Romanian Association of Building Entrepreneurs (Asociaţia Română a Antreprenorilor de Construcţii, ARACO).
The government has announced its intention to modify the law on collective bargaining, so as to allow the conclusion of collective agreements in a more flexible way, even without the signature of all social partners.
In the short time before the summer break and then the approval of the 2005 state budget, which should provide a major impetus for resuming collective bargaining, there is little time left for the difficulties over the 2004 national collective agreement to be resolved.