Social stability pact signed without some trade union confederations

At the end of April 2004, a tripartite 'social stability pact' for 2004 was finally concluded in Romania, setting many important economic and social strategy goals, which are to be carefully monitored though a set of indicators. Furthermore, separate protocols are to be drawn up for each of the areas covered. However, three of the five nationally representative trade union confederations did not sign the agreement.

After more than six months of negotiations (RO0401104F), a 'social stability pact' for 2004 was concluded by the government and most social partner organisations on 29 April 2004. It was also announced that this might be the last one-year agreement of this type, since from 2005 the parties will try to negotiate pacts covering the whole term office of each incoming government .

Signatories

On behalf of the government, the social stability pact was signed by Adrian Năstase, the Prime Minister, Dan Ioan Popescu, the Minister of Economy and Commerce, and Marian Sârbu, the Minister for Relations with the Social Partners. Nine employers’ organisations (RO0310103F) were signatories of the pact:

  • the Employer Confederation of Romanian Industry (Confederaţia Patronală din Industria României, CONPIROM);
  • the National Council of Romanian Employers (Consiliul Naţional al Patronilor din România, CoNPR);
  • the Romanian National Employers (Patronatul Naţional Român, PNR);
  • 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 Confederation of Romanian Employers (Confederaţia Naţională a Patronatului Român, CNPR);
  • the National Council of Private Romanian Small and Medium-sized Enterprises (Consiliul Naţional al Întreprinderilor Private Mici şi Mijlocii din România, CNIPMMR);
  • the Romanian Association of Building Entrepreneurs (Asociaţia Română a Antreprenorilor de Construcţii, ARACO); and
  • the Romanian Employers (Patronatul Român, PR).

Only two of the five nationally representative trade union confederations (RO0307101F) signed the agreement - the National Confederation of Free Trade Unions of Romania 'Brotherhood' (Confederaţia Naţională a Sindicatelor Libere din România Frăţia, CNSLR Frăţia),and Meridian. The National Trade Unions Bloc (Blocul Naţional Sindical, BNS), the Democratic Trade Union Confederation of Romania (Confederaţia Sindicatelor Democratice din România, CSDR) and Cartel Alfa did not sign.

Main points

The 2004 social stablity pact cover 13 strategic issues, as follows.

  1. Economic restructuring. The parties have agreed to eliminate cross-subsidies and reduce arrears by modernising commercial companies, and to increase the technical and financial support for new technologies. Restructuring and fair competition rules will be promoted in the energy sector, while 'downsizing' and privatisation will continue in the defence industry. Small and medium-sized enterprises will benefit from greater support for business parks and 'e-business'. Structural reform in agriculture should consolidate farms, increase vertical 'inter-industry integration' and improve the quality of products.
  2. Budgetary and fiscal policy. Fiscal legislation and the accounting system will be harmonised with EU and international standards and the tax-collecting system will be improved.
  3. Business environment. Market competition rules will be strengthened, and the quality of products and environmental standards improved. There will be better access to loans, privatisation will be completed in the banking sector and the development of the cooperative sector will be encouraged. An assessment will be made of possible ways to introduce a tax deduction on reinvested profits.
  4. Employment policies. These will aim at increasing the employment rate and reducing unemployment, combating undeclared work through national and sectoral campaigns, developing the national network of adult training centres, and encouraging inactive people to re-enter the labour market by financing their training from the unemployment budget.
  5. Wage policies. New wage policies and new agreement procedures regarding the national minimum wage will be introduced. In 2005-6, the increase in the minimum wage should cover inflation fully and provide a more substantial real increase, supported by growth in gross domestic product. The Ministry of Public Finances (Ministerul Finanţelor Publice, MFP) will assess and report to the social partners on the financial implications of such a policy.
  6. Employment relations. The implementation of the 2003 Labour Code (RO0308102N) will be followed up and monitored. Working conditions will be improved and, by 2007, normal working conditions will be ensured for those activities that are currently performed under special conditions. The incidence of work accidents and occupational diseases should be cut.
  7. Quality of life. There will be better access to high-quality healthcare, especially for mothers and children, decentralised management of secondary schools and increased government funding for research and development, with a goal for 2010 of 3% of the gross domestic product.
  8. Social assistance. Private pension schemes will be introduced, while efforts will continue to increase the sustainability of the public pensions system. Online information technology will be introduced for medical provision, work accidents and occupational diseases.
  9. Healthcare. Statutory staffing norms will be set for each healthcare unit in order to provide optimal services, and a new legal framework should allow for full spending of specially collected health funds. A collective agreement for 2004 will be prepared in the healthcare sector.
  10. Public order and administration. Administrative and financial local autonomy will be strengthened. There will be increased use of information technology, improved transparency, a closer relationship with citizens, modernised human resource management and career development for public servants, and measures to combat irregular migration.
  11. Reform of the courts system. By the end of 2004, the following will be set up: 14 specialised tribunals for minors and family law; eight labour and social insurance tribunals; 12 commercial tribunals; and two tribunals specialising in tax and administration. By the end of 2006, each of these various tribunals will be established in all 42 counties.
  12. European integration. The parties will support the implementation of the 'acquis communautaire' (the body of EU law that new Member States must have adopted) based on the pre-accession governmental programme and on the recommendations made by the European Commission.
  13. Development of social partnership. The signatories are committed to focusing on the development of bipartite sectoral and local social dialogue, which should expand its responsibilities. An electronic social dialogue database system will be established, with help from the EU, the representativeness criteria for both employers’ and trade union organisations will be revised and the industrial relations legal framework will be adjusted, thus providing for new regulations on labour conflicts, employers’ organisations and professional associations. The social partners will develop various type of programmes, including twinning programmes to support trade unions and employers’ movement, common programmes with the Labour Inspection (Inspectia Muncii) and programmes at the local level.

Follow-up and implementation procedures

The signatory parties have made a commitment to refrain from initiating or encouraging any developments that might infringe on the climate of social peace and stability. A tripartite monitoring committee has been set up at the national level, with the task of monitoring and assessing the implementation of the pact, and to prevent and reconcile any problems or disagreements.

The social pact also provides for assessment criteria and indicators for the achievement of each of the aims listed above. An innovation is that the 2004 pact stipulates that, for each strategic issue, within 30 days separate protocols will be negotiated with the ministries involved (eight ministries and three governmental agencies), which will provide for the relevant policy measures and mechanisms, as well as setting the timeframe for achieving the goals. These protocols will also provide a schedule for the adoption of the over 50 new or adjusted laws and regulations stipulated in the pact.

Commentary

The conclusion of the new social stability pact will have positive effects on the economic and social climate, since it covers many important goals and aspects of modernisation. Full implementation of the pact will be difficult, not least because of the many legislative adjustments involved (which do not depend just on the social partners and government) and the tight sets of assessment indicators that are provided for monitoring purposes. To these will shortly be added the detailed protocols which are now under discussion for each strategic area.

The absence of three of the representative trade union confederations is a major loss. The agreement provides for no changes in respect of the present minimum wage, which has been an issue of discord among the social partners and government since 2003. Dumitru Costin, the president of BNS, made clear that this is the reason why BNS did not sign the agreement and stated that 'for union members the pact would not be of any benefit since the Minister of Public Finances already committed himself in Washington' (International Monetary Fund headquarters) 'not to change the minimum wage this year'. CSDR and Cartel Alfa also accused the pact of being politically motivated, as the run-up to the general elections in autumn 2004 is underway. Iacob Baciu, the president of CSDR, stated that the pact assumes responsibilities in the name of the next government, which means that its fulfilment is not guaranteed. (Diana Preda, Institute of National Economy)

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