Wage agreement reached for rural bus transport

In February 2005, a last-minute pay agreement averted national strike action at rural bus transport companies in Hungary. The deal provides the companies' 25,000 employees with an average gross wage increase of 8% for 2005.

Public road transportation services in Hungary are provided almost exclusively by VOLÁN companies, except in the seven major cities where independent municipally-run transport companies operate. The 24 regional VOLÁNs are state-owned companies, and altogether they employ about 25,000 workers. The major trade union in this area is the Public Road Transport Trade Union (Közúti Közlekedési Szakszervezet, KKSZ), which organises in the majority of VOLÁN companies and has a membership rate of about 60%. On the employer side, VOLÁNs belong to the Association of Public Road Transportation Companies (Közúti Közlekedési Vállalkozások Szövetsége, KKVSZ), which represents them in collective bargaining with sectoral unions. In 1991 KKSZ and KKVSZ concluded the first sectoral collective agreement which set minimum terms and conditions of employment for the 24 VOLÁN companies. In addition, there are company-level collective agreements concluded at all VOLÁN companies, which include company-specific regulations.

In 2002, following a warning strike organised by the unions, an agreement was concluded on wage increases for 2003-5. The agreement contained a concrete wage increase scheme for 2003 and 2004, and a guideline for the 2005 wage negotiations. The agreement’s aim was to ensure that wages would increase by more than the national average during its term.

Given that the 2002 agreement contained only guidelines for 2005, bargaining had an open agenda in terms of wage increase. The unions first demanded a 12% wage increase, but this was before the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT) made its wage recommendations for 2005 (HU0501102N). The unions had calculated that the OÉT would agree on a 8% average wage increase recommendation, but wanted to have some space for bargaining. KKVSZ offered 4% and then raised this to 6% in January 2005. Following an impasse in negotiations, KKSZ called for a half-day national strike on 27 January, which would have practically paralysed rural bus transport across the country. Just three days before the strike, employers offered an additional HUF 2,000 flat-rate extra payment to all employees. KKSZ, however, refused this as unsatisfactory.

The following day, a Saturday, the presidency of the union was holding a meeting to prepare the national strike on Monday morning when the Minister of Labour and Employment personally telephoned and offered a new wage increase scheme. After two hours of intensive debate, the KKSZ leadership accepted the offer as a basis for further negotiations and suspended the strike. At the same time, local wage agreements were concluded at two companies, whose employees would thus not go on strike. Parallel to this, representatives of some companies suggested that a flexible company-based bargaining process would be better as each company was a different financial and labour market situation. The employers’ association, however, protested against the Minister’s intervention and said that it had not known about his offer before hearing about it in the radio, and was not willing to accept any direct intervention by the state.

Nonetheless, KKSZ and KKVSZ continued the negotiations and finally reached agreement. On 10 February, KKSZ called off the strike definitively. According to the agreement, VOLÁN employees receive an average gross 8% wage increase backdated to 1 January 2005, which is a 2% mark-up on the nationally recommended wage increase level (HU0501102N). Furthermore, the agreement offers a flexible adjustment process for those companies in a less favourable economic position.

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