Employers object to proposal to amend the Employers’ Law

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In late 2005, the Romanian government launched a public debate on a proposal to amend the 2001 Employers' Law to ensure more effective participation of employers in sectoral and national social dialogue. In January 2006, several employer organisations criticised the new legislative proposal, which they see as infringing certain fundamental rights as well as disregarding their views. Discussions are still ongoing and it is hoped that the government will approve the amendments soon while remaining as faithful as possible to the original provisions.

Aware that their current organisational structure fails to result in the necessary, efficient social dialogue, employer organisations resumed discussions on grouping their forces together in February 2005, in a bid to increase their bargaining power. At the same time, they discussed with the government possible improvements to Law No. 356 of 2001, the so-called ‘Employers’ Law’.

Structure of employer organisations

Currently, the 13 employer organisations at national level in Romania are:

  • Alliance of Employer Confederations in Romania (Alianta Confederatiilor Patronale din România, ACPR);
  • Romanian Association of Building Entrepreneurs (Asociatia Româna a Antreprenorilor de Constructii, ARACO);
  • National Council of Private Small and Medium Enterprises in Romania (Consiliul National al Întreprinderilor Private Mici si Mijlocii din România, CNIPMMR);
  • National Confederation of Romanian Employers (Confederatia Nationala a Patronatului Român, CNPR);
  • Employer Confederation of Romanian Industry (Confederatia Patronala din Industria României, CONPIROM);
  • National Council of Romanian Employers (Consiliul National al Patronatului Român, CoNPR);
  • Confederation of Employers in Industry, Services and Trade (Confederatia Patronatelor din Industrie, Servicii si Comert, CPISC);
  • Romanian National Employers (Patronatul National Român, PNR);
  • Romanian Employers (Patronatul Roman, PR);
  • General Union of Romanian Industrialists (Uniunea Generala a Industriasilor din România, UGIR);
  • General Union of Romanian Industrialists 1903 (Uniunea Generala a Industriasilor din România 1903, UGIR 1903);
  • National Union of Romanian Employers (Uniunea Nationala a Patronatului Român, UNPR);
  • Union of Romanian Employers (Uniunea Patronatului Român, UPR).

Two of the above organisations, ACPR and UPR (RO0404101F), are umbrella-type structures, regrouping several nationally representative employer organisations. The Alliance of Employer Confederations in Romania, ACPR, embraces three organisations of which two are approved members (CNPR, CPISC) and one is an associate member (ARACO) while the Union of Romanian Employers (UPR) covers six organisations: CNIPMMR, CoNPR, PNR, PR, UGIR and UGIR 1903. Member organisations take turns to keep UPR fully operational as it has no administrative structure of its own (head office, staff, etc.). UPR has made no attempt to have its national representation recognised, yet each of the six constituent organisations is nationally representative.

Proposed amendments to Employers’ Law

In late 2005, the government submitted for debate a draft emergency bill amending Law No. 356/2001, the Employers’ Law. This draft was also made publicly available on the website of the Ministry of Labour, Social Solidarity and Family (Ministerul Muncii, Solidaritatii Sociale si Familiei, MMSSF). The legislative draft incorporated the results of discussions between the government and employer organisations as well as proposals made by German experts who coordinated the PHARE Project Development of autonomous social dialogue.

The preamble sets out the purpose of the new regulation, which aims at encouraging the establishment of employer organisations according to area of activity or sector. Its objective is two-fold: to increase the number of collective agreements at sectoral level, and to enhance the capacity of employer organisations to participate in social dialogue effectively.

New legislative elements

The new elements include the following:

  1. Criteria specifying the representativeness conditions for the establishment of employer organisations, including criteria determining the sector or area of activity, territorial scope and inclusion in the small and medium enterprise (SME) category. Other criteria are acceptable but will not be taken into account when determining and recognising the organisation’s representation.
  2. For the first time, employer organisations cannot be affiliated to more than one sectoral and one national organisation.
  3. In addition to regular members, employer organisations may also accept associate members (professional, academic, research, environment, consultancy organisations, etc.), although the latter are not taken into account to determine the organisation’s representative level.
  4. To acquire legal entity status, employer organisations must submit a complex set of documents, attesting among other things:
  • initial assets (at least 50 minimum national gross wages per employer organisation, 10 per federation and 15 per confederation);
  • additional identification data on founding members (unique registration code, legal representatives, etc.);
  • name of members of management bodies, individual numerical identification codes;
  • contact details of employer organisation (telephone, email, fax, etc.).
  1. The law court will set up a Register of employer organisations and forward the information to the MMSSF, which will make it available on its website as it is considered to be of public interest.
  2. Only nationally representative employer organisations will be consulted when regulatory drafts are drawn up and will be entitled to make proposals for legislation in their field of interest.
  3. The proposed amendment of the Employers’ Law also details the type of services that employer organisations may provide to their members: information, consultancy and assistance in all areas, employment and vocational training services, negotiation, mediation, arbitration and conciliation actions, representation before law courts (in the case of conflicts of rights) or any other services under the law.
  4. Moreover, employer organisations will be allowed to utilise, by concession or rent, government-owned buildings or land, if available.

Since the proposed amendments represent substantial changes to the existing Employers’ Law, all existing employer organisations are required to register again under the terms of the new regulation by January 2007.

Reactions of the employer organisations

UPR constituent employer organisations held a press conference in January 2006, demonstrating its vehement disapproval of the amendments proposed by the MMSSF and addressed an open letter to the ministry. According to the letter:

The draft constitutes a breach of the provisions of the International Labour Organisation Conventions ratified by Romania with regard to social dialogue (Conventions no. 144/1976, no. 154/1981, no. 98/1949, no. 87/1948), as it disregards the acknowledged rights of employers on freedom of association, equal status with government and trade union members, absence of any conditions for acquiring an employer organisation a legal status, non-dissolution and non-suspension by the administrative authority.

The leaders of signatory employer organisations argue that the draft also infringes provisions of the Romanian Constitution. If their stand is not paid heed to, they intend to file an appeal with the Constitutional Court of Romania (Curtea Constitutionala) as well as with European international bodies.

Employers deplored the fact that the new Employer Law was not discussed and approved concurrently with the law on collective work agreements (Law No. 130/1996), which is soon to be amended and also specifies representativeness criteria.

They also stress that there is a potential risk of politicising the movement of employer organisations and hence destabilising industrial relations. Since the amendments brought to the Employers’ Law will initially be approved by emergency ordinance, employer organisations may proceed immediately with the registration process. However, the parliament might reject the ordinance or reformulate a new law which would entail yet another registration process.

ACPR’s members took a less critical viewpoint. As for UNPR, it contested the legitimacy of employer organisations availing of government buildings and land, as this could potentially favour certain interests groups.

In February 2006, debates between the government and employer organisations continued and it is hoped that in the near future a joint decision will be reached on the proposed amendments.

Commentary

The fragmentation of the employer organisations is a new feature of Romanian industrial relations (RO0310103F). The 2005 Comprehensive Monitoring Report by the European Commission referred to it as ‘a phenomenon that undermines the capacity of employers to participate in bipartite or tripartite social dialogue’.

Some sectors of the economy completely lack nationally representative employer organisations to participate in collective bargaining, while, at national level, the voice of employer organisations is also dispersed.

Given the certain organisational, information and functional shortcomings in the system of employer organisations, the government has been forced to propose a new law. The problem is that its proposal does not include all the remarks and suggestions made by existing employer organisations in the course of discussions held throughout 2005. However, taking into account the fragmentation and diversity of opinions voiced by Romanian employer organisations, it is hard to believe that the proposed law will be received with an unanimously favourable reaction by all employer organisations.

Nonetheless, the government has to assume its unpopular role of approving amendments by emergency bill, and we might witness a regrouping of the employers’ movement in the near future.

Diana Preda, Institute of National Economy, Romania

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