Renewed tensions at Suzuki car assembly plant

In January 2006, the Democratic League of Independent Trade Unions (LIGA) established a union at the Suzuki plant, which protested against breaches in Labour Code working time regulations, and demanded higher wages and better working conditions. The company’s management refused to recognise the union and dismissed the union leader. In response, the Prime Minister refused to participate in the ceremony to launch the plant’s new car model, and called on the company to respect the right to freedom of association of employees.

The Suzuki plant, one of the biggest car assembly works in Hungary, was established in the city of Esztergom in 1992. Today, the plant produces the Ignis, Swift and the SX4 models for the European market and, in cooperation with Subaru and Fiat, it manufactures other models for these brands. In 2005, it produced 147,000 cars, employed 3,200 people, and the company indirectly provided work for an additional 30,000 workers through 360 supplier firms. According to company plans, it will manufacture 300,000 cars and employ 4,000 people in 2008.

Non-unionisation in the nineties

Since the beginning, however, the plant has been subject to tensions between employees and management, provoked by relatively low wage levels, poor working conditions and irregular working time schemes. In the early 1990s, the Metalworkers’ Union (Vasaszakszervezet) made a series of attempts to establish a union in the plant, but without success. Nevertheless, wildcat stoppages and high levels of staff turnover forced the management to improve working conditions in the plant from 1995 onwards.

However, wage levels remained relatively low, leading the company to expand its reach to other countries in order to find sufficient numbers of workers. According to company sources, 900 employees commute from Slovakia on a daily basis, and another 100 employees come from Romania; in both these countries, the average wage level lies below that of Hungary.

Renewed tensions and unionisation efforts in 2005

In 2005, tensions between employees and the company flared up again. In December 2005, the Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA) confederation called for a demonstration in front of the company gates to protest against poor working conditions and irregular working time schemes employed by the plant. Following the demonstration, a local union organisation was set up outside the company premises. The inaugural meeting was held in a bus in the company car park on 13 January 2006. A handful of workers joined the union, and only the elected leader of the newly established union made his name public. Fearing retaliation by the company, all other union members preferred to maintain anonymity. The public relations manager, speaking on behalf of the company, stated that the management does not welcome the presence of the union in the plant.

According to the union, the plant refuses to allow employees to go on paid holidays except when the time schedule designated by the management permits it. The plant requires employees to do ‘voluntary’ overtime, allegedly without taking into consideration certain constraints set by legal regulations. Moreover, the union complained about working conditions, especially about the lack of proper social facilities such as lockers, showers and canteens. The wage system, which includes various premiums and performance-related bonus schemes, is reported as being used to coerce employees into accepting flexible work assignments. The union demands an increase in salaries, particularly at the basic wage level. It also demands that adherence to working time regulations be monitored.

The company publicly refuted the union’s allegations, and stated that it provides various welfare benefit schemes to employees, including covering commuting costs and offering loans for paying house mortgages. Nevertheless, recent visits from the Hungarian Labour Inspectorate (Országos Munkavédelmi és Munkaügyi Felügyelet, OMMF) found that the company has breached legal regulations concerning working time.

On 17 February 2006, some 50 employees stopped work when a 1.5-hour period of overtime work, scheduled in accordance with legal regulations, was suddenly extended by management.

Meanwhile, the elected union leader was let go by the company through a disciplinary process. The company justified his dismissal by claiming that his public statements had been damaging to the company and by a company inspection finding four bottles of alcoholic beverages in his locker on the company premises. The union leader, however, declared in a radio interview that, two days before the company inspection, he had reported to management that his locker had been damaged and requested to have it repaired. In the same interview, he also drew attention to the fact that, a decade before, the company had dismissed the main union organiser based on similar charges. At the time, a company inspection had found a component belonging to the company in the union organiser’s locker. The union leader has sued the company, and the Labour Code will decide whether the company breached the law by firing him.

During this time, the union is operating as a clandestine organisation in the plant. The management refuses to engage in direct contact with the union leader or with anybody else representing the union.

Political reaction

The events have received considerable media attention. A Hungarian Member of the European Parliament argued in an article that the company practice brings into question the democratic order of the country. In this volatile atmosphere, the Prime Minister declined an invitation to take part in the ceremony to launch the new Suzuki SX4 model and open the new manufacturing building, which was held on 28 February 2006. Instead, he visited a union meeting, where he called for a compromise between employees and the company. He told the press that employees have a constitutional right to freedom of association and to establish a union; thus, a company could not block their efforts to do so.

Commentary

Even if the series of events reported above are unprecedented, they nevertheless raise concerns about practices in Hungarian workplaces. Earlier investigations of OMMF have shown that employers regularly fail to adhere to the working time regulations of the Labour Code, which were harmonised with the relevant EU directives in 2001. For example, they sometimes exceed the mandatory limits of weekly regular working time and those of compulsory overtime. Similarly, the Labour Code stipulates that one-quarter of annual paid holidays should be scheduled according to the employees’ preferences, but some employers insist that all paid holidays conform to the time schedule designated by management.

The successful union organisation campaign is noteworthy in this case. Despite continuously shrinking union membership (HU0501103f), unions in Hungary rarely attempt to organise within a plant when the management is resolute on running a non-union plant. The demonstration staged by LIGA introduced a novel way of unionisation in the Hungarian workplace. Moreover, this is the first time in the democratic history of the country that a leading politician has made such a significant symbolic act in defending the rights of employees to establish a union.

András Tóth and László Neumann, Institute of Political Science, Hungarian Academy of Sciences

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