Wage agreement signed at Paks Nuclear Power Plant

Following the conclusion of a sectoral agreement, and lengthy negotiations and industrial action at Paks Nuclear Power Plant, the representative trade unions and management signed a company-level agreement on the annual wage increase at the end of March 2006.

The state-owned Paks Nuclear Power Plant (Paksi Atomeromu, PA), which employs 2,700 workers, is the largest Hungarian power plant. A total of four company trade unions at the plant are recognised as collective bargaining partners, including the Shiftworkers’ Interest Representation Organisation (Muszakos Dolgozók Érdekvédelmi Szervezete, MÉSZ), which has 600 members. In recent years, the four trade unions joined forces to make their wage claims and negotiate the collective agreement within the framework of a Cooperation Council.

2006 wage bargaining round

On 23 February 2006, the annual sectoral ‘Wage and Social Agreement’ of the electricity industry was signed, stipulating an average gross wage increase of at least 4.5%. The agreement will be extended to the whole industry by the decree of the Minister of Employment and Labour.

Annual wage negotiations at PA commenced on 1 March. The employer’s initial offer included an average increase of 5%, and social and welfare benefits for each employee to the value of approximately HUF one million (€4,000). Before the second bargaining session, scheduled for 7 March, MÉSZ left the Cooperation Council and announced its own demands: a 15% wage increase for shift workers; an additional annual 5% wage increase until the wage level of the EU15 Member States is reached; and a profit-sharing scheme.

MÉSZ, in compliance with the Labour Code, announced a labour conflict situation on 6 March and initiated conciliation proceedings. The employer, considering this unlawful, filed a case at the county labour court, which was overruled. MÉSZ then called for a two-hour warning strike for 13 March in the non-operating block No.1 of PA, which was under maintenance. Although the three other trade unions also disagreed with the employer, they considered the strike call as untimely and did not join the strike. At the same time, MÉSZ announced its unwillingness to participate any further in the negotiations.

The strike rules at PA are quite strict in order to ensure nuclear safety and essential power production under all circumstances. Therefore, the strike situation has to be recorded in the minutes of the engineer on duty, both by the union and the employer. In this instance, the employer refused to do this and also threatened the striking workers with a disciplinary procedure. The Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA), to which MÉSZ is affiliated, condemned the ‘employer’s revenge on lawful strikers’.

More bargaining followed with proposals from both sides, and resolution was expected at the next meeting on 23 March. In the meantime, MÉSZ once more called on its members to strike on 27 March in case the meeting was unsuccessful. Once again, the employer went to the labour court, this time trying to involve the Labour Mediation and Arbitration Service (Munkaügyi Közvetíto és Döntobírói Szolgálat, MKDSZ) to resolve the conflict; however, MÉSZ refused to cooperate.

A second strike was announced for an indefinite period, starting from 7.00 on 27 March. The management and MÉSZ agreed on a 5% output reduction for 72 hours. However, the Hungarian Power Companies (Magyar Villamos Muvek, MVM), the national wholesale distributor of electricity, only allowed two half-hour periods of output reduction in just one block. Thus, the entire strike lasted one hour, with everybody working as usual, but with the plant producing less. Owing to the special strategic situation of the power plant, the rationale of the strike was purely to cause economic damage to the employer. Finally, the union cancelled the strike call, claiming that it made no sense to continue without permission for a significant output reduction.

A company-level agreement was finally concluded on 31 March 2006, following 11 meetings.

Main provisions of the agreement

The agreement includes:

  • a 7.2% average wage increase, as of 1 January 2006;
  • a flat-rate increase of HUF 13,800 per month (€55) for every employee, from 1 March 2006 – this was one of the key demands of the trade unions;
  • an increase in the value of various fringe benefits;
  • a 6% increase in the employer’s contribution to the private pension funds, as of 1 April 2006.

Further negotiations will be held on the company’s human resource management policy and, in particular, on developing the company’s fringe benefit system, with an agreement expected by 30 June 2006.

Commentary

In the electricity sector, trade unions are exceptionally strong by Hungarian standards, as the sectoral collective agreement is approved by the Minister of Employment and Labour. Therefore, at stake in company bargaining are the items beyond those included in the sectoral agreements. It is fairly typical that disputes and industrial actions may occur at a state-owned company like PA, unlike in private companies where agreements are usually concluded without serious conflict. This episode demonstrates the problems of a multiple trade union system in a major company in a sector of strategic importance; it also shows how a minority trade union, representing a group of workers with a strong bargaining position, can succeed in its aims.

Anikó Kóródi and László Neumann, Institute of Political Science, Hungarian Academy of Sciences

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