Trade union protests over job losses in Braşov County

In early 2007, the Authority for State Assets Recovery announced that it would start liquidation procedures for a number of companies in the manufacturing sector, including Tractorul, Rulmentul and Nitramonia. The announcement generated protests on the part of trade unions in the city of Braşov in central Romania, and these continued even after an agreement was reached on key issues. The main grievances pertain to the content of restructuring programmes, the threat of collective redundancies and failure to pay outstanding wages.

Context

During the twentieth century, the geographically central city of Braşov was a citadel of Romanian industry. Whereas in 1985 the manufacturing sector of Braşov County accounted for over 185,000 employees, their number had declined to around 60,000 by 2004.

In Tractorul UTB, the leading tractor manufacturer in Romania, the number of employees has decreased substantially from approximately 25,000 persons in 1990 to the current figure of 2,000. Meanwhile, the ball-bearing and components company Rulmentul Brasov Romania and the fertiliser and explosives manufacturer Nitramonia have also faced severe job losses.

Currently, the debts of these three enterprises amount to more than €180 million in the case of Tractorul, over €60 million in the case of Rulmentul and €25 million in Nitramonia. Their economic situation has deteriorated significantly since 1997.

In the course of the economic transitional period since the early 1990s, the state repeatedly wrote off the debts of these three companies, granting them financial resources for the payment of wages. Successive attempts at privatisation ended in failure.

Reasons for trade union protests

In December 2006 and January 2007, employees of Tractorul and Rulmentul were forced to take unpaid leave, as the two companies were unable to pay their utility bills. At the end of January, the employees came back to work only to find that the enterprises were going to be liquidated.

On hearing this news, some 2,000 employees staged protests in the streets of Braşov on 25 January 2007, claiming that the government had failed to meet their expectations for years and that the only measure it had seen fit to take was to lay off personnel.

Agreement on collective redundancy law

On 26 January, the trade union leaders of Tractorul, Rulmentul and Nitramonia, together with representatives of the National Trade Union Federation Solidarity of Bucharest Metalworkers (Federaţia Naţională Sindicală Solidaritatea Metal Bucureşti) and the National Trade Union Bloc (Blocul Naţional Sindical, BNS), held several meetings with representatives of the Ministry of Labour, Social Solidarity and Family (Ministerul Muncii, Solidarităţii Sociale şi Familiei, MMSSF) and the Authority for State Assets Recovery (Autoritatea pentru Valorificarea Activelor Statului, AVAS). The general agreement was to propose to the government the completion of Emergency Ordinance No. 116/2006 on social protection, granted to employees losing their jobs as a result of collective redundancy.

The ordinance contained provisions less favourable for the redundant employees of the companies, compared with the rights stipulated in previous regulations. The following amendments were therefore proposed:

  • reduction of the minimum reference length of service from 24 to 12 months to allow for entitlement to redundancy pay and compensation income;
  • monthly compensation income equal to 50% of the individual average net wage of the three months prior to dismissal;
  • granting on the date of dismissal of two monthly national average net wages as set in January of the respective year; previously, redundant employees had been entitled to only one month’s wage;
  • compensation income to former employees who are re-employed before the expiry date of the compensation by the same companies that dismissed them, once the respective companies are no longer majority state owned.

The amendments were subsequently approved by Emergency Ordinance No. 2/2007 and published in mid February.

Protests continue

However, trade union members in the three companies continued their protests by picketing the prefecture of the City of Braşov on 19 February 2007 and organising a meeting on 26 February with the participation of over 3,000 employees.

On this occasion, the protesters expressed their disapproval over the approximately 1,800 job cuts in Tractorul as a result of the decision to close down the company by forced liquidation. They also claimed that the privatisation of Rulmentul had been deliberately slowed down and that Nitramonia workers had gone without wages for seven months.

Following such developments and confrontation, the General Shareholders Meeting of Tractorul, held on 19 March 2007, instructed the sole administrator and general manager to take immediate measures for the complete restructuring of the company and to find solutions to pay the outstanding wages to the workers.

Commentary

No decisions were announced regarding Rulmentul and Nitramonia. It is highly probable that the employees of these companies will also be affected by collective redundancy, and it is expected that protests will continue.

Luminiţa Chivu, Institute of National Economy, Romanian Academy

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