Union signs agreement to raise minimum wage and increase public sector pay
On 27 August 2007, an agreement on raising the minimum wage for 2008 and on a pensions scheme in the case of early retirement was signed between NSZZ Solidarność and the government. In response, the other social partners expressed their discontent with the conclusion of a separate agreement between the government and one of the main national trade unions, thus allowing both parties to ‘bypass’ the Tripartite Commission for Social and Economic Affairs.
In the past few years, tripartite social dialogue in Poland has had a difficult road to follow. In the autumn of 2007, it is facing yet another obstacle – one of the major national trade unions, namely the Independent and Self-Governing Trade Union ‘Solidarity’(Niezależny Samorządny Związek Zawodowy ‘Solidarność’, NSZZ Solidarność), concluded a separate agreement with the government outside of the Tripartite Commission for Social and Economic Affairs (Trójstronna Komisja ds. Społeczno-Gospodarczych). Under this new agreement, the following provisions apply:
- the gross minimum monthly wage for 2008 is to be raised to PLN 1,126 (about €300 as at 11 October 2007);
- the remuneration level in the public sector is to be increased by 9.3%;
- the government is to present draft legislation by the end of 2008 on the payment of state pensions from the Social Security Fund (Fundusz Ubezpieczeń Społecznych) in the case of early retirement.
Social partners fail to make decision on wages
Prior to the signing of this agreement between NSZZ Solidarność and the government, the social partners failed to come to a joint decision on the increase of the minimum wage for 2008; the monthly minimum wage set for 2007 amounts to PLN 936 (€250) (PL0703039I). While the employers would have accepted a gross monthly minimum wage of PLN 1,000 (€267), the trade unions expected a more noticeable increase. As both sides refused to alter their standpoints on the issue, the negotiations ended in deadlock. In such a case, by virtue of the Minimum Wage Act, the government must step in and set the minimum wage level for the following year. In this case, the Polish government offered to increase the amount of the monthly minimum wage to PLN 1,126 (€300). Although NSZZ Solidarność originally hoped for a minimum wage level corresponding to 68% of average pay, the government’s offer proved too tempting to be rejected in the end.
Differences of opinion among social partners
The other social partners represented on the Tripartite Commission expressed their disappointment with the signing of a separate agreement by NSZZ Solidarność, which is one of the main national trade unions. While admitting that the agreement ‘is going in the right direction’, the All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Związków Zawodowych, OPZZ) stated that the success of a minimum wage increase should not be ascribed solely to one of the social partners, since the negotiations had initially been conducted with all of the social partners. The Chair of OPZZ, Jan Guz, described the moment the agreement was signed as a ‘black day for social dialogue’ in Poland. In its official communication on the issue, the Polish Confederation of Private Employers (Polska Konfederacja Pracodawców Prywatnych, PKPP) declared that the ‘endorsement of a bilateral agreement means disregarding other social partners’. Meanwhile, the Confederation of Polish Employers ‘Lewiatan’ (Polska Konfederacja Pracodawców Prywatnych Lewiatan, KPP) commented that ‘social dialogue should rely on equality of the partners and on shared elementary trust’ of the partners.
NSZZ Solidarność, on the contrary, rejected those allegations, claiming that the conclusion of the agreement is in fact a significant achievement for employees in Poland. The trade union argues that the agreement facilitates not only substantial growth of the minimum wage and an increase in income for public sector workers, but it also provides at least a temporary solution to the issue of early pensions which remains unsettled. The legislation on the latter subject currently in force was initially due to expire by the end of 2007, but was extended for another year.
While employees will certainly benefit from the agreement, this individual move by NSZZ Solidarność represents a serious blow to tripartite social dialogue at national level. In this regard, the question arises as to whether the short-term gains are worth the costs to be paid in the long run. Considering that social dialogue has been marginalised for the last two years, events such as this latest agreement will certainly not help to revive it.
Jan Czarzasty, Institute of Public Affairs