Lengthy industrial conflict at Budryk coal mine settled

One of the longest disputes in the Polish coal mining industry which lasted 46 days has been brought to conclusion on 31 January 2008. Before an agreement was concluded, the conflict between the workers at the Budryk hard coal mine and the management of the Jastrzębska Coal Company, the mine’s owner, had escalated. The dispute led to a hunger strike among several miners, a protest in the city of Warsaw by the wives of the miners involved and altercations among the miners themselves.

Socioeconomic background of conflict

In recent years, workers at the Budryk hard coal mine (Kompania Wegla Kamiennego Budryk S.A.) in the Silesia province in southern Poland have on several occasions organised protest actions. Given the frequency of industrial action at Budryk, it could be said that the present action is part of a recurring pattern (PL0501103N, PL0409101N, PL0511101N, PL0512101N).

Wages and profit margins

Nevertheless, the protest action initiated by the mine’s workers in April 2007 featured a number of new elements. Pursuant to the Strategy for hard coal mining operations in Poland over the years 2007–2015 as adopted by the Council of Ministers on 31 July 2007 ( PL0611029I), representatives of the Budryk colliery and the Jastrzębska Coal Company Inc. (Jastrzębska Spółka Węglowa S.A., JSW) negotiated the terms of Budryk’s incorporation into JSW as of early 2008. Furthermore, they agreed that the earnings of workers at the Budryk mine would be gradually increased until reaching the wage level of JSW workers by 2011. According to estimates of the trade union activists, the difference in the average wage of miners at Budryk and at JSW amounted to about PLN 900 (€264 as at 17 April 2008), while it corresponded to PLN 500 (€147) at the bottom of the respective pay scales. Moreover, the profit bonuses for 2006 which were paid out to workers at the Budryk mine were PLN 1,500 (€440) lower than those received by miners at JSW. However, this could have been expected given that JSW recorded a profit of PLN 287 million (€84.2 million) for 2006, while Budryk only showed profits of PLN 5 million (€1.5 million).

Employee referenda regarding merger

Workers at the Budryk mine were unhappy with the agreed terms of the merger between the mine and JSW and thus took the decision to hold an employee referendum. The ballot on the merger was held on 25 September 2007 and involved 1,527 miners out of a total of 2,400 workers, representing about 62% of Budryk’s workforce. Some 1,150 of these workers (75.3%) voted against the merger with JSW, while the trade unions representing workers at JSW expressed their support for the merger proposal.

It should be noted that, from a formal point of view, the referendum’s results were not in any way binding for Budryk’s management. However, the lack of reaction from management resulted in the company’s workers officially launching a collective dispute with the board of directors as of 2 November 2007. On 8 December, another referendum on the planned merger was held among Budryk’s workers to assess whether or not their opinion had changed. The second referendum’s outcome was much like that of the first one, with 1,100 workers of the 1,285 participants (85.6%) opposing the incorporation of Budryk into JSW. Overall, four of the nine trade unions present in Budryk supported the strike action.

Escalation and resolution of conflict

Forms of protest action

The failed negotiations and the lack of reaction by company management in relation to the results of the successive referenda led the miners to express their discontent in a more direct way. Thus, on 13 and 14 December, two workers began a hunger strike; on 16 December, three further miners joined the hunger strike. The dispute entered a new stage on 17 December 2007 when several workers decided to embark on a ‘sit-in’ protest. This form of protest was supported by several hundred miners. The miners were determined to occupy the mine over the entire Christmas holiday period. Consequently, the management of JSW decided to take measures to placate the protests and invited the miners involved to take part in talks on 27 December.

However, even before the talks began, it became clear that opinions on the protesters’ side widely varied among Budryk’s workforce. Several hundred trade union members who were not involved in the strike held a demonstration outside the building in which the negotiations were held, proclaiming that they wanted to work and not to strike. The talks ended inconclusively on 29 December.

Management considers strike unofficial

Soon thereafter, JSW’s management issued a statement to the effect that it would regard the entire affair as an unofficial strike and that strike participants would be punished accordingly. The response of the miners was unexpected, as well as uncompromising: on 4 January 2008, more than 100 miners who were formally employees of JSW since 1 January descended into a mineshaft to continue their protest there.

Negotiations restarted and agreement concluded

The trade unions then demanded that negotiations be resumed, and JSW’s management complied, inviting the unions for talks on 8 January. However, the only workforce representatives who appeared at these talks were from the trade unions which did not support the strike. On the contrary, they accused the protesters of manipulating the workforce and undermining the financial situation of the company.

Successive rounds of interrupted talks, as well as the hunger strike and sit-in protest at the mine, continued until 31 January when an agreement was finally signed. It was decided that wages at Budryk for 2008 will increase by 10% which represents an average increase of PLN 490 (€144) for each worker. In addition, Budryk’s miners would receive a PLN 2,200 (€645) equalisation payment for the preceding year. It was also decided to convene, as of early February, a working team charged with bringing wages at Budryk up to the level of those paid to employees at JSW by 2010, one year earlier than initially planned.

Consequences of strike

Determining any of the parties to the 46-day dispute as a clear winner would be a difficult task. The results of the protest actions can be summarised as follows. First, in terms of economic consequences, the management of JSW estimates the losses attributable to the strike at PLN 70 million (€20.5) and considers that half of this amount could theoretically be recouped by the end of 2008. However, the losses may increase by PLN 5 million (€1.47) due to claims of 15 cooperating companies of Budryk which also reported financial losses as a result of the production standstill.

Secondly, individual employees will be affected as a result of the protest – those who took part in the strike and those who refused to get involved. The former did not receive any pay for January 2008, while the latter will have their pay reduced by PLN 2,400 (€704) due to the colliery’s standstill.

Finally, JSW’s management has already commenced disciplinary proceedings against the protest’s organisers. The company argues that the illegal actions of the individuals concerned entitle it to take such steps, even if the agreement initiating the industrial action stipulates that no disciplinary measures under the Polish Labour Code will be taken until the strike’s legality – or otherwise – has been ruled on by the courts. The management takes the position that this wording of the agreement does not rule out civil claims or prosecution under criminal law, and it has built a number of legal cases on these premises; for instance, against individuals who allegedly committed acts of violence during the protests or brought alcoholic beverages onto the company’s premises. Consequently, seven of the strike’s organisers are now facing dismissal on disciplinary grounds.

Commentary

In the end, the lengthy protest at Budryk involved the mine’s workers, as well as other persons whose interest in the mine and its fate is less direct, such as the miners’ wives or the wife of the Polish president who met with them. On the other hand, the Minister of the Economy, Waldemar Pawlak, refused to get involved. Apart from its direct consequences – namely, financial losses for the Budryk mine, its cooperating companies and its employees – the dispute also triggered once again the debate about the role of trade unions in Poland. Whether or not this debate will bring tangible effects remains to be seen – for example, an amendment of the legislation governing the operation of trade unions, as called for by the head of the regional branch of the Independent and Self-Governing Trade Union Solidarity (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ). Nonetheless, a pessimistic scenario for future developments at Budryk can not be ruled out. The fact that the company began a disciplinary dismissal procedure for some employees who were involved in the recent strike has led the four trade union leaders to go on standby for further protest actions. One can only hope that Budryk will not suffer a reprise of the recent events.

Piotr Sula, Institute of Public Affairs (ISP)

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