Social partner unrest in chemical and petrochemical industries

The global economic crisis is taking its toll on workers in the Romanian chemical and petrochemical industries. Following a wave of collective redundancies announced by several companies, which may affect more than 6,600 employees, the trade unions and employer organisations in these industrial branches have made a number of requests to the authorities. In addition, workers have staged several protests at various plants around the country.

Economic crisis

Since the beginning of December 2008, the Free Trade Unions Federation of the Chemical and Petrochemical Industries (Federaţia Sindicatelor Libere din Chimie şi Petrochimie, FSLCP) in Romania has expressed its concern regarding the magnitude of the economic crisis in the chemical and petrochemical industries. This field of economic activity has been affected by the gas supply crisis, stemming from a pricing dispute between Russia and Ukraine, and by the lack of demand for chemical fertilisers and other products used in agriculture.

Collective redundancies are planned for a number of chemical fertiliser manufacturers, such as Amonil Slobozia, Donau Chem Turnu Măgurele, Azochim Săvineşti, Viromet Victoria, Nitroporos Făgăraş, Azomureş Târgu Mureş, Oltchim Râmnicu Vâlcea, Doljchim Craiova and Combinatul Chimic Năvodari. These lay-offs might affect over 6,600 employees in a first stage, and this situation compelled FSLCP to persuade the Chemical and Petrochemical Employers’ Federation (Federaţia Patronatelor din Chimie şi Petrochimie, Fepachim) to sign a joint statement on 3 December 2008.

Joint statement by social partners

Together, FSLCP and Fepachim called on the government to initiate – ‘as a matter of urgency’ –rounds of negotiations and consultations with experts from industry and agriculture, and with the social partners, in order to identify measures to save the chemical and petrochemical industry.

In essence, the social partners were seeking support for the agricultural sector through subsidies on the price of chemical fertilisers. FSLCP and Fepachim highlight that the agricultural sector has used less than 5% of the production capacity of the country’s chemical plants.

Trade union protests

The trade unions also threatened to stage protests after their employers announced collective redundancies; some companies have even divulged closure plans. The protests were directed not against the company management, but against the government’s failure to intervene. FSLCP set up a crisis unit, which has organised the scheduling of the demonstrations.

These protest initiatives were pursued by workers at Amonil Slobozia, where over 600 workers received notice of dismissal. The strategy was also adopted by some 500 employees of Donau Chem Turnu Măgurele, who picketed the southern Teleorman county prefecture after the management notified 860 employees out of a total of 1,110 staff that they were to be let go; all of these workers had already been temporarily laid off since 15 November 2008.

Furthermore, 500 trade union members at Azochim Săvineşti picketed the northeastern Neamţ county prefecture in protest against the collective redundancies issued to 541 employees, with effect from January 2009. Meanwhile, over 300 workers at the Nitroporos Făgăraş and Viromet Victoria chemical plants took similar action before the prefecture building in the central city of Braşov.

Trade union demands

The trade unions made the following demands.

  • The companies’ debts to the state budget should be rescheduled.
  • The unemployment benefit should be supplemented by severance pay contributed by employers and amounting to the equivalent of 12 salaries for the month prior to layoff.
  • A €2,000 non-refundable support grant should be paid to redundant workers planning to start a business. Such entrepreneurs should be exempt from paying tax for two years from the time that the business commences, and should enjoy a grace period of 12 months for loans on preferential interest rates.
  • Workers made redundant should receive 90% of the salary earned prior to dismissal, instead of the unemployment benefit currently representing 75% of the minimum wage.

Government meeting

With the above demands on the table, the Minister of Economy, Adriean Videanu, met with the representatives of the trade unions and employer organisations in the chemical and petrochemical industries at a meeting on 10 January 2009. The employers explained to Minister Videanu that the sale price of fertilisers is lower than the cost of the natural gas used in the production process. During the meeting, a proposal was made for the allocation of subsidies to manufacturers of chemical fertilisers by way of emergency financial aid to farmers to help them to buy fertiliser.

Commentary

The agreement reached by FSLCP and Fepachim shows the social partners’ commitment to protecting their interests: the domestic market for the manufacturers and the jobs for the workers. However, the government has to weigh the demands of the social partners with market considerations in terms of gas prices and supply, as well as European Union state aid policies.

It has become customary in any case to shut down chemical facilities during the harsh winter period for the dual purpose of a maintenance overhaul and to save energy, particularly gas, which can then be directed towards the heating of individual homes.

Luminiţa Chivu, Institute of National Economy, Romanian Academy

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