Effect of the National Bipartite Agreement

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Five of Romania’s trade union confederations and four of its 13 employer organisations have been taking concerted action since early 2012, following their decision to enter into a National Bipartite Agreement in October 2011 that declared their recognition of each other as social dialogue partners. They have since worked together to protest at unilateral government changes to labour law and social dialogue mechanisms and to demand a return to consultation with the social partners.

Unions and employers join forces

On 17 January, the then Romanian Prime Minister Emil Boc was sent an open letter informing him of the decision of five trade union confederations and four employer organisations that they would not take part in meetings of the new National Tripartite Council for Social Dialogue (CNTDS) (RO1202029I).

The signatories were:

  • the Cartel Alfa National Trade Union Confederation (CNS Cartel Alfa);
  • the National Confederation of Free Trade Unions of Romania Frăţia (CNSLR Frăţia);
  • the National Trade Union Bloc (BNS);
  • the Confederation of the Romanian Democratic Unions (CSDR);
  • the National Trade Union Confederation Meridian (CSN Meridian);
  • the Confederation of Romanian Employers in Industry, Agriculture, Construction and Services (CONPIROM);
  • the Romanian Employers’ Organisation (PR);
  • the General Union of Romanian Industrialists 1903 (UGIR 1903);
  • the National Union of Romanian Employers (UNPR).

On 15 February, they sent the new Prime Minister, Mihai Răzvan Ungureanu, another open letter saying they would not resume talks until the powers of the Economic and Social Council (CES) have been restored. They also requested the reinstatement of technical unemployment that allows workers to be laid off for three months rather than permanently dismissed, as an emergency measure to maintain jobs and support industry, to be used by employers in financial difficulties (RO1002029I).

Background to the National Bipartite Agreement

Tied to a loan agreement with the International Monetary Fund (IMF), the World Bank (WB) and the European Commission (EC), the Romanian government introduced legislation affecting the labour market and industrial relations in 2010 and 2011 without going through the usual parliamentary procedure.

New legislation included the Unitary Pay Act (RO1002049I), with amendments to the Labour Code (under Act 53/2003, amended and republished in 2011) (RO1012039I), and the new Social Dialogue Act (62/2011) (RO1107029I).

One of the major changes brought about by these initiatives was the abolition of the national collective agreement, making negotiations on wages and working conditions possible only at sectoral, group of companies and company level.

The transition from national and branch collective bargaining to sectoral bargaining requires a new definition of economic sectors and new criteria of representativeness, participation in negotiations and execution of collective agreements. This affects both the unions and employers, and is neither easy nor quick to sort out.

Amendments to the Social Dialogue Act deprived the Economic and Social Council (CES) of any role in collective bargaining and provided for the formation of a National Tripartite Council for Social Dialogue (CNTDS), chaired by the prime minister. However, the new body was slow to convene, delaying talks and hindering the operation of the collective bargaining system.

Faced with the expiry of the national collective agreement and of collective agreements for some of the industrial branches which could no longer be extended under the new legislation (Act 62/2011), the five union confederations and four employer organisations signed a convention (66Kb PDF) on 27 September 2011. Its provisions included:

  • a demand that the prime minister should allow the CNTDS to debate the social partners’ anti-crisis proposals;
  • an agreement to enter into a national agreement for the reestablishment of bilateral relations between employers and trade unions in economic sectors jointly agreed upon, and this to be submitted to the government for approval through appropriate legislation;
  • cooperation between the covenant’s signatories to draft amendments that could eliminate the negative effects of the government’s unilateral changes to social dialogue mechanisms and labour law;
  • a demand for the reinstatement of sectoral committees as the main social dialogue structures.

Objectives of agreement

The outcome was the National Bipartite Agreement (NBA) between the union federations and employers’ bodies that had signed the convention. They declared that it had been created in accordance with the principles of equality of rights, free consent and consensus, and that it embodied the ‘mutual recognition of the parties’ capacity to act as social dialogue partners for national bargaining, agreement on the definitions of economic sectors, and of the concept of “group-of-units”, in line with the applicable legislation’.

The NBA contained the following objectives for its signatories.

  • The signatories are to contribute to the strengthening of the role of social dialogue, through means such as negotiation of collective agreements in all companies where they have members, and by finding employee representatives in companies where no unions exist to mediate conflicts.
  • They will return to tripartite social dialogue, but only when the CES has been freed of political interference and its leadership transferred to a person nominated by union consensus, and when the proportion of employer representatives in tripartite talks is determined by the number of branch or sectoral collective agreements signed by them the previous year.
  • Joint proposals will be drafted for the amendment of the Social Dialogue Act 62/2011, the Labour Code (Act 53/2003, amended and republished in 2011), and for the improvement of the legislation regulating social security.
  • Joint strategies will be created for sustainable economic development, including policies for employment, wages, tax, health and labour safety.
  • A group will be set up to monitor and assess the real chances for growth of the minimum wage and average salary;
  • They will take joint action to improve the business environment, the social climate and the management of the labour market, including deterring tax evasion and reducing social insurance contributions.

The NBA is valid for four years and is open to review through negotiation. Other employer confederations may become signatories.

Commentary

The NBA is remarkable for its scope and its shared vision between employers and employees of ways out of Romania’s economic and social crisis. The employer organisations involved have said that their members employ 62% of all active labour and contribute more than 65% of Romania’s gross domestic product.

The NBA also indicates a split in the employer movement of Romania while the country’s remaining nine employer organisations refuse to sign it, but continue to take part in talks at the invitation of the government. It may be that the balance of power between NBA and non-NBA employers will be decided by court rulings on issues of representation expected in the near future.

So far, while the unions have formally filed to re-obtain recognition at national level, – applications can be found on the site of the Ministry of Labour, Family and Social Protection (MMFPS), indicating the number of their members – no employer organisation appears to have taken steps to regain its representative status.

Luminiţa Chivu, Institute of National Economy, Romanian Academy

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