Romania: Developments in working life – Q1 2016

Increasing confrontation in industrial relations and government efforts to tackle undeclared work are the main topics of interest in this article. This country update reports on the latest developments in working life in Romania in the first quarter of 2016. 

Social dialogue and collective bargaining

Since  the introduction of the 2011 Social Dialogue Act, which made changes to collective bargaining, Romanian trade unions have striven to maintain representativeness at sectoral level. Several important union federations renewed or obtained representativeness in the first quarter of 2016, but this has not resulted in collective agreements at a sectoral level as the conditions for concluding such agreements are too elusive and obstruct social dialogue.

In the first two months of 2016, two of the five national union confederations (CNS Cartel Alfa and BNS) renewed their representative status until 2020. Although all five confederations are representative, national collective bargaining was abolished by the 2011 Social Dialogue Act.

The Act’s decentralisation of social dialogue led to the focus of collective bargaining shifting to company level, a situation that continued in the first quarter of 2016. Among the most important collective bargaining agreements reached this quarter were those in automotive companies Dacia and Ford. Collective bargaining has been difficult in both companies, but they succeeded in reaching collective agreements on wage increases and bonuses for employees. The automotive sector contributes about 12% to Romanian GDP and dominates exports, accounting for six of the country’s top 10 export businesses. However, the labour cost in this sector is the lowest in the EU at €7.70 per employee.

Blows to the right to strike and freedom of association

Although industrial relations in Romania are among the most confrontational in the EU, official data from Romania’s National Institute for Statistics show that no strikes have taken place since 2010. Trade unions blame restrictive legislation for the lack of strike action, and evidence shows that employers are making use of legal tools to limit the right to strike.

For example, the Free Trade Union of Aeronautic Handling  announced a two-hour strike to be held on 22 January 2016 by employees of GlobeGround Romania, based at the International Otopeni Airport in Bucharest. On the day the strike was due to take place, union representatives had to prove in court that the strike met the legal conditions. Although the conditions were fulfilled and the employer lost the case, the strike could not take place and was indefinitely postponed.

Although freedom of association is guaranteed by law in Romania, trade unions complain that company managers often deter employees from setting up union organisations. This was the case at budget airline Wizz Air, which dismissed trade union leaders and 19 union members in 2014 on disciplinary grounds that a court later ruled had no basis in fact. In March 2016, the Bucharest Court of Appeal ruled that Wizz Air’s appeal against the 2015 decision of the Romanian National Council for Combating Discrimination was unjustified and it must pay the fine originally imposed of RON 25,000 (€5,589 as of 27 April 2016) for discriminating against employees due to their union affiliation. Despite the court’s ruling that Wizz Air should reinstate the dismissed employees, the company continues to prohibit access to the workplace for the president and vice-president of the Aerolimit union (SAP).

Tackling undeclared work

The government continues its efforts to combat undeclared work. The country’s new Tax Code, which came into force on 1 January 2016, states that work may be legally carried out only under an employment contract or a civil contract. In the latter case, the provider must be registered as a self-employed worker (known as an ‘authorised natural person’ or PFA). This removes the possibility of self-employment unless workers are already registered as such, and is expected to reduce the risk of undeclared work.

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