Representativeness of the European social partner organisations: Manufacture of sugar – Latvia

  • Observatory: EurWORK
  • Topic:
  • Published on: 08 July 2008



About
Country:
Latvia
Author:
Raita Karnite
Institution:

The aim of this representativeness study is to identify the respective national and supranational actors (i.e. trade unions and employer organisations) in the field of industrial relations in the sugar manufacturing sector in Latvia. In order to determine their relative importance in the sector’s industrial relations, this study will, in particular, focus on their representational quality as well as on their role in collective bargaining.

Introduction

The sugar industry in Latvia was never large, but it has shrunk from three companies (since the first period of independent Latvia, before 1945) to two companies since 1998 and faces the prospect of complete closure of the industry within two years. Closure of the first company occurred due to poor economic conditions in Jekabpils. Then, in 2006 the two remaining companies, with poor prospects for competitiveness, were confronted with the EU sugar policy and restructuring subsidies were made available to closing companies from EU budgets (more than €48.5 million). This financial stimulus facilitated the companies' decision to close down operations. The employment effect of this decision goes beyond the 630-odd employees in the sugar companies. Farmers too are affected, having been encouraged by frameworks in the Latvian sugar policy (and institutionalised by the Sugar Law) to supply sugar beet to the industry and also invest in agricultural equipment, many of them using EU funds for this purpose.

Social partner organisations in the food industry, including the sugar sector, remained silent on the closure of the sugar companies. Small owners did react, speaking about the protection of the sugar industry in Latvia, but their voices were not heard. Thus, representativeness of Latvia in the manufacture of sugar is largely irrelevant these days.

1. Sectoral properties

In 2006, the sugar sector included two sugar companies: Jelgavas Cukurfabrika (Jelgavas Cukurfabrika, JC) and Liepajas Cukurfabrika (Liepajas Cukurfabrika, LC), employing about 636 people. JC closed in 2007 and LC will be closed within two years.

  1997*** 2006**
Number of companies 3 2
Aggregate employment* 1,271 636
Male employment* 680 402
Female employment* 591 234
Aggregate employees 1,271 632
Male employees 680 400
Female employees 591 232
Aggregate sectoral employment as a % of total employment in the economy 0.17% 0.07%
Aggregate sectoral employees as a % of the total number of employees in the economy 0.17% 0.07%

* employees plus self-employed persons and agency workers

** or most recent data

*** Data for 1994 are not available.

Source: Quarterly Survey of Enterprises and Institutions

2. The sector’s unions and employer associations

This section includes the following unions and employer associations:

1. Unions which are party to sector-related collective bargaining.

  • Trade Union of Agriculture and Food Industry Workers (Latvijas Lauksaimniecības un pārtikas nozaru arodu biedrība, LLPAB)

2. Unions which are a member of the sector-related European Union Federation (i.e. EFFAT – European Federation of Food, Agriculture and Tourism Trade Unions)

  • LLPAB

3. Employer associations which are a party to sector-related collective bargaining

  • None

4. Employer associations which are a member of the sector-related European Employer Federation (i.e. CEFS – European Committee of Sugar Manufacturers)

  • Latvia is represented in CEFS by the company Jelgavas Cukurfabrika.

2a Data on the unions

  • Trade Union of Agriculture and Food Industry Workers (Latvijas Lauksaimniecības un pārtikas nozaru arodu biedrība, LLPAB)

2a.1 Type of membership (voluntary vs. compulsory)

Membership of LLPAD is voluntary.

2a.2 Formal demarcation of membership domain (e.g. blue-collar workers, private-sector workers, food production employees, etc.)

Wide demarcation of membership. LLPAB includes 40 trade union organisations, most of which are focused on the food production sector and 9 in the agriculture sector (trade union organisation associates 3 or more trade union members in one company, organisation or institution, or in several companies, organisations and institutions). Associate unions cover workers in agriculture, processing, food production, fishing, other rural activities, students in relevant study directions, farmers who do not employ workers, and the self-employed.

2a.3 Number of union members (i.e. the total number of members of the union as a whole)

4,194 members (January 2005), of which 184 are non-working members.

3,544 members (January 2006), of which 181 are non-working members.

3,599 members (January 2007), of which 173 are non-working members.

2a.4 Number of union members in the sector

None, since the beginning of 2007. After LLPAB's involvement in social dialogue about the closure of the sugar factories, all workers in the sector were withdrawn from the union and the trade union organisations in both companies were closed down.

2a.5 Female union members as a percentage of total union membership

54% female membership (2,286 workers) in 2004.

59% female membership (2,137 workers) in 2007.

2a.6 Density with regard to the union domain (see 2a.2)

57% of total number of employed in enterprises with TO (January 2005).

50% of total number of employed in enterprises with TO (January 2006).

49.7% of total number of employed in enterprises with TO (January 2007).

2a.7 Density of the union with regard to the sector

None.

2a.8 Does the union conclude collective agreements?

LLPAB is eligible to conclude sector-level collective agreements.

2a.9 For each association, list their affiliation to higher-level national, European and international interest associations (including cross-sectoral associations)

LLPAB is affiliated at national level to the Free Trade Union Confederation of Latvia (Latvijas Brīvo Arodbiedrību savienība, LBAS); at regional level to the Association of Agriculture and Food Industry Workers Trade Unions of Baltic States; and at international level to the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT).

2b Data on the employer associations

Neither of the two sugar companies were members of the sector-level employer associations, which are the Latvian Federation of Food Enterprises (Latvijas Pārtikas uzņēmumu federācija, LPUF) and the Latvian Association of Sugar-beet Planters (Latvijas Cukurbiešu audzētāju apvienība). Neither were the companies members of the national-level social dialogue organisation, the Latvian Employers’ Confederation (Latvijas Darba Devēju konfederācija, LDDK).

2b.1 Type of membership (voluntary vs. compulsory)

Not relevant.

2b.2 Formal demarcation of membership domain (e.g. SMEs, small-scale crafts/industry, food-production industry, etc.)

Not relevant.

2b.3 Number of member companies (i.e. the total number of members of the association as a whole)

Not relevant.

2b.4 Number of member companies in the sector

Not relevant.

2b.5 Number of employees working in member companies (i.e. the total number of the association as a whole)

Not relevant.

2b.6 Number of employees working in member companies in the sector

Not relevant.

2b.7 Density of the association in terms of companies with regard to their domain (see 2b.2)

Not relevant.

2b.8 Density of the association in terms of companies with regard to the sector

Not relevant.

2b.9 Density in terms of employees represented with regard to their domain (see 2b.2)

Not relevant.

2b.10 Density in terms of employees represented with regard to the sector

Not relevant.

2b.11 Does the employer association conclude collective agreements?

Not relevant.

2b.12 For each association, list their affiliation to higher-level national, European and international interest associations (including the cross-sectoral associations).

Not relevant.

3. Inter-associational relationships

3.1. Please list all unions covered by this study whose domains overlap.

None.

3.2. Do rivalries and competition exist among the unions, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?

Not relevant.

3.3. If yes, are certain unions excluded from these rights?

Not relevant.

3.4. Same question for employer associations as 3.1.

Not relevant.

3.5. Same question for employer associations as 3.2.

Not relevant.

3.6. Same question for employer associations as 3.3.

Not relevant.

4. The system of collective bargaining

4.1. Estimate the sector’s rate of collective bargaining coverage (i.e. the ratio of the number of employees covered by any kind of collective agreement to the total number of employees in the sector).

Members of the LLPAB trade union have concluded 28 collective agreements at company level, of which two were in the sugar companies. Regional trade union organisations have concluded one general agreement, but this is not in the sugar sector. General (sector) agreement is not concluded.

4.2. Estimate the relative importance of multi-employer agreements and of single-employer agreements as a percentage of the total number of employees covered. (Multi-employer bargaining is defined as being conducted by an employer association on behalf of the employer side. In the case of single-employer bargaining, it is the company or its subunit(s) which is the party to the agreement. This includes the cases where two or more companies jointly negotiate an agreement.)

Multi-employer agreements are not concluded.

4.2.1. Is there a practice of extending multi-employer agreements to employers who are not affiliated to the signatory employer associations?

Not relevant.

4.2.2. If there is a practice of extending collective agreements, is this practice pervasive or rather limited and exceptional?

In accordance with the Labour Law, Article 18(4) states that a sector collective agreement (general agreement) is extended to all employees in the sector (branch) if it covers 50% of the total number of employees in that sector (branch). But general agreement is not concluded.

4.3. List all sector-related multi-employer wage agreements* valid in 2005 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered

Not relevant.

5. Formulation and implementation of sector-specific public policies

5.1. Are the sector’s employer associations and unions usually consulted by the authorities in sector-specific matters? If yes, which associations?

Yes. For example, LLPAB participated in preparations for the restructuring of the sugar industry and the ultimate closure of the enterprises, contributing to decisions that made the social costs less harmful for employees. These included a gradual closing of the sugar companies (the LC factory will be closed within two years), compensation for employees affected and cooperation with the State Employment Agency (Nodarbinātības Valsts aģentūra, NVA) on assistance for job-seekers and retraining.

5.2. Do tripartite bodies dealing with sector-specific issues exist? If yes, please indicate their domain of activity (for instance, health and safety, equal opportunities, labour market, social security and pensions etc.), their origin (agreement/statutory) and the interest organisations having representatives in them:

No.

6. Statutory regulations of representativeness

6.1. In the case of the unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.

No. Regulations exist at company level, involving the two parties of employer and trade union (or employee representatives if trade union is not established).

At sectoral level, both parties to the collective agreement must be mandated to conclude the agreement or the right to conclude the agreement must be written in the statutes of the organisation (Labour Law, Article 18).

6.2. In the case of the unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.

No.

6.3. Are elections for a certain representational body (e.g. works councils) established as criteria for union representativeness? If yes, please report the most recent electoral outcome for the sector.

No. Representatives are nominated.

6.4. Same question for employer associations as 6.1.

Not relevant.

6.5. Same question for employer associations as 6.2.

Not relevant.

6.6. Are elections for a certain representational body established as criteria for the representativeness of employer associations? If yes, please report the most recent outcome for the sector.

Not relevant.

7. Commentary

The sugar industry in Latvia started to shut down in 2007 and will be closed within two years. It is doubtful whether better representativeness in the sector would have ensured the continued operation of companies since the restructuring was demanded by the Latvian Ministry of Agriculture (the state institution responsible for sugar policy) and supported by regressing financial stimulus from EU institutions. The regressing financial stimulus meant that the amount of restructuring subsidies from EU budgets declined as time went on, thus encouraging companies to start restructuring as soon as possible.

Raita Karnite, Institute of Economics, LAS

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