Hungary: The representativeness of trade unions and employer associations in the textile and clothing sector

  • Observatory: EurWORK
  • Topic:
  • Published on: 25 July 2013



About
Country:
Hungary
Author:
Judit Lux, Ildikó Krén
Institution:

The Hungarian textile and clothing industry has lost volume and importance during the last 10–15 years. The economic crisis has merely accelerated the process a little since 2008–2009. The larger companies have all closed down, and the trade unions and employer organisation have lost membership and power. The large national companies have been dismantled and today the sector consists mainly of micro- small and medium-sized companies. The Sectoral Social Dialogue Committee for the light industry has never been organised and strong enough to sign a sectoral collective agreement. The short-term future does not look promising for the sector’s social dialogue either.

1. Sectoral properties

1.1 Economic background1.2 Sectoral coverage

This Representativeness study covers companies and employees in the textile and clothing sector, as defined by NACE Rev. 2 code 13 and 14:

13: Manufacture of textiles;

14: Manufacture of wearing apparel.

The decrease in domestic demand, the liberalisation of imports and the global processes have been influenced the Hungarian textile and clothing sector. The sectoral share of the national industrial consumption has drastically decreased from the former 70% (no exact data available about the current rate). The large national companies have been flittered away, thus the sector consists mainly micro-, small and, medium sized companies today. There are only few raw material producers, but a high share of import. 70-80% of inlands products are exported.

According to the data of the Hungarian Central Statistical Office (Központi Statisztikai Hivatal, KSH) there are 59,000 employees in the sector (their number was 82,700 in 2007) who work in 7,000 SMEs. Textile and clothing companies with more than 100 employees are mainly affiliates of foreign companies, hiring employees with agency work contract schemes (90% of the companies are using that ways to perform productivity).

The sector requires large investments in both products and technologies, and is highly exposed to globalisation. Thus the Hungarian textile and clothing sectors’ competitors (China, India, Turkey, etc.) are strong on the market.

The micro and small enterprises’ production is very limited, generally fighting with financial problems, thus they are mainly working as suppliers of sub activities.

There is a high share of women (83%), mainly in physical jobs. The average wages in the sector (textile: monthly HUF 146,464, EUR 520; clothing: monthly HUF 111,715, EUR 400) are low compared to the national averages (monthly HUF 213,054, EUR 760). Nevertheless, in physical positions the average wages are around 70% of the sectoral average wages.

Table 1: Development of sectoral employment and companies
  2001 2011

Number of companies in the sector (including one-person companies and self-employed)

9,479

7,000 SMEs

211 micro enterprises

No large companies

Comment

Nace ’03 – textile industry

LISDC data

Source of company data

KSH

KSH: 2010:

5,129 existing enterprises

354 new enterprises

Aggregate employment

30,000 textile workers

70,000 clothing workers

71,900 (Eurostat)

48,700 (KSH)

Male employment

10%

17%

Female employment

90%

83%

Share of sectoral employment as a % of total employment in the economy

2.6%

1.3%

Source of employment figures

LISDC

LISDC

Aggregate employees

30,000 textile workers

70,000 clothing workers

71,900 (Eurostat)

48,700 (KSH)

Male employees

10%

17%

Female employees

90%

83%

Share of sectoral employees as a % of total employees in the economy

2.6%

1.3%

Source of employee figures

LISDC

LISDC

2. Overview of the industrial relations landscape in the sector

The sectoral social dialogue happens in the framework of the Light Industrial Social Dialogue Committee (LISDC).

Rated, ordinary members are:

  • Mining, Energy and Industry Workers' Trade Union (Bánya-, Energia- és Ipari Dolgozók Szakszervezet, BDSZ)
  • Trade Union of Local Industrial and Municipal Workers 2000 (Helyiipari és Városgazdálkodási Dolgozók Szakszervezete, HVDSZ 2000)
  • Association of Hungarian Light Industry (AHLI) – (Magyar Könnyűipari Szövetség, MKSZ).
  • members:
  • The Textile Section of the National Association of Entrepreneurs and Employers (Vállalkozók és Munkáltatók Országos Szövetsége, VOSZ)

The dialogue is carried out in regular and organised frames. The main level of collective bargaining is the company level, where collective agreements are signed. Sectoral collective bargaining takes place in the LISDC, but no collective agreements have been signed at this level.

The crisis has reduced the number of enterprises and levels of employment.

Among both employers’ organisations and trade unions the options of forming coalitions, cooperation or association are being considered as a consequence of the poor situation of the economy and the sector.

3. The sector’s trade unions and employers’ associations

This report includes detailed information on the following trade unions and employer associations:

(i) trade unions and employers’ organisations which are party to sector-related collective bargaining;

(ii) trade unions (or employees’ interest organisations) and employers’ organisations (or business associations) which are a sector-related member of the sector-related European Union Federation(s) i.e. IndustriAll, the European trade union, or the sector-related European employer/business federation(s), i.e. EURATEX, the European Apparel and Textile Confederation.

This report does not include detailed information on the following organisations, because they fall outside the conceptual scope of the study.

iii) Affiliates to EU-level sectoral social partners, but without members in the sector;

iv) Organisations which are involved in sector-related collective bargaining, but do not represent members in the sector;

v) Organisations which represent members in the sector, but are not involved in sector-related collective bargaining AND are not members of EU-level sectoral social partner organisations.

Table 2: Organisations which fall under criteria iii–v
Organisation – abbreviation Reason for inclusion/non-inclusion into the study

Textile Workers’ Union, the Clothing Workers’ Union, the Leather Workers’ Union

These organisations no longer exist as separate entities, only as parts of the BDSZ

BCE

(v)

MRE

(v)

Textiltisztítók

(v)

BVDOSZ

(v)

4. Collective bargaining in the sector

4.1. Are employees in the sector, as defined in Section 1 above and in Table 1, covered by collective bargaining?

Yes

4.2. If yes, please consider the five main relevant* collective agreements (single-employer and multi-employer agreements) valid in 2012 in the textile and clothing sector and indicate their levels, the name of the agreements, respective coverage in terms of sectors/activities, the bargaining parties to the agreement and the numbers of employees covered within the textile and clothing sector (also estimate):

There is no sectoral collective agreement in the light industrial sector. Local collective agreements are signed, and according to BDSZ’s information there were 21 valid collective agreements at company level in 2012.

Table 3: The five main relevant* collective agreements valid in 2012 in the sector

Level

Common name

Sectoral coverage

No. of employees covered within the sector

Bargaining parties

Employer(s)

(in case of single-employer agreements) or

Employer organisation(s)

(in case of multi-employer agreements)

Trade union(s)

1. B) Single-employer agreements:

- Company

Styl Ruhagyár Ltd. (under liquidation)

 

570

Local management

Shop stewards of Mining, Energy and Industry Workers' Trade Union, BDSZ

2. B) Single-employer agreements:

- Company

KÉZMŰ Fővárosi Kézműipari Nonprofit Ltd

 

552

Local Management

Shop stewards of Trade Union of Local Industrial and Municipal Workers 2000, HVDSZ2000

3. B) Single-employer agreements:

- Company

Sopronkőhidai Szövő- és Ruhaipari Ltd

 

437

Local management

Shops steward of National Trade Union Association of Law Enforcement Workers, BVDOSZ

4. B) Single-employer agreements:

- Company

Szegedi Fonalfeldolgozó Ltd

 

443

Local management

Shops steward of Trade Union of Local Industrial and Municipal Workers 2000, HVDSZ2000

5. B) Single-employer agreements:

- Group

- Company

- Plant

Coats Hungary Ltd.

 

334

Local management

Local member of Mining, Energy and Industry Workers' Trade Union, BDSZ

* Relevance is measured in terms of employees covered.

5. The system of collective bargaining

5.1. 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).

17% of sectoral workers are covered by single-employer collective agreements, according to the data of BDSZ.

5.2. Estimate the relative importance of multi-employer agreements and of single-employer agreements as a percentage of the total number of employees covered.

5.2.1. Is there a practice of extending multi-employer agreements to employers who are not affiliated to the signatory employer association/s?

No, there is no such a practice in Hungary at present

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

Not applicable

6. Formulation and implementation of sector-specific public policies

6.1. Do tripartite bodies dealing with sector-specific issues exist

Table 4: Sector-specific public policies*
Name of the body and scope of activity Bipartite/tripartite Origin: agreement/statutory Trade unions having representatives (reps) Employer associations having reps.

Light industrial Sectoral Social Dialogue Committee:

-commercial strategies/ correspondences/ protections

-EU strategies

-Research and innovation strategies

-Environmental strategies

Bipartite

Statutory: by the law 2009/LXXIV

BDSZ

HVDSZ2000

MKSZ,

And invited member VOSZ

* Sector-specific policies specifically target and affect the sector under consideration.

7. Data on the trade unions

Table 5: Trade union Fact sheet: BDSZ (Mining, Energy and Industry Workers' Trade Union; Bánya-, Energia- és Ipari Dolgozók Szakszervezete)

The union’s domain

 

According to its domain, does the union potentially cover the entire textile and clothing sector, including all of the sub-activities as a whole, as listed above?

Yes

According to its domain, does the union potentially cover all occupations within the textile and clothing sector among both blue-collar workers and white-collar workers?

Yes

According to its domain, does the union potentially cover, within the textile and clothing sector, all forms and size classes of enterprises (for instance: public ownership, private ownership, multinationals, domestic companies, SMEs, etc. – of course, only insofar as they exist in the sector)?

Yes

According to its domain, does the union potentially cover all regions of your country?

Yes potentially, but they are not present in all regions

According to its domain, does the union potentially cover employees outside the textile and clothing sector?

Yes: mining workers

General information on the union

 

Is the union engaged in sector-related collective bargaining?

Yes

If yes, what form of collective bargaining?

Single-employer bargaining – at company level

Sectoral bargaining – in LISDC

How many employees are covered by the collective agreement/s signed by the union within the textile and clothing sector (including those covered via extension mechanisms)?

17%

Type of membership

Voluntary

Is the union consulted by the authorities in sector-related matters?

No

How often do sector-related consultations involve the union?

Information not available

Members

 

How many active members in employment does the union have in total (i.e. within the textile and clothing sector and beyond)?

The data is not public

How many active members in employment does the union have within the textile and clothing sector only?

The data is not public

Affiliations

 

To which international organisations is the union affiliated?

Global IndustriAll

To which European-level organisations is the union affiliated?

IndustriAll

To which national-level organisations is the union affiliated?

National Association of Hungarian Trade Unions (MagyarSzakszervezetek Országos Szövetsége, MSZOSZ)

Source of information

Éva Varga, vice president of BDSZ

Website: http://www.banyasz.hu/

EIRO national correspondent: Judit Lux

Table 5: Trade union Fact sheet: HVDSZ2000 (Trade Union of Local Industrial and Municipal Workers 2000; Helyiipari és Városgazdálkodási Dolgozók Szakszervezete 2000)

The union’s domain

 

According to its domain, does the union potentially cover the entire textile and clothing sector, including all of the sub-activities as a whole, as listed above?

Yes, potentially

According to its domain, does the union potentially cover all occupations within the textile and clothing sector among both blue-collar workers and white-collar workers?

Yes, potentially

According to its domain, does the union potentially cover, within the textile and clothing sector, all forms and size classes of enterprises (for instance: public ownership, private ownership, multinationals, domestic companies, SMEs, etc. – of course, only insofar as they exist in the sector)?

Yes, potentially

But there are no public companies

According to its domain, does the union potentially cover all regions of your country?

Yes, potentially

But they are only in Baranya, Tolna and Vas counties present

According to its domain, does the union potentially cover employees outside the textile and clothing sector?

Yes,

Municipal management, and employers of disabled workers

General information on the union

 

Is the union engaged in sector-related collective bargaining?

Yes, at company level and at sectoral level in the LISDC, but they are not active in it

If yes, what form of collective bargaining?

Single-employer bargaining and sectoral bargaining in the LISC, but they are not active in it

How many employees are covered by the collective agreement/s signed by the union within the textile and clothing sector (including those covered via extension mechanisms)?

There was one collective agreement valid in 2012, covering 12 employees

Type of membership

Voluntary

Is the union consulted by the authorities in sector-related matters?

No

How often do sector-related consultations involve the union?

Not applicable

Members

 

How many active members in employment does the union have in total (i.e. within the textile and clothing sector and beyond)?

8,975 (2012)

How many active members in employment does the union have within the textile and clothing sector only?

152 (2012)

Affiliations

 

To which international organisations is the union affiliated?

PSI

To which European-level organisations is the union affiliated?

EPSU

To which national-level organisations is the union affiliated?

 

Source of information

Trade union: Judit Molnár

Website: www.hdsz2000.hu

EIRO national correspondent: Judit Lux/ Ildikó Krén/ Zsuzsa Rindt

Table 6: Trade union Fact sheet: MOSZTRA (National Federation of Workers’ Councils’ Textile and clothing Workers Section; Munkástanácsok Textil és Ruházati Ágazata)

The union’s domain

 

According to its domain, does the union potentially cover the entire textile and clothing sector, including all of the sub-activities as a whole, as listed above?

Yes

According to its domain, does the union potentially cover all occupations within the textile and clothing sector among both blue-collar workers and white-collar workers?

Yes

According to its domain, does the union potentially cover, within the textile and clothing sector, all forms and size classes of enterprises (for instance: public ownership, private ownership, multinationals, domestic companies, SMEs, etc. – of course, only insofar as they exist in the sector)?

Yes

According to its domain, does the union potentially cover all regions of your country?

Yes

According to its domain, does the union potentially cover employees outside the textile and clothing sector?

no

General information on the union

 

Is the union engaged in sector-related collective bargaining?

No (MOSZTRA left the LISDC in 2009 – as they said: because they did not agree with the regulation of the committee)

If yes, what form of collective bargaining?

 

How many employees are covered by the collective agreement/s signed by the union within the textile and clothing sector (including those covered via extension mechanisms)?

1%

Type of membership

Voluntary

.

Is the union consulted by the authorities in sector-related matters?

No

How often do sector-related consultations involve the union?

No

Members

 

How many active members in employment does the union have in total (i.e. within the textile and clothing sector and beyond)?

200 (in two companies and two prisons)

How many active members in employment does the union have within the textile and clothing sector only?

200

Affiliations

 

To which international organisations is the union affiliated?

IndustriAll global, but the president identified himself as a member of WCL –textile section

To which European-level organisations is the union affiliated?

IndustriAll, but the president identified himself as member of the former Berlin-based European Christian textile workers

To which national-level organisations is the union affiliated?

Workers Councils (Munkástanácsok)

Source of information

Zoltan Lengyel, President

Website: http://www.munkastanacsok.hu/

EIRO national correspondent: Ildikó Krén

8. Data on the employer associations

Employer organisation’s fact sheet, to be separately filled in for each organisation

Table 7: Employer organisation Fact sheet: MKSZ (Association of Hungarian Light Industry; Magyar Könnyűipari Szövetség)

The employer organisation’s domain

 

According to its domain, does the employer organisation potentially cover the entire textile and clothing sector, including all of the sub-activities as a whole, as listed above?

Yes

According to its domain, does the employer organisation potentially cover, within the textile and clothing sector, all (legal) forms and size classes of enterprises (for instance: public ownership, private ownership, multinationals, domestic companies, SMEs, etc.) (of course, only insofar as they exist in the sector)?

Yes

According to its domain, does the employer organisation potentially cover companies, within the textile and clothing sector, in all regions of your country?

Yes

According to its domain, does the employer organisation potentially cover companies and/or business activities outside the textile and clothing sector?

Yes/Training company, Project management. Textile retail and wholesales

General information on the organisation

 

Is the employer organisation engaged in sector-related collective bargaining?

Yes

If yes, what form of collective bargaining?

Single-employer bargaining, sectoral/branch bargaining within the LISDC without signing collective agreements)

How many companies are covered by the collective agreement/s signed by the employer organisation within the textile and clothing sector (including those covered via extension mechanisms)?

Information not available

How many employees are covered by the sector-related collective agreement/s signed by the employer organisation within the textile and clothing sector (including those covered via extension mechanisms)?

Information not available

Type of membership

Voluntary

Is the employer organisation consulted by the authorities in sector-related matters?

In the frames of LISDC

How often do sector-related consultations involve the employer organisation?

On a regular basis in LISDC

Members

 

How many member companies does the employer organisation have in total (i.e. within the textile and clothing sector and beyond)?

25 (2012) according to the website

How many employees work in these member companies in total (i.e. within the textile and clothing sector and beyond)?

Information not available

How many member companies does the employer organisation have within the textile and clothing sector only?

Information not available

How many employees work in these member companies within the textile and clothing sector only?

Information not available

Affiliations

 

To which international organisations is the employer organisation affiliated?

 

To which European-level organisations is the employer organisation affiliated?

EURATEX

To which national-level organisations is the employer organisation affiliated?

MGYOSZ

Source of information

János Tomor, president of MKSZ

EIRO national correspondent: Lux Judit/ Zsuzsa Rindt

Table 8: Employer organisation Fact sheet: VOSZ – Textile (Textile Section of the National Association of Entrepreneurs and Employers; Vállalkozók és Munkáltatók Országos Szövetsége, Textil szekció)

The employer organisation’s domain

 

According to its domain, does the employer organisation potentially cover the entire textile and clothing sector, including all of the sub-activities as a whole, as listed above?

Yes, potentially

According to its domain, does the employer organisation potentially cover, within the textile and clothing sector, all (legal) forms and size classes of enterprises (for instance: public ownership, private ownership, multinationals, domestic companies, SMEs, etc.) (of course, only insofar as they exist in the sector)?

Yes, potentially

According to its domain, does the employer organisation potentially cover companies, within the textile and clothing sector, in all regions of your country?

Yes, potentially

According to its domain, does the employer organisation potentially cover companies and/or business activities outside the textile and clothing sector?

Yes

General information on the organisation

 

Is the employer organisation engaged in sector-related collective bargaining?

Yes, at company level and it is an invited partner to the LISDC

If yes, what form of collective bargaining?

Both single-employer and sectoral bargaining

How many companies are covered by the collective agreement/s signed by the employer organisation within the textile and clothing sector (including those covered via extension mechanisms)?

No sectoral collective agreements have been signed

How many employees are covered by the sector-related collective agreement/s signed by the employer organisation within the textile and clothing sector (including those covered via extension mechanisms)?

Information not available

Type of membership

Voluntary

Is the employer organisation consulted by the authorities in sector-related matters?

Information not available

How often do sector-related consultations involve the employer organisation?

Information not available

Members

 

How many member companies does the employer organisation have in total (i.e. within the textile and clothing sector and beyond)?

53,000

Source: www.vosz.hu

How many employees work in these member companies in total (i.e. within the textile and clothing sector and beyond)?

1.5 million

Source: www.vosz.hu

How many member companies does the employer organisation have within the textile and clothing sector only?

Information not available

How many employees work in these member companies within the textile and clothing sector only?

Information not available

Affiliations

 

To which international organisations is the employer organisation affiliated?

 

To which European-level organisations is the employer organisation affiliated?

UNICE

CEHIC

To which national-level organisations is the employer organisation affiliated?

 

Source of information

Júlia Varga secretary of VOSZ

Anna Hannauerné Szabó president of VOSZ-Textile Section

Website: www.vosz.hu

EIRO national correspondent: Ildikó Krén/ Zsuzsa Rindt

9. Inter-associational relationships

9.1 Inter-union relationships

9.1.1 Please list all trade unions covered by this study whose domains overlap within the sector.

Theoretically there might be an overlap but in fact, correspondent could not find an overlap

BDSZ

HVDSZ

MOSZTRA

9.1.2 Do rivalries and competition exist among the trade unions within the sector, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?

Not applicable – as there is no overlap in practice

9.1.3 If yes, are certain trade unions excluded from these rights?

National Federation of Workers’ Councils’ Textile and clothing Workers Section (Munkástanácsok Textil és Ruházati Ágazata, Munkástanácsok) does not participate in the Light Industrial Social Dialogue Committee as since 1994 it has never provided information or data about its operation and existence in the light industrial sector. According to the president of the union, the section itself decided to leave the LISDC in 2004, as they did not agree with the rules and regulation.

9.2 Inter-employer association relationships

9.2.1 Please list all employer associations covered by this study whose domains overlap within the sector.

MKSZ

Leather and Footwear Industry Association (Bőr- és Cipőipari Egyesülés, BCE),

Association of Hungarian Clothes Manufacturers (Magyar Ruhagyártók Egyesülése),

the Association of Textile Cleaners (Textiltisztító Egyesülés)

VOSZ-Textile

9.2.2 Do rivalries and competition exist among the employer associations within the sector, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?

No, cooperation and coalition building are characterising the employers’ side

9.2.3 If yes, are certain employer associations excluded from these rights?

Not applicable, VOSZ textile section takes part in LISDC as observer

9.2.4 Are there large companies or employer associations within the sector which refuse to recognise the trade unions and refuse to enter collective bargaining?

No, there are 1. no large companies in the sector and 2. there is regular collective bargaining on sectoral issues (leaving out all sectoral wage negotiations)

10. Commentary

The Hungarian textile and clothing sector’s social dialogue situation is – not surprisingly –dominated by the situation of the sector in the country. The decline in the number of jobs and companies in the sector has led to a decrease of social partner organisation through merger processes. Within the LISDC there are – as known from other sectors in Hungary – typically mainly negotiations on professional issues, sometimes leading to joint conferences and articulated standpoints, but no social dialogue on wage issues or working condition. Social partners have undertaken efforts to influence the economic situation of the sector by providing policy advice for the government, without serious results.

The LISDC regularly adopted the new situation by affiliating “newcomers” – like the HVDSZ in 2010 into the committee or termination of affiliation – as in case of the merger of several textile- clothing unions into the BDSZ.

It is highly likely that the organisations participating in the LISDC are representative within the sector – however it is difficult to speak about representativeness in this very small sector as it is characterised by a high number of micro companies without any social dialogue. A collective agreement on wages and working conditions extended to the whole sector (or at least a wage minimum agreement) would reduce precarious working condition and would improve the situation in the sector and also increase the relevance of social partners in the county.

Judit Lux, Ildikó Krén,

Solution4.org

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