Protests and social unrest over wage arrears

Unpaid wages led to protests and strikes in companies across Bulgaria during 2012. Industrial relations problems caused labour conflicts and social tension among metal miners at the Gorubso Madan plant, and at state-owned companies Irrigation Systems EAD and military engineering plant Sopot EAD, among others. The Labour Inspectorate said about 500 companies had failed to pay workers regularly. Trade unions called for urgent legislation to tackle the problem.

Background

The irregular and delayed payment of wages is a problem that has dogged periods of transition and economic reform in Bulgaria, but it is especially acute in times of crisis. The Bulgarian Government seems to have had a significant impact on the worsening of the situation. Wages have not been paid regularly in state-owned companies such as Irrigation Systems EAD and military engineering plant Sopot EAD. The Government also owes money to companies in the private sector.

According to the latest data from the Bulgarian Industrial Association (BIA), one of the four nationally representative employers’ organisations, the government owes private sector firms BGN 457 million (€233 million as at 13 February 2013). Figures showed that, for their part, private firms owed a total of BGN 157 billion (€80 billion). Of this, intercompany debt accounted for BGN 104 billion (€53 billion), with BGN 53 billion ( €27 billion) owed to employees, banks and the government.

The irregular payment of wages led to some dangerous and unstable situations in 2012. Increasing social tension arose because more households could not meet their monthly expenses and obligations to the banks. Debts from home loans exceeded 21% of the household’s income.

Spreading protests and strikes

The General Labour Inspectorate (GLI) set up a monitoring operation to look into unpaid wages and found more than 13,300 violations between January and October 2012. The initiative had a partial effect, with BGN 60 million (€30 million) paid to workers after the intervention of the inspectors, but the problems continued.

Strikes and protests, which began at metal mining plants Gorubso Madan and OZK Kardzhali, were continued in other industries and sectors. According to the GLI, employers in sectors such as construction, the manufacture of food products, retail and haulage were the worst offenders when it came to unpaid wages. State enterprises in the machine-building sectors and agriculture were also guilty of not paying workers on time.

More than 2,000 workers from the military engineering plant Sopot EAD launched indefinite strikes, rallies and road blocks when an agreement to pay their salaries was not honoured. The agreement was signed on 20 November 2012 between the company’s management team and the leadership of the Confederation of Independent Trade Unions (CITUB) and the Confederation of Labour (CL Podkrepa). It laid down rules for the gradual payment of salaries due from September onwards, but its terms were ignored by the employers.

The accumulated debt at the beginning of December 2012 to the 3,100 workers was BGN 2.3 million (€1.2 million), not including social insurance contributions.

The united strike committee and company representatives from CITUB and CL Podkrepa said industrial action would continue until all the money due to employees was paid. A process of privatisation at Sopot has been going on since July 2012, and the slow progress of its implementation has meant additional uncertainty for workers over the possible effects of the change.

There were more protests over unpaid wages at Irrigation Systems EAD. The state-owned company, with offices across the country, owed wages and social security contributions amounting to BGN 1.847 million (€940,000). On 14 December 2012, after extensive negotiations broke down, more than 500 workers held a demonstration in Sofia calling for the immediate payment of the wages they were owed before the Christmas holidays.

Reaction and unrest

The worsening situation and the need for effective implementation of the European Directive to Combat Late Payments provoked the government to change the Trade Act. The new regulation allowed a maximum period of two months within which the state must repay what it owed to a business, and 30 days for payment between companies – unless the partners had agreed otherwise between themselves.

According to CITUB President Plamen Dimitrov, however, many of the problems concerning wage bargaining and rights relating to the payment of wages have not been solved. CITUB called for the urgent legal reform that would make it possible for employees to demand unpaid wages from an employer without having to go to court. This, according to CITUB legal experts, would save employees the cost of a lawyer and of going to court.

Commentary

There have been alarming first signs of aggression in the relationship between employers and employees which go beyond normal, publicly accepted industrial relations.

There were two cases of assault over unpaid wages within a few days of each other in early December 2012, and in one of those cases the employer was so badly beaten that he died later in hospital. In the other case, an employer used a weapon to defend himself from an attack. Obviously, it is vital that appropriate action – legal or economic – is taken to control the problems of debt, including the issue of unpaid wages.

Lyuben Tomev, ISTUR

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