One-day strike in public sector over new pay bill

After about six months of negotiations, on 15 September 2009, the Romanian government forwarded to the parliament the draft framework on public employees’ unitary pay law. The reforms triggered discontent among staff in education, health and public administration. A total of 11 trade union federation representatives in the public sector have set up an alliance and threatened a series of protests, culminating in a one-day general strike on 5 October 2009.

National economic context

In recent years, the Romanian economy registered an annual growth rate of 6% to 8%, which generated an increase in the salary funds covered by the state budget up to some 8% of gross domestic product (GDP). There was also pressure in the private sector for salary increases.

A survey conducted by the World Bank in 2008 revealed the non-sustainability of the pay system in the Romanian public sector. Part of the problem was the large number of regulatory acts on pay in the public sector – amounting to 39 laws, according to the Prime Minister, Emil Boc. Furthermore, great differentials existed between the minimum wage and the maximum earnings of some categories of employees in the public sector, and some positions and occupations had an unreasonably high share of the variable part of monthly earnings.

Against a background of economic and financial turbulence that generated a budget deficit of some 7% of GDP, the Romanian government (Guvernul României) applied to the International Monetary Fund (IMF) and the European Commission for two loans totalling about €20 billion.

Talks on pay scales

Seeking to find a sustainable solution to the structural problems affecting the financial and budgetary balance, the Romanian government took the initiative of drafting several bills. Two of these bills – the framework on unitary pay law for employees in the public sector and the government agencies reorganisation law – will have direct and long-lasting effects on the wage earnings and jobs of over 1.3 million persons paid from the state budget.

The bargaining over the new framework law started about six months ago, between the government, five national trade union confederations and employer organisations representative at national level. After the first rounds of talks, the parties agreed on the general principles and on a ratio of 1:15 between the minimum wage and maximum earnings in the public sector. The uppermost limit is for the president of the republic, the presidents of the two chambers of parliament, the prime minister and members of the cabinet.

Trade union discontent

After negotiating the salary grid with the social partner representatives, the Minister of Labour, Family and Social Protection (Ministerul Muncii, Familiei şi Protecţiei Sociale, MMFPS), Marian Sârbu, announced the reduction of the basic coefficients by about 40%. This move became a first cause of dissatisfaction for several groups of public sector employees.

Another source of dissatisfaction emerged when, during the completion phase of the law, Minister Sârbu and the Minister of Public Finance, Gheorghe Pogea, decided to reduce the ratio between the highest and lowest salaries from 1:15 to 1:12 and to reconfigure the salary grid accordingly. The threshold salary (coefficient 1) is the monthly minimum wage of RON 705 (about €168, as at 29 September 2009).

The law was forwarded to the parliament on 15 September 2009, to be enacted without debates, based on the government’s responsibility for it, and is to take effect on a phased basis during the period 2010–2015. The law prescribes that, during the implementation phase, no public wage earner will suffer from a reduction of their gross wage earnings due under the current legislation.

Numerous points of contention

The trade unions’ list of demands reflects their disapproval of a number of issues, namely the:

  • places allocated in the grid to various occupations and professional groups;
  • uncertainty surrounding earnings in the coming years;
  • elimination of fringe benefits, particularly those related to length of service and working conditions;
  • government’s decision to institute a compulsory 10-day unpaid leave of absence during the period October to December 2009 for each public servant;
  • redundancies planned for personnel on government pay;
  • elimination of wage bonuses;
  • government’s violation of social dialogue, by assuming responsibility for this law.

Protests of new trade union alliance

The government negotiated the law with representatives of the national-level trade union confederations. However, on 10 September 2009, leaders from the second level of trade unions, representing various categories of state employees, set up the Alliance of Budgetary Employees (Alianţa Bugetarilor). This grouping brings together 11 trade union federations: three from education, one from health, five from finance and central and local public administration, and two from the police and the penitentiary system.

Moreover, the entire justice system has been in conflict with the government for over a month. Altogether, this means that some 1.3–1.4 million public employees are in conflict with the government over salary issues.

The new alliance threatened to take the following actions:

  • mobilise about 2,000 people to picket the parliament building, which they did on 15 September, the date when the government assumed its responsibility for enacting three laws (the two discussed above and the education law);
  • picket, on 30 September, the headquarters of the two political parties forming the ruling coalition – the Democratic Liberal Party (Partidul Democrat-Liberal, PD-L) and the Social Democratic Party (Partidul Social Democrat, PSD);
  • call a one-day general strike on 5 October and mobilise employees in the private sector to join them;
  • stage a protest march from the government buildings to the parliament on 7 October, the World Day for Decent Work;
  • petition the Ombudsman (Avocatul Poporului, AP) on the unconstitutionality of some of the provisions in the legislative package for which the government assumed responsibility;
  • collect the number of signatures required to resubmit these laws to parliamentary debate;
  • persuade all state employees to abstain from going to the polls for the election of the president of the republic.

Negotiating trade unions also critical

The national trade union confederations with which the government negotiated the package were also critical of the proposed laws. A statement from the National Trade Union Confederation ‘Cartel Alfa’ (Confederaţia Naţională Sindicală ‘Cartel Alfa’, Cartel Alfa) summarises their views, declaring that the draft forwarded to parliament ‘no longer reflects either the initial understandings or the principles of social cohesion from which it all started’.

Cartel Alfa proposes that the reference base for the salary grid should be the minimum wage at national level agreed through collective bargaining, not the minimum wage set by government decision for the public sector.

Commentary

Although the pay grid for the various groups of budgetary employees is marred by a large number of inconsistencies and conflicting principles, due to the extensive lawmaking of the past 20 years, a first step towards disentangling this bundle could be made by eliminating discrimination and removing all cases of violation of the principle ‘equal pay for equal work’.

It is equally true, however, that the reshuffling of the entire pay system according to principles, criteria and values promoting competitiveness and efficiency is hard to achieve at short notice. This is particularly true during an economic crisis, which always worsens tensions and blurs a long-term, strategic vision.

Constantin Ciutacu, Institute of National Economy, Romanian Academy

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