Decent redundancy package breaks deadlock in freight rail protest

In December 2009, the National Railway Freight Company (CFR Marfă) forwarded to the trade unions the draft of a collective dismissals project targeting 6,380 employees. Although the unions rejected the proposal, CFR Marfă management notified its personnel redundancy intentions to the public employment service and the labour inspectorate. The generous redundancy package has tempered trade unions’ disapproval of the plan.

Increasing tensions over restructuring plans

Rail transport in Romania is managed mainly by three large state-owned companies – the National Company for Passenger Railway Transportation CFR Călători SA (Societatea Naţională de Transport Feroviar de Călători CFR Călători SA, CFR Călători), the National Railway Freight Company CFR Marfă SA (Societatea Naţională de Transport Feroviar de Marfă CFR Marfă SA, CFR Marfă) and the National Railways Company (Compania Naţională de Căi Ferate CFR SA, CFR SA), which is responsible for railway infrastructure (RO0710039Q). In 2009, these three companies had a total number of about 64,000 employees, distributed as follows: 17,000 in CFR Călători, 19,000 in CFR Marfă and 28,000 in CFR SA.

Due to the economic crisis, the budget allocations earmarked by the Ministry of Transport and Infrastructure (Ministerul Transporturilor si Infrastructurii, MT) required a deep restructuring process, which started in 2009. As early as March 2009, the Minister of Transport and Infrastructure, Radu Berceanu, made public the government’s intention to cut over 12,000 jobs, of which 5,950 would be in freight transport, 2,550 in passenger transport and 3,500 in sectoral infrastructure.

The eight major representative trade unions in the railways sector reacted promptly to this announcement. After negotiations, the parties agreed on the retirement, during 2009, of some 3,700 employees in the three companies, 1,300 of them being freight workers employed by CFR Marfă.

However, in December 2009, the trade unions were notified of the plan to dismiss another 6,380 workers in CFR Marfă by March 2010.

Trade union reaction to collective dismissals notice

On 11 December 2009, the trade union leaders publicised their ‘protest against the unilateral redundancy measures against 6,380 employees, taken in violation of social dialogue rules’. Their protest demanded the immediate withdrawal of the draft collective dismissals plan, which had been made without prior consultations with the trade unions.

The management of CFR Marfă invited the leaders of the trade union federations to discussions on 16 December. The unions were told that salary negotiations for 2010 could only begin after the company’s budget of revenues and expenses was approved, as requested by International Monetary Fund (IMF) officials.

Trade union leaders quoted the legal provisions that bind employers to organise, in due time, consultations whenever collective dismissals are contemplated. They also invoked the legal requirement that the budget should have been approved by 30 November 2009. In addition, the trade unions demanded observance of the stipulations in the current collective agreement, which the management had already disregarded in 2009.

Before this meeting took place, the National Trade Union Confederation ‘Cartel Alfa’ (Confederaţia Naţională Sindicală ‘Cartel Alfa’, Cartel Alfa) had complained to the government (Guvernul României) that for three years CFR Marfă had operated without duly approved annual budgets. In the opinion of Cartel Alfa, this was ‘an attack on the right of collective bargaining enshrined in Convention No. 98 of the International Labour Organization (ILO)’, and the confederation declared that a complaint on this issue would be filed with the ILO.

On 8 January 2010, the management notified the public employment service and the local labour inspectorate of the draft collective dismissals plan for CFR Marfă, planned for February–March 2010, specifying that no agreement on the proposal had yet been reached with the trade unions.

The trade unions continued to express their anger about the situation, threatening to proceed to protest movements and strike action.

Redundancy package

On 29 January 2010, the government issued an ordinance regarding the redundancy package for the personnel let go from the railway transport companies. According to the ordinance, the redundant workers would receive, commensurate to each individual’s length of service, 12–15 months of pay equal to the net average salary of the last three months prior to dismissal.

Commentary

After this ordinance was issued, the trade unions took no further protest action, which may be construed as an acceptance of the government’s proposal. However, the collective dismissals selection criteria may generate further controversies and turmoil in the railways sector.

The magnitude of the severance pay offered by the government probably reflects the large number of railway workers and the strength of the representative trade unions. This precedent may serve as an argument for workers to be laid off in other public services.

Luminiţa Chivu, Institute of National Economy, Romanian Academy

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