Surviving ‘Frontal Assault' on Collective Bargaining Institutions in Romania: The Case of Manufacturing Companies
The recent crisis led to different levels of change in industrial relations in the EU members’ states, with Romania being an extreme case of disorganised decentralisation of collective bargaining. The deregulation of the labour market by the centre-right government (with the support of the Troika and foreign investors), affected both the individual and collective rights of employees. The Labour Code amendments made it easier for employers to hire-and-fire employees and to use flexible working time arrangements, while the Social Dialogue Act (SDA) adopted in 2011, diminished fundamental collective rights of employees to organise, strike and bargain collectively (Trif, 2013). This ‘frontal assault’ on multi-employer collective bargaining (Marginson, 2014) led to a transformation of the regulatory framework from a statutory system that supported collective bargaining at the national, sectoral and company levels to a so-called ‘voluntary’ system, which made it almost impossible to negotiate new national and sectoral collective agreements between 2011 to 2014 (Trif, 2014). Nevertheless, it is not known to what extent the legal changes have affected company level collective bargaining.
This paper investigates the impact of the labour law changes after 2008 on the terms and conditions of employment in selected companies operating in the metal and food sectors, where trade unions are relatively strong. It focuses on key factors that led to changes in the terms and conditions of employment for employees, by employing a multi-level research methodology. It is based on a total of 25 in-depth interviews with key informants conducted in 2014; more specifically, five interviews were conducted at the national level with two trade union officials, an employers’ associations official and two government officials; five trade union officials were interviewed at the sectoral level; and 15 interviews were conducted in five metal companies and a food company; the selection of the companies aimed to cover extreme cases of changes and continuity in the terms and conditions of employment and collective bargaining developments from the best case scenario (Metal_1, Metal_2, Metal_3 and Metal_5) to the worst case scenario (Food_4 and Metal_6).
In a context of decentralised collective bargaining, it is not surprising that the case studies illustrate great variation concerning the impact of reforms on the actual terms and conditions of employment. The degree of change varied from radical changes in Food_4 and Metal_6 cases to a large degree of continuity in the Metal_5 case, with the other cases between those two extremes. In the case studies where the demand for their products decreased since the recession, employers used the new provisions of the Labour Code to get more flexible working time and atypical employment contracts (i.e. Metal_1, Metal_2 and Metal_3). Whilst working time arrangements have been changed unilaterally by employers, wages and other terms and conditions of employments have been negotiated via collective bargaining in five cases which have representative unions.
The findings suggest that the extent of change in the terms and conditions of employment is contingent on three sets of inter-related factors;
(a) First, it depends on the attitude of the employer (and senior management) to employees and their representatives; the attitude of the employer varied from rather cooperative in the Metal_5, Metal_2 and Metal_3 cases, to hostile in Food_4 and Metal_6 cases.
(b) Second, it was somewhat unexpected that union officials as well as managers interviewed considered that the local labour market and developments in collective bargaining in other large companies in the area affect more the provisions of collective agreements than the strength of the company trade union; in all five companies which had a collective agreement, both unions and managers considered that the outcomes of collective bargaining in other local companies affected the process and the outcomes of collective bargaining in their company; Metal_6 was considered by a union official as a ‘rule maker’, in the sense that it was the first company in the region where the senior management implemented the new provisions of the SDA, despite having a rather strong trade union.
(c) Finally, the union strength has also affected company collective bargaining, particularly in Metal_5 and Metal_1 cases, where unions have proven their capacity to mobilise their members in the last five years; furthermore, the worst deterioration of the terms and conditions of employment was in the Food_4 case, which was not unionised; the hostile attitude of the senior managers towards employees in the Food_4 case led to the formation of a company trade union in 2014.
Although this paper confirms that the strength of the local unions affects the outcomes of company level collective bargaining, the findings suggest that the attitude of employers/senior management to employees is the main factor that influences the terms and conditions of employment in a decentralised system of collective bargaining.
Similar to other Southern European countries, particularly Greece, the Romanian labour laws that supported collective bargaining have been radically changed after 2008, which led to a rapid demolition of the collective bargaining institutions at national and sectoral levels (Koukiadaki and Kokkino, 2014; Marginson, 2014). These changes empowered employers to reduce individual and collective employment rights and weakened the influence of trade unions in many unionised companies. These developments in collective bargaining and industrial relations support the view that statutory labour laws are not sufficient to uphold employment rights (Hyman, 2014). The paper emphasizes the importance of the national and sectoral level trade unions to safeguard employment rights.
References
Hyman, R (2014) The future of the European Social Model – new perspectives for industrial relations, social and employment policy in Europe? IREC, Dublin, 10-12 September (unpublished)
Koukiadaki, A. and Kokkino, C (2014) The Reform of Joint Regulation and Labour Market Policy during the Crisis: the Case of Greece, EU Project VS20130409, available at https://research.mbs.ac.uk/european-employment/Portals/0/docs/SDDTEC/Greece%20national%20report%20%283%29.pdf
Marginson, P. (2014) ‘Coordinated bargaining in Europe: From incremental corrosion to frontal assault?’ European Journal of Industrial Relations, April 15, 2014 0959680114530241
Trif, A. (2013) ‘Romanian collective bargaining institutions under attack’, Transfer: European Review of Labour and Research 19 (2), 227-237
Trif, A. (2014) Die Antwort der rumänischen Gewerkschaften auf die Krise 2008, WSI-Mitteilungen, Hans Bockler Stiftung, 5: 378–384.