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Collective Bargaining

The system has been fundamentally changes by legislation passed in 2011 and collective bargaining at national level, which previously set minimum pay and conditions for the whole economy, has been abolished. There are also new rules for bargaining at industry and company level, which has weakened the position of unions.

The framework

 

 

The present situation is that collective agreements can be negotiated at industry level, at company/organisation level and for groups of companies. Legislation also used to provide for negotiations to take place at national, level. However, the national level agreements, which were the most important in setting minimum terms and conditions and covered all Romanian employees, were abolished in a new Social Dialogue Act passed in 2011.

 

 

Large parts of the economy used also to be covered by industry agreements, and at this level too major changes have been made. In particular, industry agreements are only binding on the whole industry if the employers’ associations that sign them employ more than half the employees in the industry concerned and the extension has been requested by the signatories and approved by the national tripartite council. If this is not the case they are treated as agreements for a group of companies and only cover companies belonging to the organisations that have signed them.

 

 

Negotiations at industry level have also been disrupted by disputes between the government and the unions and employers as to how industries should be defined, as well as the need for both unions and employers’ associations to show that they have sufficient members to be entitled to negotiate industry agreements (see below).

 

 

At company level, there is a legal obligation to negotiate – although not to reach agreement. The employer should initiate the process. This obligation applies where the company has 21 or more employees, and, on 31 December 2012 there were 8,783 collective agreements (including additions to existing agreements) concluded at company level. This compares with 7,473 at the same point in 2011 and 7,718 in 2010.1

The new Social Dialogue Act continues to state that agreements at a lower level cannot contain clauses providing for worse conditions than those negotiated at a higher level.

 

 

In cases where the union is strong – normally larger companies and often those with continuing state involvement – these agreements provided significant improvements on the national agreement. However, there are large numbers of companies where the agreements are essentially formal in character and in the past did not improve on the national minimum arrangements. It remains to be seen how negotiations will develop now the national agreement has been abolished. In addition, companies with fewer than 21 employees – a substantial proportion in Romania – are not obliged to negotiate and generally do not do so.

 

 

Collective agreements, by law, must be in writing and should be registered with the appropriate authorities – district in the case of company agreements, national in the case of industry agreements. There can only be one collective agreement for each bargaining group – in other words there cannot be competing agreements at industry level nor can there be separate agreements for different groups of employees in the same company.

 

 

As well as collective bargaining between employers and unions, there are also structures at national level, in which unions are represented. The 2011 Social Dialogue Act changed the composition of the economic and social council, the CES, which previously was a tripartite body including the unions, employers and government. It now includes representatives of civil society rather than government and it must be consulted on financial, economic, social and health legislation. The new tripartite body is the National Tripartite Council, for Social Dialogue, the CNTDS, whose role includes consulting about the minimum wage and negotiating possible social pacts.

 

 

The changes introduced through the 2011 Social Dialogue Act have severely affected collective bargaining. The previous national level of bargaining has been abolished and at industry level it has proved impossible to reach new agreements. As a result the number of employees covered by collective bargaining has fallen very sharply. In July 2012 in a joint statement the union confederations BNS and Cartel Alfa estimated that as a result of the changes collective bargaining coverage had fallen from 98% in May 2011 to around 36%.2

The government which introduced the Social Dialogue Act fell in May 2012 and the government which replaced it, winning elections in December 2012, has promised to amend the legislation. However, as yet (April 2013), this has not occurred.

 

Who negotiates and when?

 

 

The new Social Dialogue Code changed the rules setting out who is entitled to negotiate at company level. At industry level, the situation is unchanged and unions must represent at least 7% of the employees in the industry to be able to negotiate at this level. (Employers’ associations must represent 10%.)

 

 

At company level they must represent at least half plus one (previously one third) of the employees of the company. This means that in each company only one union can be representative.

 

 

Where there is no representative union, because the union present does not have enough members, company level negotiations can be undertaken by the union federation with members there, provided it itself is representative within that industry. If this is not the case, either because there is no union or the union federation is not representative, negotiations are undertaken by elected employee representatives. Similarly, in negotiations involving groups of companies, unions are entitled to negotiate provided they have a majority of employees in membership.

 

 

The legal minimum period that a collective agreement can last is 12 months and the legal maximum is two years, although this can be extended by a further 12 months by mutual agreement. Employers at company level should begin negotiations at least 45 days before the existing agreement expires and they should not last longer than 60 days, except where agreed. Negotiations typically take place at the end of one calendar year and the start of the next.

 

 

The subject of the negotiations

 

 

Rules setting out what a collective agreement should cover were abolished by the new Social Dialogue Act and it remains to be seen, how this will evolve in practice.

 

 

There is a national minimum wage set by the government following discussions with unions and employers in the National Tripartite Council, for Social Dialogue, the CNTDS.

L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.