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Financial Participation

In Romania the various forms of workers’ financial participation are not widespread. The incidence of profit-sharing schemes is low by European comparison.

 

In the 15 years of transition since the end of the communist regime only some 40% of the total number of large enterprises and about two-thirds of the medium sized enterprises have been privatized. One third of all privatised companies were privatised using the MEBO method, with average employee financial participation of 65%.

 

 

Through the “Minority Interest Sales” method (selling minority shares to employees), introduced in 1999, some 12 to 18 thousand employees, especially in the banking system, purchased shares for about EUR 50-70 million, representing between 8% and 10% of the shares issued in these companies.

 

Cash-based profit-sharing must be applied in companies and autonomous bodies in which National Labour Collective Agreements are applicable, comprising 10% of companies net profit and 5% in the case of autonomous bodies. The net profit directly paid to employees at the end of 2003, as the average proportion of labour costs, was 2.2%, while 70.3% were distributed from salary funds, including premium and benefits.

 

According to the results of the fifth European Working Conditions Survey (EWCS, 2012), some 1.9% of all Romanian private-sector companies offer employee share ownership schemes and approx. 4.6% profit-sharing schemes.1

The findings of the “European Company Survey“ (ECS), a survey of more than 27,000 HR managers in Europe conducted in 2009, show that 7% of private-sector Romanian companies with 10 or more employees offer their employees a profit-sharing scheme. Compared with other European countries, this is a below-average figure (the 30-country European average is 14%). The prevalence of employee profit-sharing schemes in Romania rises slightly in line with company size. 6% of companies with 10-49 employees, 11% with 50-199 employees, and 16% of companies with more than 200 employees have a profit-sharing scheme. The ECS survey gives 11% as the percentage of Romanian private-sector companies offering their employees share ownership schemes, much higher than the European average of 5%.2 The PEPPER IV report states that 19.9% of Romanian companies with more than 200 employees offered share ownership schemes for large sections of their workforce in 2007. Wide-scale profit-sharing was offered by 42% of companies surveyed.3 According to the Annual Economic Survey of Employee Ownership in European Countries in 2012 20% of the largest companies offer broad-based participation (employee share ownership) schemes to the whole workforce. This is far below the European average (53.3%).4

The Romanian cooperative system has lost significance since 1989. In 2003 they had only a share of about 0.2% (17,000 members) of total employment.

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.