Perspective_politice_2014_decembrie.pdf Trade Unions � Government: A Relationship in Crisis. The Romanian Case of a Double Dismissal Abstract: The transition process pursued since 1989 by Eastern European countries also entails the transformation of the role of trade unions from an institution designed to maintain control over the work- force and to provide different social benefits towards an organization authorized to fight for labour rights, better working conditions and higher wages. The present study examines the path taken by Ro- manian trade unions, observing their successes and failures and tries to explain why the Romanian labour movement finds itself in a weak position nowadays. On one hand, this situation is explained by the actions of trade unions� leaders who placed their private interests above the interests of those they represent, and on the other hand, it is due to the government�s stance which promotes companies� needs at the expense of the workforce. Keywords: labour movement, post-communism, Romania, social dialogue, trade unions, transition. Since the fall of communism, Romania finds itself in a multi-layered process of transformation, usually referred to as �triple transition� (Kuzio 2001, p. 174). This concept suggests that the process entails three levels of transformation: from a centrally-planned economy to a market economy, from an authoritarian to a pluralistic political regime, and a process of institution building (stateness). Within this process, the role of trade unions is also changing from an institution designed to maintain control over the workforce and to provide different social benefits towards an organization authorized to fight for labour rights, better working condi- tions and higher wages. The present paper aims to explain the role of Romanian trade unions during the transi- tion period, looking, on one side, at the ac- tions of their leaders based on their private interests, and, on the other side, at the rejection of unionism from the Government perspective. The question to be answered is: how did the labour movement (in the form of trade unions) get dismissed and what are the facets of this dis- missal? The subsequent hypothesis entails two sides of the same story. On one side, most of the leaders or ex-leaders of trade unions are being investigated for corruption or misfeasance and there are many newspa- per articles talking about their substantial fortunes. On the other side, the privatization process and the Labour Law adopted in 2010 brought a weakening of the working class, which sees itself in the impossibili- ty of defending its interests (Ionascu 2012). The theoretical approach used in examining this issue grasps the importance of the com- munist legacy for the development of unionism during the transition period. This writing starts from the premise that the post-communist Romanian unionist movement does not reflect a clear-cut, linear strategy. This entails that the evolution of union logic has suffered many changes along the road, being neither completely controlled nor predictable. In fact, it is the result of a complex system of internal and external struggles under constant pres- sures. �It is a theoretical and empirical impossibility to generate a theory that applies to all sit- uations � [Although] theories of change can guide thinking and action � the reality of com- plexity tells us that each situation will have degrees of uniqueness in its history and makeup which will cause unpredictable differences to emerge.� (Bîrzea 2003, p. 74) The paper is divided into eight parts: introduction, the splitting of UGSR and the emergence of independent trade unions, the �golden age� of post-communist unionism, the loss of importance of trade unions, public sector trade unions as a last bastion of unionism, anti-trade union attitude on the side of government, the dismissal phenomena on the side of unionism and conclusion. It is hardly contested the fact that trade unions in the communist era were very different from their correspondents in the Western democracies. Their main activities were concentrat- ed around �maintaining stability in the plant by keeping employees content� (Ost 2007, p. 306), acting as a �transmission belt� through offerings of social benefits (housing, schooling, holiday tickets or health treatment) or through organizing different social inclusion activities (fairs, meetings, proms and extra-professional actions) (Kideckel 2001, p. 100). In communist Romania, the main voice of labour movement was UGSR (General Union of Romanian Trade Unions, literally Uniunea Generalã a Sindicatelor din România) which counted approximately 7.5 million members and was abolished on the 25th of December 1989. It had been replaced by the �Provisional Committee for the Formation of Free Trade Unions in Romania� (later the National Confederation of Free Trade Unions of Romania, CNSLR) which inherited its assets illegally (as shown by an investigation of National Anticorruption Direction in 2012). CNSLR was led by the young activist Victor Ciorbea, later named as prime minister (in 1996). Ciorbea was named union leader instead of Bogdan Hossu who left CNSLR and founded Cartel Alfa, nowadays one of the five influent trade union federations. Simultaneously, another independent union appears under the name of Frãþia (Fraternity), led by Miron Mitrea, representing the interests of drivers. These three names are very important for the appearance of independent unionism in post-communist Romania and are still influen- tial nowadays. (Enache 2012) Firstly, CNSLR inherited, as it was mentioned, illegally, through a fake signature, the as- sets and the fortunes of UGSR and the new formed Frãþia organized a demonstration against this action, though it later became just a demand that the funds obtained illegally should be used for unemployment benefits. Surprisingly, in 1993 the two merged to form CNSLR-Frãþia. It is worth mentioning the fortune of the old UGSR in order to imagine what was at stake: ap- proximately $300 million, 51 culture centers, 19 clubs, 17 treatment houses, more than 400 apartments, 34 offices, hotels and protocol villas, 344 sports complexes and 8 annexes. (Enache, Pastia 2007) 32 Perspective politice The Romanian sociologist Vladimir Pasti described in his book �Romania in transition. The fall into the future� the way the workforce was organized at the beginning of the post- communist times. Two thirds of the workforce was working in the public sector, in factories with over 2000 employees (ICTUR 2005, p. 280). The rate of unionization was around 80% concentrated in mining, heavy industry, oil, gas and chemicals (Pasti 1995, p. 178). The 1991 Law on Trade Unions was provisioning that a confederation could be formed by at least 60 workers and this led to a fragmentation of the labour movement. However, at the national level, only 5 confed- erations are recognized by the Economic and Social Council and take part at the tripartite ne- gotiations between trade unions, employer unions and government because one of the criteria for representativeness is to summon at least 5% of all the employees at the national level. The power of union leaders derived from the easiness to get access to members who were concentrated in the public sector and to set out collective bargaining in strategic sectors: trans- port, extractive industries, energy etc. On one side, these leaders were acting against the indus- trial technocracy within the firms with direct control over the resources and, on the other side, they were trained in carrying harsh battles for union leadership, able to control workers mass- es and not scared of long struggles carried out by different means (Pasti 1995, p. 178). In these times of massive protests, the legitimacy of firm management and central political power were derived from the support of the workers. These enabled union leaders to hold enough authority in order to ask for wage raises and the short-term governments that succeed- ed during the early 1990s had an interest in keeping the workers content. However, the cession in wages was counteracted by fiscal and economic policies that brought a high degree of in- flation. �Real incomes fell 40% from 1989 to 1993�. (ICTUR 2005, p. 281) This is remembered as a �golden age� of unionism, when high demands on the side of trade unions were fulfilled. Firstly, the working class demanded to be compensated for the last years of harsh dictatorship of Ceausescu and secondly, union leaders realized that the only way to maintain their position and the support of workers was to obtain as much as possible from both sides: the right to interfere in the management of the companies and/or raising the minimum wages through persuading the government. (Pasti 1995, p. 178) However, the main misuse of power by the union leaders refers to their inability to see the larger picture. Even since the communist times, the main discontent of the working class was not against communism as an ideology that allowed workers to exercise the power in gover- nance. It referred to the fact that the elite (nomenclaturã) was absorbing the gains obtained through massive industrialization that entailed the disappearance of traditional villages, hard, long working days in big halls, cold houses and empty shops. This austerity was legitimized by the external debt that had to be paid, but after this process ended, people realized that the main problem was that they were not in control of power. In the first years after the revolution, trade unions representing workers were in a powerful position, but they did not know how to main- tain this position or even climb the ladder. For example, in the negotiation processes with the government there were usually two types of demands: higher wages for the workers and access to political decisions for union leaders. The government allowed higher wages to keep the workers content, but usually kept the unionists out of the ministries or government agencies. As it can be seen, some of the most important benefits for the labour movement were ob- tained in those days: the forty hours working week, indexed wages, union and factory democ- racy and better working conditions (Kideckel 2001, pp. 102-103). decembrie 2014 33Perspective politice It is worth here to have a deeper look at the background and formation of the most influ- ential union confederations in order to grasp the significance of the legacy for the next era. As mentioned before, CNSLR led by Victor Ciorbea (former judge, public prosecutor, mayor of Bucharest, supporter of right-of-center Peasant Party) was representing workers from different sectors: chemistry, oil industry, telecommunications, wood industry and state-power companies. It kept close, cooperative ties with the first government after the revolution, NSF (National Salvation Front � mostly formed of ex-communist officials). This enabled the cre- ation of Frãþia, a union representing various machine and transportation assembly workers, truck and taxi drivers, aiming both at seizing a part of the UGSR holdings and constituting a counter-opposition to the close relationship between CNSLR and the NSF. The concessions in terms of wage raises, coupled with the maintenance of un-productive, resource wasteful capac- ities led to high inflation, unemployment and economic stagnation. Labour was confronted with issues such as job security and salaries, but their leaders sought to influence higher goals, e.g. the economic policy and the organization of the national government. Thus, workers in metallurgy, steel, electronics, coal mining and petrochemicals fell ill-served by their represen- tatives and formed another union, Cartel Alfa. Soon, another union representing subway work- ers and teamsters was created under the name of National Trade Union Bloc (BNS). (Kideck- el 2001, pp. 102-103) The constant pressure towards the government coming from the labour force made politi- cians (Ion Iliescu � leader of NSF, but also the Democratic Convention � main opposition coalition) to seek the support of the workers. Thus, Ion Iliescu (president) called Jiu Valley miners to invade Bucharest to break down the government of Petre Roman and the Democra- tic Convention actively approached Victor Ciorbea. This produced unrest on the side of work- ers, disunity in the unions and loss of credibility in front of the Romanian population. Still, the political spills led to the unification of CNSLR and Frãþia in 1993, with Ciorbea (close to the opposition party � CDR) as president and Miron Mitrea (allied with the new formed PDSR of president Ion Iliescu) as vice-president. But soon after, the internal dispute led to the defeat of Ciorbea (supported only by four hundred thousand members out of 2.2 millions) who created the Democratic Trade Union Confederation of Romania (CSDR). Table 1. Major Romanian Labor Confederation. Source: Compiled by author, Kideckel 2001, p. 105. Note: Along with the four confederations included in this table, a fifth confederation, Meridian, has also received formal recognition as a signatory to the 1999 Collective National Labor Contract. However, given that it represents only about four thousand workers and is thus smaller than some local enterprise unions, its recognition is considered a legal fluke by the union officials with whom I spoke. 34 Perspective politice This political race, the burdensome legislation, the different ownership principles and pro- duction profiles, fiscal matters and access to members were some of the most important obsta- cles for the labour movement. The 1991 Law on Trade Unions enabled union competition until the degree that �workers in the same industries, and sometimes the same factories, are represented by several different unions, each of which is affiliated with a different federation�. (Larry Bush in Kideckel 2001, p. 104) CNSLR � Frãþia was supporting state-controlled autonomous companies (utilities and petroleum), CSDR was concentrated in education and health care, Cartel Alfa was mainly rep- resenting the interests of privatized state firms, in heavy industry and mining, and BNS was also based in privatized state firms, in manufacturing and assembly sectors (automobiles and shipbuilding). Thus, the last two groups were in favor of �more rapid and thorough privatiza- tion, industrial restructuring and legal reform�. (Kideckel 2001, p. 104) The inheritance of UGSR assets also created inter- and intra-union disputes, disagreements and tension through the monopoly over culture halls, special shops for workers or special re- lations with commercial outlets that often enlarged the pockets of the unions and their leaders. (Kideckel 2001, p. 105) Even more important for the union budgets were the 1% of the wage contributions of the members. Some of the unions were unable to gather these fees and transpose them into support for nationwide activities, such as financing informing campaigns or offering material benefits. Following the communist legacy of a bureaucratic elite departing from the working class, a discrepancy between common union members and the structure of leadership can be ob- served. The latter generally adopted an open-doors strategy, easily moving from one ideolog- ical position to another, adopting the speeches of those politicians they were closer to or of- fered them more personal advantages. (Pasti 1995, pp. 187-188) Kideckel (2001, pp. 106-113) identifies a series of factors that reduced the significance of trade unions throughout the early 1990s: the increase in unemployment, enterprise restructur- ing and outright failure, unprecedented expansion of black-market labour, rapidly declining living standards, employer and government disrespect for labour laws and the growth of the non-unionized workforce. Unemployment started-off through programs of enterprise restruc- turing, privatization or �tick firms� designed to extract resources to third-party firms (owned by relatives / clients of state company managers or politicians). Furthermore, it enabled an intra-workforce negative attitude towards the unemployed on behalf of active workers because of large dismissal packages and the expectancy of quick enrichment under the unrealistic vi- sion of the easiness for finding soon a new job. This created even more tensions within the workplace and at home because of demographic reasons. The discrepancy between men on one side and women and youth on the other created a lack of representativeness for unions, en- riched by a large group of non-working workforce that lost its right to union representation once it lost its job. Failed reforms and the accumulated pressure on the workforce finally culminated at the end of the 1990s through massive street protests after three years of declining GDP (1997-1999) and falling standards of living. �In May 1997 unions staged a «month of the yellow card», de- decembrie 2014 35Perspective politice manding cuts in the price of food and energy and the abandonment of plans to close down or privatize state companies�. (ICTUR 2005, p. 281) January 1999 was the last episode of violent unionism when the coal miners of Jiu Valley tried to March towards Bucharest in order to oppose the closing of mines and clashed with the repressive forces when a ban was enacted on the strike. The tension did not spread out, so in March 1999 400.000 workers from education, health care, police and other sectors threatened by massive lay-offs (the last sectors confronted with the privatization reform) protested on the streets of Bucharest reunited by four union confed- erations (Cartel Alfa, CSDR, CNSLR-Frãþia and BNS) demanding lower taxes, inflation- linked wage increases, and cuts in energy prices. (ICTUR 2005, p. 282) The joint action led to a complex agenda that encompasses: adopting a legislation that de- fines the responsibilities of public officials and controls their behaviour; creating a legislative body to recommend reorganization of labour relations including the creation of a labour tri- bunal; modifying the law on collective labour conflicts and the planned legislation on public pensions; allowing salary indexation; food subsidies for disadvantaged groups; liberalizing collective bargaining; increasing funds for education, research, culture; limiting the functions of the State Privatization Fund (FPS) in the privatization process, publishing a list with all its members, and devising the rapid privatization and termination of the FPS; modifying state fis- cal policy; decreasing prices and revising the system of taxation for electrical and thermal en- ergy, gas, transportation, water, gasoline and telecommunication; elaborating and implement- ing a national development strategy encompassing all social partners (workers, unemployed, pensioners and employers); restructuring of debt for a five-year period to unlock the financial blockage, with a grace period of 6-12 months. (Kideckel 2001, p. 112) The comprehensiveness of such an agenda represented both an unique position in the his- tory of strikes and an obstacle towards its implementation. Most of the measures proposed left the domain of work related issues on a firm-level and entered the field of macro-economic pol- icy. This enabled different positions within the joint action, considering the political and ideo- logical attachments of the different constituents. CNSLR-Frãþia and CSDR were closer to so- cial democracy, supporting go-slow reforms and opposing the privatization proposed by IMF and the World Bank, while Cartel Alfa (more attached to the Christian-Democratic political spectrum) pushed for rapid privatization, legal reform and embraced the recommendations of international institutions. (Kideckel 2001, p. 113) The 2000s are seen as years of economic prosperity, under the effect of different factors: the adherence to NATO in 2004 and the accession in the European Union in 2007 are the main drivers of such an economic growth. The restructuring of industrial sectors represented a loss of members in the union movement until the degree that mostly workers in state service sec- tors (health care, education and repressive forces) were seen as active unionists. �Between 2002 and 2008 the Romanian economy grew strongly, with above-potential real GDP growth rates averaging 6.3%. Economic growth was primarily driven by domestic de- mand, as strong credit and wage growth boosted private consumption and investment (Euro- pean Commission, 2011). However, labour market participation did not reflect the favorable 36 Perspective politice economic conditions, the employment rate remaining practically at the same level for the whole period and being one of the lowest in the EU: 59% in 2008 as against 65.8% in the EU average.� (Vasilescu 2012, p. 4) This is partly explained by the migration of workforce to West-European countries like Spain, Italy, UK etc. for higher salaries and better working con- ditions on the basis that labour has been stepped aside. Generally, people realized that the in- dividual solution is easier to reach than to try to achieve solidarity and a common interest. The financial crisis hit very hard the workers in state sectors through massive lay-offs and some of the highest austerity measures in the European Union drawn by loan agreements with the IMF, World Bank and the European Commission: 70.000 jobs lost, 25% cuts in state salaries, complete cuts in wage increases and allowances, 15% cuts in pensions, 15% cuts in unemployment and child care allowance, VAT increase from 19% to 24% and other specific measures. (Pele 2012, Pietras 2009) Furthermore, the 2011 Social Dialogue Law passed through a Government Emergency Or- dinance replaced the Trade Unions Law, Employer Law, the legislation regarding collective contracts, working conflicts and the rules of functioning for the Economic and Social Council (the Romanian tripartite arrangement). It shows a clear right-wing, neo-liberal orientation as mentioned by the former PM, Emil Boc. By comparison with the previous laws it restricts trade union activities and creates a fa- vorable background for big employers. Some of the most important modifications are: trade unions lose their right to free headquarters; workers from small companies in the same sector cannot ally with workers from another company; the provision that trade union leaders were protected against dismissal for two years after they lose their office disappeared; the necessi- ty of co-opting union leaders in administration councils of the firms disappeared; the employ- er is no longer obliged to report the spending regarding improving working conditions, social utilities, work safety and insurances; unionists employed as workers need to negotiate with the employer the number of days spent for union activities and they are not paid for these days anymore; the court obligation of patrimony assignment to another union when a union disap- pears was abolished; the professional and territorial criteria of unionization are replaced by the �activity sectors� criteria determined by common law; is introduced the necessity of sub- sidiaries in 50% + 1 of Romanian counties plus 5% quota of Romanian workforce; for every unit, collective bargaining can occur for 50% + 1 of employees compared with the previous 30% ratio; the national collective working contract was replaced by a sector collective work- ing contract which means that every sector negotiates individually for the minimum wage; dur- ing the validity period of a collective working contract the employees cannot raise a collective working conflict; the necessity of having a warning strike before organizing a strike; losing all rights from the individual working contract in the eventuality of a strike, except the health in- surance rights; in disagreement with the ILO 87 Convention, the right to strike for personnel employed by foreign military is abolished. (Domnisoru 2011) The labour dismissal phenomena within trade unions took the form of three currents cou- pled simultaneously: a) the absence of trade unions in private companies (Dumitru 2010, p. 1), b) state sector trade unions abandoning the struggle and c) the usage of unionism by leaders as a political launching pad and a means of enrichment. decembrie 2014 37Perspective politice The first issue started in the 1997-2000 period of massive privatization. Big industrial parks were privatized and split into smaller firms, usually sold to foreign investors or Romanian magnates. This increased the division of labour force and unions needed to be formed at the company or sectoral level. Ghebrea clarifies this: �collective agreements concluded at the sec- toral level establish the minimum set of terms and conditions, which are often similar to those concluded at the national level. Company unions are left to bargain specific employment con- ditions at the enterprise level (Trif 2004, p. 56). Approximately 50% of all companies are in- volved in collective bargaining (Ghebrea 2005, p. 172). Collective agreements cover about 3.4 million employees, that is, 74% of Romanian employees and 40% of the total labour force. Collective agreements are often absent in private enterprises, especially in small to medium- sized enterprises� (Ghebrea 2007, p. 383). The second facet suggests that the period that followed the 2000 elections represents a pe- riod of relative labour peace obtained through social dialogue, in the form of a tripartite social pact signed by government, union confederations and employer representatives. It might look as the field smoothed, but in fact: �the massive infusion of trade union leaders in administra- tion, politics and civil society, and the signing of the first social Accord between the employ- ers� organizations, the Government and the trade unions were the major social events of the 2001�. (Bush 2004, p. 435) Actually, the re-elected (after 4 years) PSD realized that co-opting union leaders might help them more than rewarding the traditional wage increase demands. The third aspect refers to the way the second issue was possible. After more than 20 years of transition and numerous observations coming from international institutions, press investi- gations and civil society members, corruption deeds started to be punished by the judicial sys- tem. Recently, in February 2013, Marius Petcu (ex-leader of CNSLR-Frãþia and health-union federation SANITAS) has been sentenced to 7 years of jail for corruption. It is a premiere con- sidering the definitive character of the decision, but the circle does not close here. In 2011, Na- tional Integrity Agency (ANI) started to investigate the fortunes of 13 union leaders: Bogdan Hossu (President Cartel Alfa), Vasile Marica (President �Sed Lex�), Dumitru Costin (President BNS), Liviu Luca (Petrom union leader), Anton Hadãr (President Alma Mater Federation), Vasile Lincu (President of police and customs officers trade union �Pro Lex�), Sorin Dumi- traºcu (The Federation of National Penitentiary Administration Trade Unions), Marin Gruia (President SNPPC � police trade union), Marius Nistor (Executive President of �Spiru Haret� Federation � education), Gheorghe Isvoranu (leader of �Spiru Haret� Federation), Ion Albu (Executive President Meridian), Ion Popescu (President Meridian), and Marius Petcu (leader CNSLR-Frãþia). They are all investigated for inconsistencies regarding the declared income and their fortunes. (Fotache 2011) The list is not exhaustive and the ties between union lead- ers, the political spectrum and tycoons are very complex. It is a moving ground, with intricate relations and even when the facts are quite clear it is hard to prove them in court. The present research tried to offer a comprehensive grasp of the Romanian unionist move- ment after the fall of socialism and to explain how the actual state of union dismissal has been reached. It offered a two-faced answer: on one side, the interest of governing politicians was to weaken the labour movement, and on the other side, the personal interests of union leaders had priority in comparison with the interests of the workforce. 38 Perspective politice Romania is missing strong union leaders, schooling and sound principles that might revi- talize the union movement. 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