Report in which the committee requests to be kept informed of development - Report No 323, November 2000

Case No 2089 (Romania) - Complaint date: 12-JUN-00 - Closed

Allegations: Adoption of an order suspending collective agreements in the public sector

1. 478. The complaint in the present case is contained in communications dated 12 and 15 June 2000 from the National Trade Union Confederation "Cartel Alfa". The National Federation of Electricity Trade Unions "Univers" also provided information on the case in a communication of 13 June 2000.
2. 479. The Government sent its reply in a communication dated 31 July 2000.
3. 480. Romania has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). It has not ratified the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainant's allegations

1. 481. In its communications of 12 and 15 June, the Confederation "Cartel Alfa" states that the Government adopted Acts Nos. 130 and 143 in 1996 and 1997 respectively. These Acts confer a binding character on collective labour agreements while improving protection of workers and employers against government discrimination and interference. Despite this, the Government in May 2000 enacted emergency Order No. 58/2000, sections 5 and 21 of which empower the Government to suspend collective agreements and unilaterally amend their contents, necessitating renegotiation of conditions of employment, in contravention of Convention No. 98.
2. 482. According to section 5(1) of Order No. 58/2000, the amount allocated for basic wages and salaries in the budgets for the year 2000 of certain state entities named in the appendices (autonomous bodies, national companies, commercial enterprises in which the State is the majority shareholder) may not exceed the average sum allocated for that budget item during the fourth quarter of 1999. Under section 5(2) of the Order, budget items corresponding to basic wages and salaries, supplementary payments, premiums and other wage-related entitlements must be indicated separately in the relevant budgets. Section 21 suspends any provisions in contracts of employment and any other provisions contrary to this interim Order (which is to remain in force until 31 December 2000).
3. 483. In its communication of 13 June 2000, the Trade Union Federation "Univers" states, for example, that in the electricity company whose workers it represents, application of the Order in practice means wage cuts of 25 per cent, the loss of all non-wage benefits, non-payment of overtime, etc.

B. The Government's reply

1. 484. In its communication of 31 July 2000, the Government explains that, despite the fact that overall economic targets for 1999 were achieved, some were not met. For example, the income policies of local authorities and state enterprises disregarded financial discipline; although wage targets were met during the first six months of the year, they were not met during the final two quarters, which were the basis of wages policy implemented in the autonomous bodies and national companies; and a number of bodies whose budgets are subject to government approval recorded arrears or deficit increases, both in nominal and real terms.
2. 485. The Government therefore concluded that, taking into account the deficits recorded at the end of 1999, it was necessary to implement a restrictive wage policy in these public sector bodies if it was to meet inflation and wage protection targets. These financial, economic and fiscal targets, which were set out in the Budget Act (No. 76/2000), were supposed to be implemented by Order No. 58/2000; the latter provided for a number of emergency measures which were to be applied in those companies that had recorded the biggest losses in 1999.
3. 486. Nevertheless, given that there were a number of obstacles to implementation of the Order, the Government considered it necessary to amend it. Following talks during the second half of June with representatives of the five national representative trade union confederations, including "Cartel Alfa", it was agreed that Order No. 58/2000 should be amended by emergency Order No. 117/2000, which was published on 4 July 2000 in the country's Official Gazette.
4. 487. Order No. 117/2000, which will remain in force until 31 December, contains provisions for the gradual reduction of arrears, deficits and debts, as well as annual cost-reduction and productivity targets. The programmes in question must set specific targets for the entire period covered by the Order. Budgets must respect existing legal constraints and reflect the realities of the market. These measures are especially necessary, given that a number of collective agreements were negotiated without regard to the employers' likely future resources.
5. 488. Section 21 of Order No. 58/2000 has been repealed and section 5 has been amended to read as follows:
6. 5. 1. The economic entities whose revenue and expenditure budgets are not approved (... until 31 December 2000) owing to their unrealistic nature or because they fail to comply with laws already in force shall be revised by the authorities in accordance with said laws.
7. 5. 2. In such cases as described in section 5. 1, a renegotiation process shall be initiated by the parties to the agreements currently in force.
8. 489. By negotiating with the trade unions, the Government has shown both its willingness to engage in dialogue with the social partners and its respect for trade union rights and the international labour Conventions which it has ratified. The complaint is therefore unfounded.

C. The Committee's conclusions

1. 490. The Committee notes that the present case concerns regulations introduced by decree in the context of budget restrictions which allow the suspension for a specified period of existing collective agreements in the public sector.
2. 491. While recalling that "suspension or derogation by decree - without the agreement of the parties - of collective agreements freely entered into by the parties violates the principle of free and voluntary collective bargaining established in Article 4 of Convention No. 98" (Digest of decisions and principles of the Committee on Freedom of Association, 4th edition, 1996, para. 876), the Committee also notes that the Government has held talks on this matter with the representative trade union organizations and that these talks have led to a consensus on amendments to the procedures for implementing emergency Order No. 58/2000. The Committee invites the Government and the complainant to keep it informed of any developments in this regard.

The Committee's recommendations

1. 492. In the light of the foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • Noting that the Government has held talks with the trade union organizations on procedures for implementing an emergency Order suspending collective agreements freely entered into in the public sector and has reached a consensus on amendments to the original text of that Order, the Committee invites the Government and the complainant to keep it informed of developments in this regard.