STUDY Romania’s Trade Unions at the Crossroads Challenged by Legislative Reforms, Economic Crises and a Power-loss of 60 per cent VICTORIA STOICIU November 2016 n The 2011 labour law reform considerably diminished employees’ freedom of association and restricted the right to form unions to an extent that the ILO has criticized as non-compliant with its standards. n Through legal reforms, the collective agreement coverage rate dropped by twothirds to only 35 per cent. The enterprise level is now the main level of collective bargaining, in effect crowding out representative trade union organisations. n The abolition of national collective bargaining in 2011 has effectively deprived union federations of their most important instrument of action, while new tripartite mechanisms for minimum-wage determination have so far been unable to fill the gap. n Chronic strategic shortcomings and a legitimacy crisis had contributed to the trade unions’ inability to influence labour legislation reforms in 2011. The impact of economic recession was less severe for trade union membership than the economic transition period that preceded it. n While changes to the 2011 reform package appear to be critical, that would not solve the trade unions’ structural problems, which need to be addressed from within.

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS Contents 1. Trade union landscape: Five major confederations unable(as yet) to cope with decentralized bargaining 2. Trade union rights and working conditions under the new Social Dialogue Act of 3. Trade unions core tasks: a bit stuck between decentralization of collective bargaining and ill-functioning tripartite 4. Trade Unions‘ Power Resources as a legacy of previous tripartite structures and failure of 5. Conclusions and perspectives: a possible re-discovery of more»traditional« Appendix 12 References 14

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS 1. Trade union landscape: Five major confederations unable(as yet) to cope with decentralized bargaining structures Both before and since 2008, the trade union landscape in Romania has been characterized by fragmentation. Trade union fragmentation is common in central and eastern Europe, but in Romania the legal framework As in many central and eastern European countries, the most noticeable characteristic of the Romanian trade contributed to the development of a fragmented trade union movement. 4 There are five representative natio unions is their constant decline in membership after nal trade union confederations, without any significant 1989. Trade union density in Romania fell from 90 per difference among them in terms of doctrine, affiliated cent at the beginning of the 1990s to around 35 per cent in 2006. 1 The ICTWSS database puts union densectors or composition: the National Trade Union Bloc (Blocul National Sindical, BNS, created in 1991), CNS sity in Romania at 32.8 per cent in 2008, calculated as Cartel Alfa(created in 1990), CNSLR Brotherhood(CNSnet union membership as a proportion of paid workers, LR Fratia, created in 1993), CNS Meridian(created in recording a slow decline compared with 2007(33.7 per cent density). 2 A reliable but incomplete national source 1994) and the National Democratic Trade Unions Confederation(Confederatia Sindicatelor Democrate din Roare the documents provided by the Ministry of Labour’s mania, CSDR, created in 1994). Despite a radical legislawebsite that includes the official documents submitted tive reform of social dialogue, which abolished national by each confederation for obtaining the representativencollective bargaining and deprived the confederations of ess. According to this source, the five national represen their main role in 2011, the structure of the umbrella ortative confederations have about 1,400,000 members ganizations remain largely unchanged, in spite of several out of approximatively 4,500,000 employees, which discussions about possible mergers. corresponds to a trade union density of approximately 30 per cent. The union landscape changed significantly at the sec toral level, both as an effect of economic restructuring, The abovementioned data bring us to the conclusion but also, more recently, due to the 2011 reform of socithat the sharpest decline in union membership happeal dialogue legislation, which redesigned the economic ned before the 2008 economic crisis. The impact of the recession was less severe for union memberPowers left to conclude sectoral collective agreements in two sectors only. sectors. In 2002, trade union density in industry was over 75 per cent, ship than the economic transition period that preceded while in the food industry it was around 50 per cent. The it. The large scale deindustrialization from the 1990s onwards, the structural mutations of the transition from highest union density was in the metal industry(83 per cent). 5 In fact, the highest union membership is in the a state planned economy to a market economy and a public sector, especially in health care and medical assispermanent legitimacy crisis of the unions had a much tance(Sanitas Federation, with 105,000 members) and more virulent effect on Romanian trade union membereducation( Federatia Sindicatelor din Invatamanat Spiru ship than the economic crisis, which deepened existing Haret – the»Spiru Haret« Education Unions Federation weaknesses. However, despite the constant decline, bewith 66,000 members and Federatia Sindictelor Libere fore the economic crisis the Romanian trade unions were din Invatamant – the National Federation of Free Unions still among the strongest in central and eastern Europe in Education with 179,000 members), which are also the in terms of union density and influence over labour le gislation. 3 only two sectors that concluded sectoral collective agreements after 2011. In 2014, representative trade union federations existed in 21 economic sectors(out of 29 1. Trif, A.(2015),»Social dialogue during the economic crisis: the survival of collective bargaining in the manufacturing sector in Romania«, Friedrich-Ebert-Stiftung Romania, available at: http://library.fes.de/pdf-files/ bueros/bukarest/12419.pdf 2. Database on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts, compiled by the Amsterdam Institute for Advanced Labour Studies AIAS of University of Amsterdam. economic sectors in total). The eight economic sectors without representative trade unions are the textile industry, wood processing, postal services, commerce, industrial and civil constructions, tourism, assistance and 3. Carley M./ Weilerand A./ Newell H.(2007),»Industrial relations developments in Europe 2006«, Luxembourg, Office for Official Publica tions of the European Communities. Available at: http://www.eurofound .europa.eu/publications/htmlfiles/ef0734.htm. 4. Trif, A.(2015). 5. Preda, D.(2006), Patronate i sindicate în România. Coordonate la nivel de ramur ă . Bucuresti: Friedrich-Ebert-Stiftung. 3

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS Table 1: Romanian representative trade union confederations 2003* 2008** 2011*** 2015**** BNS 375 000 375 000 150 000 253 227 CNSLR Fratia 800 000 800 000 520 000 306 486 Cartel Alfa 345 000 400 000 1 050 000 259 443 CSDR 345 000 345 000 101 000 249 264 Sources:* and** Eurofound(2009),*** ITUC(2014),**** Romanian Ministry of Labor Meridian 170 000 170 000 170 000 264,811 Total 2 015 000 2 090 000 1 941 000 1 333 231 consulting services, sport activities and gambling. About at the company level from 30 to 50+1 per cent of the 730,000 employees work in the commerce sector and company’s employees. The expected outcome of this about 170,000 in the textile industry, together accoun- transformation was the creation of stronger sectoral and ting for almost a quarter of total employees; the two company unions and union mergers that would put an sectors have among the lowest average wages. 6 end to the fragmentation at both sectoral and company level. Contrary to expectations, this did not occur: In 2011, the social dialogue legislation reform triggered despite a few isolated mergers, the overall number of a new dynamic between the umbrella organizations, on union organizations increased after 2011: from 8,598 in one hand, and sectoral unions and company unions, on 2010 to 8,682 in 2011, 9,329 in 2012 and 9,915 in 2013. 7 the other hand. Before the legislative reform, social diThe result was a decentralized social dialogue, coexisting alogue in Romania was highly centralized, despite the with high fragmentation and characterized by a powunion fragmentation. Collective tripartite bargaining er shift from umbrella organizations to the sectoral and was hold at national level and the provisions of the collcompany unions. But the power did not translate into ective national agreement were automatically extended to all employees and were compulsory for secThe reforms have made it considerably more difficult for trade unions and employers’ organizations to operate effectively(ILO). stronger unions or higher collective bargaining coverage at company level, rather the opposite – it weakened the unitoral and company level bargaining. Moreover, the unions and their bargaining power. 8 According to an ILO on federations that did not meet the threshold criteria study on the impact of the new legislation, the reforms for representativeness(7 per cent of the total sector’s have made it considerably more difficult for trade unions employees) could become representative by getting afand employers’ organizations to operate effectively. 9 filiated to a representative confederation. Therefore, the national union confederations played a key role in social dialogue and industrial relations; but the negative side of this situation was an increasing gap between the natio2. Trade union rights and working conditions under the new Social Dialogue Act of 2011 nal level and their members, as well as a gap in expertise and financial resources, with the expertise concentrated In Romania, the right to form a union and become affili at national level and financial resources at company le ated to a union organization is guaranteed by law. Howvel, where the membership fees were collected. ever, the Social Dialogue Act(62/2011) stipulates that a union organization can be founded by a minimum 15 The Social Dialogue Law(62/2011) abolished collective employees working in the same establishment, which bargaining at national level and removed the possibility for unions to obtain representativeness by becoming affiliated to a representative federation/confede ration, while raising the representativeness threshold 6. Draft Strategy for Social Dialogue, available at http://www.mmuncii. ro/j33/images/Documente/Proiecte_in_dezbatere/2015/2015-nov_Strategie_dialog_social.pdf 7.»Annuarul Statistic al Romaniei 2013«, National Institute of Statistics. 8. Chivu, L./ Ciutacu., C./ Dimitriu, R./ Ţ iclea, T.(2013): The impact of legislative reforms on industrial relations in Romania, International Labour Office, Industrial and Employment Relations Department(DIA LOGUE), Decent Work Technical Support Team and Country Office for Central and Eastern Europe. Budapest: ILO. 9. Idem. 4

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS Table 2: Situation of representative trade unions and employers organizations at sectorial level Agriculture Extractive industry Energy, oil, gas and mining Food, beverage and tobacco industry Textile and leather Wood processing Chemical and petrochemical industry Sticla si ceramic Metallurgy Automotive and metal manufacturing Electric and electronic equipments Furniture Communal services and public utilities Industrial and civic constructions Commerce Transportations Maritime transportation and air transportation Tourism, hotels and restaurants Culture and mass media Telecommunications and technology of information Financial activities, banking and insurances Consultancy, support and other services Tertiary education and research * Health care, sanitary and veterinary activities * Social assistance * Sport, gambling and other activities * Public administration * Postal services * Pre-university education * The table shows which economic sectors have representative trade union federations( n ), representative employer’s organizations( n ), or no representative union nor employer’s organizations( n ). If the social partner is represented by the Government and not by employers’ organisations the sector is marked with(*) Source: Romanian Ministry of Justice. severely limits workers’ rights in companies with fewer asingly difficult to establish whether or not an employ than 15 employees, which affects about 1.2 million employees in total. 10 Before 2011, the law provided for the ment relationship exists between the parties based on the sole criterion that the work is performed under the possibility of setting up a»professional union«, formed authority of an employer. The ILO states that the provisiby a minimum of 15 employees working in the same on requiring a minimum of workers from the same enterbranch, but in different establishments. In its technical prise to establish a union is not in itself incompatible memorandum from January 2011, the International Labour Office(ILO) criticized the new law’s provisions for non-compliance with the core internaIn effect, less than one per cent of companies are larger than the legal threshold for trade union organization. with Convention No. 87, but the Committee on Freedom of Association stated that the number tional labour standards. 11 The ILO also pointed out that should be fixed in reasonable manner and should take the Social Dialogue Act’s definition of a worker as an into account the proportion of small enterprises in the individual who is a party to an individual labour contract country. According to some recent data from Romania, and performs work for and under the authority of a prithe proportion of companies with fewer than ten emvate employer could not capture the variety of emerging ployees out of the total number of companies from inpatterns of work organization and it is going to be incredustry, construction, commerce and market services was 10. Idem. 87.2 per cent in 2003, 89.2 per cent in 2008 and 99.1 per cent in 2010. 12 11. International Labour Office(2011): Memorandum on technical com ments on the draft labour code and the draft law on social dialogue of Romania, January 2011. Available at: http://www.csnmeridian.ro/files/ docs/Technical%20Memorandum%20Romania%20on%20Draft%20 Labour%20 Code%20and%20Draft%20Law%20on%20Social%20.pdf 12. Chivu, L./ Ciutacu, C./ Dimitriu, R./ Ţ iclea, T.(2013), The impact of legislative reforms on industrial relations in Romania, International Labour Office, Industrial and Employment Relations Department(DIA LOGUE), Decent Work Technical Support Team and Country Office for 5

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS The legislative reform introduced in 2011 considerably for two weeks on the ground that»their involvement diminished the legal protection of union leaders. Prior in the trade union makes them a safety hazard during to 2011 union leaders could not be dismissed on pro- flights«. The pressure imposed by the company increa fessional grounds during their mandate and two years sed and many workers were afraid of losing their jobs. after the mandate ceased. The legislative reform(Art. The management even contacted people on their days 60 para.(1) g) of Law No. 53/2003 – Labour Code) dioff to inquire about their position vis-á-vis the union. In minished the special protection that the trade unions November 2014 another 19 union members were dispreviously enjoyed at the workplace and provided that missed. In March 2015, a court ruled that Mircea Consunion leaders cannot be dismissed on professional tantin, president of SAP, had been unlawfully dismissed grounds only during their mandate, leaving them witand ordered the company to reinstate him and in July hout protection immediately after their mandate ends 2016 the court ordered the reinstatement of the cabin . Four years later, in November 2015 the Romanian crew members dismissed by Wizz Air. Despite the court Constitutional Court(CCR) ruled as unconstitutional the rulings, the company did not enforce the decisions: article providing that a person who occupies a leading the union’s president and vice-president have been leposition in a trade union may not be dismissed by the gally reinstated, but the company continues to prohibit employer, except for serious or repeated disciplinary viotheir access to the workplace(no access card, no email lations. The Constitutional Court states that the protecaddress and so on). tion of persons elected to trade union leaderships must operate exclusively in relation to trade union activity The right to strike is also guaranteed in Romanian law, actually performed and not in terms of work. The CCR but several provisions obstruct it. In Romania, a strike also states that union employees are in the same legal position as other employees in terms of the Several obstructions to the right to strike prove to be very effective. cannot be conducted while a collective agreement is in force. A strike can be started only after legal provisions of the Labour Code. Trade unions criexpiry and during collective bargaining, but only if the ticized the decision, claiming that 99 per cent of the employer refuses to start collective bargaining, the emunion leaders in Romania perform their union activities ployer does not accept the demands formulated by the while continuing to be employed and the Constitutional employees during collective bargaining or the employer Court decision will diminish their power in negotiations and employees do not reach an agreement within the with their employers, who will be free to dismiss them if legal term established for the finalization of collective they become too vocal. bargaining. This provision restricts the employees’ right to strike as long as the collective agreement is valid, even The legal framework protects union members and uniif the employer breaks or does not respect its provisions. on leaders against discrimination or other abuses at the The provision also violates the right to strike of all those workplace. In practice, however, the legal provisions are employees working in establishments with fewer than not always applied. Several cases of employees that have 21 employees, where collective bargaining is not manbeen dismissed as a result of their trade union memdatory by law and where, consequently, no strike can be bership have been reported and union leaders accuse held. Because the exercise of the right to strike is strictly multinational companies of anti-union practices. 13 One dependent on collective bargaining, any restraint of the of the most prominent cases is that of Aerolimit Profespossibility to bargain is equivalent to a restraint of the sional Union, the trade union of Wizz Air. At the end liberty to strike itself. Another excessive provision proviof 2014, shortly after Wizz Air had been notified of the des that only representative trade unions(50%+1 of the establishment of the Aerolimit Professional Union, its company’s employees) can hold a strike. In those units leader, Mircea Constantin, was dismissed. The vice-prewhere there are no representative unions, the elected sident and secretary of the trade union were suspended representative of the employees can start a strike with the written approval of at least 25 per cent of the emploCentral and Eastern Europe. Budapest: ILO. yees. The ambiguity of the law’s provisions leaves room 13. Ernu, V.(2014),»Este o realitate, majoritatea companiilor multina ţ ionale sunt anti-sindicale(…) In compania Auchan nu exist ă sindicat«, interview with Vasile Gogescu, published on 23 June 2014 on www. criticatac.ro. for many different interpretations that can easily result in a strike being declared illegal. Although currently Romania has the tensest industrial relations among the EU 6

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS countries(ranking 26 th , according to World Economic Forum data) the National Institute for Statistics reports no strikes between 2010 and 2014. 14 3. Trade unions core tasks: stuck between decentralization of collective bargaining and ill-functioning tripartite forums Before 2011, collective bargaining was allowed at all levels, national, sectoral and company. The national and sectoral trade unions had the strongest bargaining capacity, while the company level often lacked the know-how and human resources needed in the bargaining process. These circumstances, combined with the legal provision regarding the favourability clause, led to a situation in which the national and branch collective agreements were decisive for wage negotiations at the company level. Collective agreement coverage before 2011 was estimated at 98 per cent 15 or even 100 per cent. 16 Table 3: Number of collective agreements at sectorial/branch level in Romania, 2005–2015 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Collective agreements at branch level / sectorial level 11 8 9 9 2 8 0 2 1 1 0 Source of data: Romanian Ministry of Labour 14. Draft Strategy for Social Dialogue, available at: http://www.mmuncii. ro/j33/images/Documente/Proiecte_in_dezbatere/2015/2015-nov_Strategie_dialog_social.pdf 15. European Commission(2015). Industrial Relations in Europe 2014. Luxemburg: Publications Office of the European Union. 16. Chivu, L./ Ciutacu, C./ Dimitriu, R./ Ţ iclea, T.(2013): The impact of legislative reforms on industrial relations in Romania, International Labour Office, Industrial and Employment Relations Department(DIA LOGUE), Decent Work Technical Support Team and Country Office for Central and Eastern Europe. Budapest: ILO. After the 2011 reform of social dialogue legislation, national collective bargaining was abolished in an attempt to decentralize social dialogue. Currently the main level for setting wages is bargaining at company level. Sectoral collective bargaining is legally allowed for representative employers’ organizations and representative trade unions, but the high representativeness criteria, together with the conditions for extending the agreements at sectoral level imposed by law make sectoral collective bargaining Crowding out of representative trade unions from company-level collective bargaining. very difficult. According to the law, a trade union or em ployer organization needs to have at least 7 per cent of the total number of employees in the sector in order to become representative; in order to extend to the whole sector a collective agreement signed between the social partners that are representative at sectoral level, the partners must prove that each of them has at least 50 per cent of the sector’s employees. As a consequence, only two sectoral collective agreements have been concluded since 2011, for the health care and veterinary activities sector(the collective agreement of 21.11.2013, signed between the Ministry of Health and Sanitas Federation, CNS.SAN.Asist, CNS Cartel Alfa, BNS, CNSLR Fratia and CNS Meridian) and for the pre-university education sector(collective agreement of 13.11.2014, signed between the National Federation of Free Unions from Education, FSLI, FSI Spiru Haret and the Ministry of Education). Mandatory collective bargaining is at the enterprise level for companies with more than 21 employees. Data from the Labour Inspectorate point to 14,343 active collective agreements at company level in September 2015. But it is worth mentioning that 86 per cent of the overall number of active collective agreements were concluded and signed by employees’ representatives and only 14 per cent by representative trade unions. The situation is even more dramatic in the private sector – only 8 per cent of the collective agreements at company level have been concluded by representative trade unions. Prior to the 2011 Political success: Reform of the reform may allow unions to re-gain some grounds lost. legislative change, all agreements at company level were signed by representative unions. These figures il lustrate the impact of the 2011 reform on trade union strength and collective bargaining by unions. 7

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS Table 4: Collective agreements concluded at company level in Romania, 2005–2015 Total collective agreements Concluded by unions Concluded by employees representatives 2005 10936 10936 2006 11602 11602 2007 12206 12206 2008 11729 11729 2009 10569 10569 – – – – – 2010 7718 7718 – 2011 7473 1050 6423 2012 8783 1235 7548 Source: Labour Inspection 2013 8726 1226 7500 2014 9477 1332 8145 In order to address this critical situation, in 2013 the trade unions managed to submit through a group of 73 MPs(most of them from the Social Democratic Party) a draft law aiming to amend the Social Dialogue Law. The law was adopted two year later, in December 2015. The new law provides for a significant change in the collecti ve agreement process that will impact the above described situation. The new law stipulates that in companies without a legally representative trade union, the collective agreement can be signed by the representative trade union federation. It is expected that this provision will boost the trade union role in the collective bargaining process and rebalance the relationship between unions and employees’ representatives. Following the abolition of national collective bargaining in 2011, collective bargaining coverage declined from 100 per cent in 2010 to approximately 35 per cent. 17 The abolition of collective bargaining left uncovered approximately 1.2 million employees working in 450,000 companies with fewer than 21 employees; as for the respective companies, collective bargaining is not compulsory. 18 Additionally, before Law 62/2011 came into effect the law provided for mechanisms for the extension of collective agreements to companies not affiliated to the signatory federation. Under the 2011 legislation such a mechanism no longer exists. ILO data on changes in bargaining coverage rates show that Romania had the sharpest decline from 2008 to 2013, at minus 60 per cent. On average, there has been a drop in bargaining coverage of 4.6 per cent in a reference group of 50 countries. 17. Eurofound(2009), Romania – industrial relations country profile, avail able at http://www.eurofound.europa.eu/observatories/eurwork/comparative-information/national-contributions/romania/romania-industrial-relations-profile. 18. Chivu, L./ Ciutacu, C./ Dimitriu, R./ Ţ iclea, T.(2013): The impact of legislative reforms on industrial relations in Romania, International Labour Office, Industrial and Employment Relations Department(DIALOGUE), De cent Work Technical Support Team and Country Office for Central and Eastern Europe, Budapest: ILO. 4. Trade unions‘ power resources as a legacy of previous tripartite structures and a failure to adapt Bohle and Greskovits(in 2012) have argued that Romania has a special type of society with weak state institutions, high centralization of collective bargaining and relatively high mobilization power of trade unions . 19 The trade unions’ links to political parties enabled them to play a key role in establishing one of the most favourable legal frameworks for employees in the region until 2011. Next to the participation in various tripartite institutions, allowing for trade union consultation in the legislative process, national collective bargaining was one of the main sources of union legitimacy before 2011. However, this was merely external legitimacy, not reliant on its members, but on the outcome of collective bargaining and political involvement. This strategy, with a focus on tripartite participation and Traditional system allowed for erosion of organizational coherence and legitimacy issues. collective bargaining at national level implied weak ties with individual members and/ or affiliated organizations and disconnection between union leaders and their members. Over time, this resulted in legitimacy issues among union members. In the context of ever declining trust in politics among Romanian citizens, the political involvement of some union confederations, such as CNSLR Fratia and BNS, resulted in favourable labor laws, but also eroded members’ trust in trade union leaders. CNSLR had several cooperation agreements with the Social Democratic Party (2004, 208), through which the confederation offered electoral support to the party in exchange for eligible places for union members on the party lists. In 2004 BNS 19. Bohle, D./ Greskovits, B.(2012), Capitalist Diversity on Europe’s Periphery, New York: Cornell University Press. 8

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS announced its cooperation with the Great Romania Par- ten impossible to justify further discredited the unions. ty(Partidul România Mare, PRM), a right-wing extremist The corruption allegations eroded members’ trust, but party. The arrangement made the headlines, while for- also make the trade union leaders – and consequently eign embassies criticized the decision. Nevertheless, BNS the whole organization – vulnerable in relation to the reiterated that it would not put an end to the coopera- government, weakening their negotiating power. tion as it guarantees 15 seats in the future parliament for trade unionists, and declared that in its opinion PRM The lack of legitimacy, combined with internal structural is a political formation in the process of modernization, weaknesses, made the trade unions unable to effectively with democratic values and principles. After being elected to parliament, the 17 BNS MPs switched and offered their support to a centre-right political alliance(DA). Several other trade union Opinion polls show a sharp decline in citizens’ trust in Trade Unions – as in Government, Parliament and State Institutions. oppose the austerity measures announced by the government in 2010, consisting in budgetary cuts and structural reforms. Despite the unions’ protests, in leaders from branch federations switched to politics, be2010, the wages of government employees were cut by coming MPs or government officials. All these incidents 25 per cent and social security benefits by 15 per cent, reinforced the perception that the unions function as while VAT was increased by 5 per cent, from 19 per cent launching platforms to political careers and serve their to 24 per cent. A new Labour Code was passed in March leaders’ personal interests, who use union members for 2011, despite disapproval of the trade unions and the their own ends. Opinion polls show a sharp decline in parliamentary opposition and in June 2011 the social dipopular trust in trade unions, falling from about 80 per alogue legislation was modified. 22 The abolition of naticent at the beginning of the 1990s to around 20 per onal collective bargaining became a key issue for all five cent in 2008. 20 A similar trend can be seen with regard national union confederations, which found themselves to trust in the government, parliament and other state deprived of their most important instrument of action institutions. 21 and, correspondingly, of their main source of legitimacy. Corruption scandals and corruption allegations have further eroded the trade unions’ image. In 2013, the president of CNSLR Fratia, the biggest Romanian union confederation, was sentenced to seven years in prison for corruption. In the same year, the Vice-President of CNSLR Fratia, Liviu Luca, was accused of corruption and money laundering and was put under judicial control in February 2016. Despite the criminal investigation against him, started in 2013, the confederation did not remove Mr Luca from his position in the European Economic and Social Committee, to which he was appointed by CNSLR Fratia; on the contrary, the confederations reappointed him in 2015. This was perceived as a gesture of solidarity with a corrupt person and reinforced the idea that the trade unions are corrupt, unreformed institutions. Other union leaders have been accused of conflicts of interests for holding incompatible positions during their term of office. Media articles disclosing the substantial wealth of several union leaders, the significant revenues often earned from trade union-related activities that are of20. Mi ş carea sindical ă din România dup ă 20 de ani, in Revisa 22 Plus, no. 290, on 12.8.2009; http://www.revista22.ro/articol-7281.html. 21. ICCV, Valorile romanilor, Newsletter No. 5, July 2009; http://www.iccv. ro/valori/newsletter/NLVR_NO_5.pdf. Against this background, the responses of the trade union confederations have mostly involved using tripartite mechanisms to push for changes in the Social Dialogue Act, hoping to restore some favourable provisions from the previous legislation. With few exceptions, all efforts have failed: a change in the Social Dialogue Act was made at the end of 2015 and provide for a bigger role for the union federations in collective bargaining at company level, but many other union requests were ignored. Although unions continue to exercise their consultative role in the existing tripartite bodies at local and national level, the impact of the tripartite social dialogue commissions on the policy making process is rather limited. A report issued at the beginning of 2015 that analysed tripartite social dialogue in 2014 indicated that sectoral social dialogue at the ministerial level included 117 meetings of the commissions for social dialogue. 23 During these meetings, 332 legislative drafts were de22. Stoiciu, V.(2012): Austerity Measures and Structural Reforms in Romania: Severe Measures, Questionable Economic Results and Negative Social Consequences, Belgrade: Friedrich-Ebert-Stiftung; http://library. fes.de/pdf-files/id-moe/09310.pdf. 23. Anuarul Dialogului Social 2014(2015), issued by the Ministry of Labour, available at: http://www.mmuncii.ro/j33/images/Documente/Dialog_Social/2015-02-25_AnuarulDialoguluiSocial2014.pdf. 9

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS bated. The report also stated that the effectiveness of minimum wage starting from 1 January 2016. Represensectoral social dialogue was limited by poor preparation tatives of the government, trade union confederations for the meetings and by the disproportionate number of documents submitted for discussion in one session, which After four years, the tripartite determination of Minimum Wages was not functioning, yet. and employers’ organizations met to discuss the proposals in the National Tripartite Council for Social Dialogue. Following the negotiations, the government announced often transformed the meetings into a pure formality. a minimum wage increase to 1250 RON/month, but stThe trade unions are also members of the Social and arting from 1 May 2016. Economic Council(CES), a tripartite body for social dialogue at national level. After the 2011 legislative changes(Law 62/2011), the government left the CES and was replaced by civil society representatives, who, in the opinion of some stakeholders, transformed the CES, for5. Conclusions and prospects: a possible rediscovery of more»traditional« power resources? merly a tripartite body, into a bipartite social dialogue structure. The CES is a consultative forum and must be The trade unions’ influence on political and legislati consulted on all draft laws in its area of competence(the ve processes prior to 2011 had a significant impact on economy, taxes, labour, social protection, health, eduworking conditions, wealth distribution and employees’ cation, research, culture, wages). But the institution has well-being. Labour legislation in Romania was among serious functional deficiencies, due to a series of legally the most protective in Europe with regard to employees, unclarified issues and misinterpretations of the law. often drawing criticism from employers and business representatives. As a result Romania had one of the lowest Although national collective bargaining has been abshares of fixed-term and part-time contracts among EU olished, the trade union confederations are consulted member states, according to Eurostat. As a rule, the naon the statutory minimum wage within the frametional minimum wage negotiated at national level was work of the National Tripartite Council for Social Diaalways higher(5–10 per cent) than the statutory minilogue(Consiliul National Tripartit pentru Dialog Social, mum wage set by the government. Also, the national CNTDS), a tripartite body formed by representatives of collective agreement stipulated different minimum wage the employers’ organisations, trade union organisations, indexes, depending on qualifications and educational the government, the National Bank and the president level, as well as different occupational categories. This of the CES. The CNTDS is a consultative forum for sethad a significant effect on wealth distribution. In 2011, ting out the minimum wage at national level, analysing before the social dialogue and labour law reform, only 2 government strategies and programmes and for resolper cent of employment contracts were at the minimum ving, via tripartite dialogue, economic and social diswage(less than 100,000 contracts); in 2014, after the putes. On several occasions, the trade unions accused reform, the share of minimum wage contracts reached the government of not convening the CNTDS regularly or not adequately preparing the tripartite body’s meetings and thus obstructing social dialogue. Four years after it was established by law, the CNTDS was still not 25 per cent(1,060,875 contracts). The employees’ wage share in GDP was only 35 per cent in 2014 compared with The number of Minimum Wage Contracts increased ten times from 2011 to 2014. a functioning body due to the lack of an internal statute 39 per cent in 2008, although the number of employees establishing its working and decision-making proceduincreased in 2014 compared with 2011 by approximately res. In the summer of 2015, after prolonged efforts the 300,000. This means that a higher number of employees Council adopted its internal statute, which allowed it to were getting a smaller share of GDP and the incidence of function properly. In December 2015, the unions were precarious work was growing. Thus, the declining trade consulted on the government’s recent decision to freeze union influence is negatively affecting all employees and the minimum wage in 2016. Following the government’s is having an impact on social justice. announcement, the five national trade union confedera tions addressed an open letter to Prime Minister Dacian Romanian trade unions are confronted with multiple Cioloss, arguing that economic growth must be shared challenges: declining membership, loss of trust among fairly by all and urging the government to increase the members, negative public image, corruption scandals 10

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS and excessive legislative requirements for collective barpany and federation level, that indicate that some unigaining and representativeness. One can observe some ons are looking in a new direction and embracing a new changes in trade union strategies and practices in an style of action. Strengthening the broken ties between attempt to break the deadlock. For example, BNS ormembers and leaders, between national, sectoral and ganised a legislative initiative for changing the Labour workplace levels is a crucial challenge that the RomaCode, which was modified in 2011. After a failed att nian trade unions must address. While a further reform empt to gather enough signatures in 2012, in September of the social dialogue reform to align it with internati2014 BNS submitted to the Romanian Senate legislative onal labour standards is necessary, it will not solve the initiative B497/2014, which had gathered more than trade unions’ structural problems. One should not for130,000 signatures. In September 2015 the Romanian get that despite the favourable legislative framework in Senate tacitly adopted the draft law and sent it to the place before 2011, the unions’ internal problems have Chamber of Deputies, where it is currently being debadeepened continuously, culminating with their inability ted. Democratic participation in the BNS campaign to gather signatures was one of the first attempts to address the issue of weak internal democracy and the lack Could legislative reform whip trade unions into rekindling organizational principles and legitimacy? to oppose legislation that only put oil on fire and revealed existing weaknesses. The strategy for of communication between the bottom and the top inovercoming the challenges involves rediscovering traside Romanian trade unions. In trying to influence the ditional union practices, namely members’ organising, political agenda and the legislative process, BNS did not internal campaigning and constant communication betmake use, as before, of its formal position in tripartiween all levels. Legislative reforms had negative effects te bodies or the leaders’ personal political capital. By on the unions, but may also prove to be an opportunity contrast, the traditional source of union strength – the for renewing and rekindling the links between the top power and legitimacy coming from the base – was reand the bottom and switching to a different sort of lediscovered. gitimacy, namely, the legitimacy bestowed by members’ power and support. It is highly probable that during this It is not yet clear whether BNS’s endeavour will remain process, some trade unions will disappear or become toan isolated incident or will become the rule for Romanitally irrelevant, the consequence of which will be a lower an unions in future. There are other examples, at commembership rate. 11

Appendix VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS Confederatia Nationala a Sindicatelor Libere din Romania-Fra ţ ia (CNSLR – Fratia, National Confederation of Free Trade Unions of Romania – Brotherhood) NTUC Cartel Alfa(National Trade Union Confederation »Cartel Alfa«) Blocul National Sindical(BNS, National Trade Union Bloc) Founded 1993 1990 1991 President and Vice-President Leonard Barascu, President Liviu Luca, Prime Vice-President Bogdan Hossu – President Liviu Apostoiu, Vice-President Petru Sorin Dandea, Vice-President Dumitru Costin, President Ion Pisc, Prime Vice-President Number of member-unions 28 branch federations, from all economical sectors; 41 local branches(county offices) 41 branch federations from all economical sectors; 42 local branches(county offices) 34 federations from all economical sectors; 41 local branches(county offices) Total no. of members 306,486 259,443 253,227 Funding / Financial sources Membership fees Membership fees Membership fees Trade union organization and tariff coverage 7.1 % unionisation rate at national level 5,6 % unionisation rate at national level 5,5% unionisation rate at national level Political orientation/ affiliation No declared political orientation. In the past the confederation had several protocols agreements signed with the Social-Democratic Party Christian-Democratic according to the statute. No political partisanship during its whole activity. No declared political orientation. In 2004, BNS announced its cooperation with the Great Romania Party (Partidul România Mare, PRM), a right wing, extremist party, as it guarantees 15 seats in the future parliament for trade unionists. After being elected in the parliament, the 17 BNS MPs have switched and offered their support for another center-right political alliance(D.A). International memberships ETUC, ITUC ETUC, ITUC ETUC, ITUC Confederatia Sindicala Nationala Meridian(National Trade Union Confederation»Meridian«) Confederatia Sindicatelor Democratice din Romania (CSDR, Democratic Trade Union Con-federation of Romania) Founded 1994 1994 President and Vice-President Ion Popescu, President Iacob Baciu, President Number of member-unions 29 branch federation; 42 local branches(county offices) 20 branch federation; 40 local branches(county offices) Total no. of members 264,811 249,264 Funding / Financial sources Membership fees Membership fees Trade union organization and tariff coverage 5.7 % unionisation rate at national level 5,2 % unionisation rate at national level Political orientation/ affiliation No political orientation No political orientation International memberships CESI(European Confederation of Independent Trade Unions) ETUC, ITUC Sources: Confederations’ web-sites; Ministry of Labour for the membership data. 12

VICTORIA STOICIU| ROMANIA’S TRADE UNIONS AT THE CROSSROADS Federatia Sanitas – Sanitas Federation Federatia Sindictelor Libere din Invatamant – National Federation of Free Unions of Education Federatia Sindicatelor din Invatamanat Spiru Haret – »Spiru Haret« Education Unions Federation Founded 1990 1990 1995 President and Vice-President Leonard Barascu, President Marius Sepi, Prime Vice-President Simion Hancescu, President Ioan Tent, Prime Vice-President Nistor Marius Ovidiu, President Organization area Health care sector Education sector Education sector Number and importance of company unions/ Employee representation at company level Trade unions from over 500 medical establishments; 42 local branches(in every county) 60 trade unions from company level from 4.400 establishments About 80 trade unions Total no. of members 105,000 179,000 61,884 Funding / Financial sources Membership fees Membership fees Membership fees Trade union organization and tariff coverage 54 % unions densit in the sector; signed a sectorial collective agreement in 2014 63 % union density in the education sector; signed a sectorial collective agreement in 2014 (together with»Spiru Haret« Education Unions Federation) Signed a sectorial collective agreement in 2014(together with the National Federation of Free Unions of Education) Political orientation/ affiliation No political affiliation No political affiliation No political affiliation Membership in Trade Union Confederations and international memberships CNSLR FRatia; EPSU(European Public Servants Union) CSDR; European Trade Union Committee for Education(ETUCE); Education International CNSLR Fratia; Education International Sources: Ministry of Labour for the membership data; federations’ web-sites. 13

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About the author Victoria Stoiciu is Project Coordinator of the Friedrich-EbertStiftung in Romania. Imprint Friedrich-Ebert-Stiftung| Dept. for Central and Eastern Europe Hiroshimastr. 28| 10785 Berlin| Germany Responsible: Jörg Bergstermann, Coordinator for Trade Union Programs in Europe and North America Phone:+49-30-269-35-7744| Fax:+49-30-269-35-9250 http://www.fes.de/international/moe To order publications: info.moe@fes.de Commercial use of all media published by the Friedrich-EbertStiftung(FES) is not permitted without the written consent of the FES. The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung. This publication is printed on paper from sustainable forestry. ISBN 978-3-95861-654-7