Report reveals negative impact of industrial relations changes in Romania

Earlier this year the International Labour Organisation published report by a group of independent experts which is highly critical of the impact of industrial relations reforms in Romania.

The reforms, mainly implemented in the Social Dialogue Law of 2011, were introduced by the then government as it claimed they were necessary to help meet budget deficit reduction targets and restore macroeconomic stability and employment growth.

The report, The Impact of Legislative Reforms on Industrial Relations in Romania, not only criticises the changes in terms of their negative impact on social dialogue and collective bargaining but argues that they have also failed to deliver any of the claimed economic effects.

The experts identified three main changes to the industrial relations system:

- the abolition of collective bargaining at national level;

- the tightening of extension criteria at sectoral level; and

- the requirement of an absolute majority membership for a trade union to engage in collective bargaining at company level.

The combined effect of these measures is that "over 1.2 million workers,
particularly those employed by companies with less than 20 employees are effectively excluded from collective bargaining with an immediate negative impact on wage levels and on working conditions in general."

The report also found that there has been a negative impact on national institutions of social dialogue in general and the Economic and Social Council no longer functions effectively. There has been a notable drop in collective bargaining activity at the sectoral and enterprise levels
and provisions in agreements signed cover less workers and offer inferior protection compared with previous agreements.

The consequent erosion of regulation through collective agreements has placed a greater onus on the state to regulate workplaces. The report found that labour inspectors reported a significant rise in undeclared work in 2012.

Public sector

As highlighted in EPSU's Wrong Target, public sector workers in Romania have suffered massive cuts in pay. This report confirms the impact, saying:

"Public sector workers have also been especially badly affected by new laws which affect their wages and a wide range of other entitlements. These reforms have been combined with new rules restricting the scope
for collective bargaining to take place about those very entitlements."

General conclusion

The report makes damning reading both in terms of the erosion of trade union and worker rights and economic and social impacts.

"Ultimately, the reforms have had detrimental social impacts and not delivered the economic benefits promised. Workers and their representatives have lost a wide array of entitlements, leaving them in a very precarious working situation. There has been a decline in both the quantity and the quality of work and employment. There has also been a decline in the number of people in employment and in the average
number of hours worked per week."

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