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Romania Key Facts Population 21462000 Collective Bargaining

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									Romania
Key Facts

Population                                                 21,462,000
Collective Bargaining Coverage                             100%
Proportion of Employees in Unions                          34%
Principal Level of Collective Bargaining                   National for minimum terms; improved at
                                                           industry and company level
Workplace Representation                                   union
Board-level Representation                                 no
Company Board Structure                                    monistic
Sources: see individual country sections; where a range of figures has been quoted, the lower
number has been taken

Trade Union
Union density is relatively high in Romania with up to half of all employees in unions, although the
figures are very uncertain. The structures are fragmented, with five separate confederations,
CNSLR-Frăţia, BNS, CSDR, CNS Cartel Alfa and Meridian, each with a substantial number of affiliated
federations.

There are probably between two million and two-and-a-half million trade unionists in Romania,
although the figures are not precise. As a result estimates of trade union density vary. The unions
estimate current density at 48% to 50%, while a study published by the employers association
UGIR-1903 in 2005 calculated that 44% of employees were union members in 2002.1 However, a
comparative database of union membership gives a lower figure, putting union density in Romania
at 33.7% in 2006.2 This is still above the EU average but is well below the current estimate from
EIRO, which takes the union estimates and puts union density at 50%.3

There are currently five main union confederations and there are no precise figures on their
membership. CNSLR- Frăţia, which states on its website it has more than 800,000 members, is
certainly one of the largest. It developed from a merger of the former official trade union movement
(CNSLR) with another confederation (Frăţia) in 1990. CNS Cartel Alfa, which was set up in 1990, is
another major union confederation. An EIRO report on trade union membership, estimated that it



1
  Patronate si Sindicate in Romania, UGIR-1903, 2005
2
  The ICTWSS Database: Database on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention
and Social Pacts compiled by Jelle Visser, at the Amsterdam Institute for Advanced Labour Studies AIAS, University
of Amsterdam, January 2009
3
  Romania: Industrial relations profile, EIRO, 2009 http://www.eurofound.europa.eu/eiro/country/romania.pdf
had 400,000 members in 2008.4 However, Cartel Alfa disputes this, and its website states that it has
one million members. The EIRO report places BNS, which had its founding congress in 1991, in
third place in membership terms, with 375,000 members in 2008. CSDR, which emerged after a
spilt in CNSLR-Frăţia in 1994, appears to be the next largest; the EIRO report estimated its
membership at 345,000 members in 2008. And the smallest of the five, with around 170,000
members in 2008, according to the European Foundation, is CSN Meridian, set up in 1994.

These five confederations are all classed as representative at national level, giving them the right to
negotiate national collective agreements. All five are members of Romania’s tripartite economic and
social council, the CES. Confederations must meet certain criteria in order to be classed as
nationally representative. These include having members in at least half of Romania’s
administrative districts and in at least a quarter of its industrial sectors. In addition, a nationally
representative confederation must have at least 5% of all employees in membership (see section on
collective bargaining for more details).

The divisions between the confederations are in part political – CNSLR-Frăţia has a formal
cooperation agreement with the social democratic party PSD, while the BNS has also had links with
the PSD in the past. Cartel Alfa’s approach is based on a Christian democratic philosophy, although
it emphasises that is “totally independent of government or political groups”. There are also some
industrial differences, with individual confederations being stronger in some industries than
others.

All the confederations have large numbers of industry federations affiliated to them. CNSLR-Frăţia
has 36 affiliated industry federations; Cartel Alfa has 45; BNS 30; Meridian 27; and CSDR 20. There
are also some union federations not affiliated to the five main confederations. The federations
themselves typically bring together large numbers of small unions, which often only cover a single
employer. (Unions can be set up by a minimum of 15 people working in the same industry or
profession.) One of the consequences of this is that unions are fragmented with competition for
membership.

In 2007 an attempt was made to establish a much more unified structure for the majority of
Romania’s trade unionists. Three of the five confederations – CNRLR-Frăţia, BNS and Meridian –
announced in January 2007 that they had agreed to form a new joint alliance – the ACSR, with a
separate leadership structure, headquarters and legal personality. This also had the potential to
resolve long standing disputes over the ownership of trade union assets, inherited from the period
before 1989. However, one of Romania’s largest confederations, Cartel Alfa never joined in the
talks, arguing that the proposed merger could result in the loss of trade union “pluralism”; another,
CSDR withdrew; and overall there appears to have been little progress towards a formal merger.

Unions are, however, able to work together. A group of union federations in the public sector was
formed in September 2009 to protest against government policies to cut public spending, and it was
able to organise strikes and demonstrations at the start of October. More recently all five


4
 Trade union membership 2003-2008, EIRO, 2009
http://www.eurofound.europa.eu/eiro/studies/tn0904019s/tn0904019s.htm
confederations have acted together to protest against the government’s austerity plans and in
opposition to changes to the labour code (see section on collective bargaining).

Overall trade union membership in Romania has declined since the beginning of the 1990s as the
economic role of the state has been cut back and unions’ functions have changed. However, a survey
by the European Foundation in 2005 found that the confederations were optimistic about future
membership growth.5

One significant feature about trade unionism in Romania is that there have been higher levels of
membership in industry than in public administration. The 2005 employers’ association study
found that, in 2002, trade union density was at 85% in extractive industries, 83% in the
metalworking industry, and 76% in the chemicals industry, compared with only 30% in public
administration.6 However, this probably reflects the fact that it was only in 2003 that many of those
working in the public sector with the status of a public servant (funcţionarul public) gained the
right to join a union without further authorisation. A later report produced by the European
Foundation found unions reporting that their membership was declining in industry, while it was
increasing in the public sector.7

Collective Bargaining
Collective bargaining at national level sets national minimum pay and conditions which apply
across the whole economy. Negotiations also take place in a substantial number of industries and
companies. But it is only where unions are strong at company level that significant improvements
are negotiated. Overall the law provides detailed rules for collective bargaining, although these may
alter if the government’s plans are implemented.

The framework

Legislation provides for negotiations to take place at national, industry and company level, as well
as for groups of companies. The national level agreements are the most important in setting
minimum terms and conditions. However, some company level agreements provide for significant
improvements on the national minimum arrangements.

Two key elements of the legislative framework for collective bargaining are that agreements cover
all employees involved, and that lower level negotiators cannot agree terms and conditions that are
inferior to those agreed at a higher level. The result is that national level agreements, which in the
past were signed annually but recently have run for several years, cover all employees – in this
sense collective bargaining coverage in Romania is 100% – and provide a minimum which can then
be improved on in industry and company negotiations.


5
  Capacity building for social dialogue in Romania, European Foundation for the Improvement of Living and
Working Conditions, 2006
6
  Patronate si Sindicate in Romania, UGIR-1903, 2005
7
  Capacity building for social dialogue at sectoral and company level: Romania, European Foundation for the
Improvement of Living and Working Conditions, 2007
These national agreements set terms and conditions in some detail. For example, the agreement
signed at the end of 2010 for the period 2011 to 2014 does not simply establish a national unskilled
minimum rate. It fixes minimum differentials for other employees – 20% higher for skilled workers
and those who have completed secondary school, 50% higher for those who have completed higher
education and double the minimum for those with extensive higher education experience. It also,
among other things, deals with health and safety, overtime rates, holidays and childcare.

Large parts of the economy are also covered by industry agreements. The ministry of labour lists 27
agreements on its website, covering industries such as agriculture, mining ,chemicals, construction,
transport, machine building, the electrical industry, tourism and commerce, and there are also 23
agreements for groups of employers, some of which are in the public sector. These cover, among
other things, justice, prisons and public transport. To some degree these industry agreements
restate large parts of the national agreement and in some industries the improvements on the
national agreement are minimal. However, while some agreements state that the minimum pay in
the industry will be as provided in the national agreement, others provide for higher minimum
rates. The mining industry agreement, for example, states that the minimum pay in the industry is
1.5 times the level in the national agreement.

At company level, although not at national or industry level, there is a legal obligation to negotiate –
although not to reach agreement. The employer should initiate the process. This obligation applies
where the company has 21 or more employees, and, in the first half of 2010, 4,360 collective
agreements were concluded at company level.8

In cases where the union is strong – normally larger companies and often those with continuing
state involvement – these agreements provide significant improvements on the national agreement.
However, there are large numbers of companies where the agreements are essentially formal in
character and do not improve on the national minimum arrangements. In addition, companies with
fewer than 21 employees – a substantial proportion in Romania – are not obliged to negotiate and
generally do not do so.

Collective agreements, by law, must be in writing and should be registered with the appropriate
authorities – district in the case of company agreements, national in the case of industry and
national agreements. There can only be one collective agreement for each bargaining group – in
other words there cannot be competing agreements at industry level nor can there be separate
agreements for different groups of employees in the same company.

As well as collective bargaining between employers and unions, there are also tripartite structures
at national level, which bring together employers, unions and the government. The most important
of these is the economic and social council, the CES, on which all five national representative unions
have seats.

In addition there have been joint agreements between the three parties reached outside the formal
structures. In July 2008, the unions, employers and government agreed a formula under which the

8
 Buletin statistic trimestrial în domeniul muncii şi protecţiei sociale nr.2 /2010, Table 13 Ministry of Labour, Family
and Social Protection
statutory minimum wage would increase from 31% of average wages to 50% between 2008 and
2014 (see below). In January 2009, a series of anti-crisis measures were agreed by the three
parties. However, since then both unions and employers have expressed their dissatisfaction over
the way the government has tackled the crisis.

The government is proposing to make major changes to this structure of collective bargaining, in
changes to the labour code, which could come into force in 2011.

Who negotiates and when?

The law provides clear criteria setting out who is entitled to negotiate at different levels. At national
level negotiations take place between the employers’ associations and nationally representative
confederations, currently five (see section on trade unions). To be nationally representative, and
able to negotiate at this level, a union confederation must be independent and have affiliates in at
least half of Romania’s administrative districts and a quarter of the country’s industrial sectors. It
must also have at least 5% of the total number of employees in the economy in membership. (There
are similar thresholds for the employers’ associations, although the employers they represent must
employ at least 7% of all employees.) At industry level, unions must represent at least 7% of the
employees in that industry to be representative, and be able to negotiate at this level, and at
company level they must represent at least one third of the employees of the company. However,
union bodies that belong to the nationally representative confederations do not have to meet the
criteria at lower levels. This means, for instance, that union groups affiliated to the nationally
representative confederations can negotiate at company level, even if they do not represent one
third of the workforce.

Where there are no unions, company level negotiations can be undertaken by employee
representatives specifically elected for that purpose.

The legal minimum period that a collective agreement can last is 12 months, although longer
agreements can be reached and sometimes run for up to four years. If no agreement has been
reached, employers at company level have an obligation to begin negotiations a year after the
previous attempt to reach an agreement at company level and negotiations should not last longer
than 60 days. Negotiations typically take place at the end of one calendar year and the start of the
next.

The subject of the negotiations

Collective agreements must, by law, cover at least pay, working time, work patterns and working
conditions and the legislation also makes specific reference to arrangements providing protection
for union representatives and employer payments into a fund intended to support collective
bargaining – part of which goes to the unions. However, there is nothing to stop agreements
covering a much wider range of topics. For example, as well as the issues listed above, the national
agreement signed in December 2010 also covered training, retirement bonuses, redundancy
arrangements, bereavement leave, and consultation on individual dismissals. A typical industry
level agreement will cover pay premia for shift work and night work, supplements for hazardous
work and service-related payments. A typical company level agreement will cover pay, working
time arrangements, the provisions for union representatives, health and safety, and possibly
training.

There is a national minimum wage set by the government following discussions with unions and
employers, and national level collective bargaining also sets a minimum rate which applies across
the country (see above). Because collective bargaining cannot set worse terms and conditions than
those laid down by law, the minimum rate set by collective bargaining cannot be lower than the
legal minimum set by the government and generally is higher. However, the national minimum rate
set by the state is relevant for those employees in the public sector whose pay is set by government
regulation rather than collective bargaining.

Workplace Representation
Employee representation at the workplace is through the unions, although legislation does provide
for employee representatives to be elected if there are no union members. Workplace union
structures potentially play a key role in collective bargaining but they also have significant
consultation rights.

Union organisations at the workplace are the main body for employee representation. And,
although by law employee representatives can be elected where there are 20 employees and no
union is present, in practice this is very rare. Legislation implementing the EU directive on a general
framework for information and consultation, which was passed in December 2006, is unlikely to
change the situation. However, changes to the labour code, which the government was proposing at
the start of 2011, will potentially weaken the position of trade unions and strengthen that of
employee representatives at the workplace.

The arrangements for employee representation at workplace level are governed both by legislation
and by clauses in the national collective agreement, which is legally binding on all employers (see
section on collective bargaining)

Numbers and structure

The numbers and structure of trade union representation at the workplace depend on the rules of
the union.

However, if there are no union members in a company and it has more than 20 employees, the
employees are entitled to elect representatives at a general meeting. The legislation does not
stipulate how many should be elected, stating only that the number should be mutually agreed with
the employer, in relation to the number of employees.

Tasks and rights

One of the key roles of the workplace trade unions is in negotiating collective agreements, but they
also have rights to be informed and consulted, and in some areas they need to agree before changes
can be made.
In the area of information and consultation, there is a general obligation on the employer to consult
with the union on decisions “likely to affect substantially their rights and interests” (Romanian
Labour Code) and on a number of issues there are specific requirements to do so. These include
holiday arrangements, health and safety issues, an annual training plan and internal company rules.
The union should also be consulted on redundancies where it has a right to make proposals for
avoiding dismissals or cutting their number. (The employer must respond to these proposals, giving
reasons for the redundancies within 10 days, as well as consulting the unions on a “social plan” to
reduce their impact.) In the case of business transfers, both the company transferring the business
and the one receiving it should consult the union. The union should also be consulted on the
introduction of flexible working arrangements and on the use of any social fund the company may
have, for example, for providing a canteen. The union’s information and consultation rights have
been strengthened by legislation implementing the 2002 EU directive on a general framework for
information and consultation at national level. This was passed in December 2006 and came into
force on 1 January 2007 and states that the employer should inform and consult about the recent
and probable future development of the business, the current situation and likely changes in
employment, and issues likely to lead to substantial changes to work organisation or contractual
relations.

In a few areas, the union must give its consent before changes can be made. Two of these are where
employees are asked to work for more than 15 days continuously, and in setting work loads. Health
and safety training should be agreed with the union and the health and safety committee, and the
union should also agree pay incentive schemes and short-term unpaid lay-offs to cope with low
levels of work.

The workplace union is also entitled to support union members in dispute with the employer and
the union can represent them in court.

The tasks of employee representatives, who can only be elected if there are no union members, are
to ensure that employees’ rights are complied with, to participate in drawing up the company’s
rules and generally to promote the interests of employees. The specific consultation rights of the
workplace union organisation also pass to the employee representatives, where they exist.

This situation is not changed by the legislation implementing the EU directive on information and
consultation. Although it refers to the rights being given to employee representatives, it also makes
it clear that these employee representatives are union representatives except where there is no
union. The arrangements for informing and consulting employees are to be established by
collective agreement.

Election and term of office

The choice and term of office of workplace union representatives depend on the rules of the union.

Employee representatives in workplaces where there is no union are elected by the employees’
general meeting – provided that at least half of the employees vote. The legislation does not set out
any specific election or nomination procedures. Their period of office is two years
Protection against dismissal

Union members who are elected to positions within the union may not be dismissed, other than for
gross misconduct, during their period in office and for two years afterwards, unless the body of
which they are a member gives its agreement. There are also other provisions in the Romanian
labour code which prohibit both discrimination and dismissal on the basis of an individual’s union
membership or activity.

Employee representatives similarly cannot be dismissed during their period of office for carrying
out their duties as employee representatives.

Time off and other resources

Elected union representatives at the workplace are entitled to five days time off a month, although
the total number of representatives with this right and the cumulative total amount of time off are
specified in collective agreements.

Employee representatives are entitled to 20 hours time off per month.

The employer should also provide space for the union to carry out its activities, as well as access to
office equipment such as a fax.

Representation at group level

The legislation does not provide for any form of employee representation above company level.

Board-level Representation
Employee representatives have no right to be at board members in Romania, although they can
attend board meetings for some items.

There is a single-tier board system and employees have no right to be board members. However,
the law on trade unions states that elected delegates of the representative trade union (see section
on unions) should be invited to participate in management boards to discuss “problems of
professional, economic, social, cultural and sports interest”. The trade union delegates do not have a
vote but they should given the agenda and access to the material to be discussed. They should be
told of the board’s decisions on the issues within 48 hours.

European-level Representation
Romanian members of European bodies linked with European Works Councils and the European
Company are chosen by the existing employee representatives, who, in the vast majority of cases,
will be the trade union representatives at company level.
European Works Councils

Romanian members of the special negotiating body (SNB) for an EWC are appointed by the existing
employees’ representatives. These are defined in the legislation as the trade union representatives,
unless there is no union, in which case employees have a right to elect individuals to represent their
interests. If there are no existing employees’ representatives – either trade unionists or others –
Romanian employees can elect the Romanian members of the SNB directly.

The same procedures apply for the Romanian members of an EWC set up under the fallback
procedures in the annex to the directive.

European Company

Romanian members of the special negotiating body (SNB) for a European Company are appointed
by the existing employees’ representatives. These are defined in the legislation as the trade union
representatives, unless there is no union, in which case employees have a right to elect individuals
to represent their interests. If there are no existing employees’ representatives – either trade
unionists or others – Romanian employees can elect the Romanian members of the SNB directly.

The same procedures apply for the Romanian members of the SE representative body set up under
the fallback procedures in the annex to the directive. The legislation does not deal with how
Romanian representatives at board level under the fallback procedures to the directive are to be
chosen.

Health and Safety
Health and safety committees are as a rule set up in undertakings with more than 50 employees.

Health and safety are covered by the 1996 Act on protection at work, which was amended in
October 2000.

An Act of June 1999 relates to the setting up and structure of the labour inspectorate.

Health and safety are covered by the 2003 Act forming part of the Labour Code (Title V).

Health and safety committees are as a rule set up in undertakings with more than 50 employees.

There are considerable differences between the theory and the practice. The legislation requiring
employee health and safety representation is in fact applied properly only in highly unionised
undertakings.

Furthermore, there is no penalisation of employers who refuse to set up health and safety
committees.
Financial Participation
In the context of the privatization process which took place after 1990, 30% of the shares of
Romanian commercial companies were to be transferred to the Romanian workforce. Many of
those who received shares sold them in the following years, so that important questions are for
how long the employees still owning shares will keep them and how they will make use of their
ownership rights in the operational decision-making process.

Employee share ownership was initially introduced in the last decade of the communist regime (at
the beginning of the 1980’s) in the form of so-called “social parts” of the “national capital”, which
had to be purchased by each employee. The employees’ money contribution (in form of “social
parts” held) was supposed to reach about 30% of the total amount of Romania’s “national capital”.
In the course of the privatization process started in 1990 these accumulated assets have been
returned to the employees as an amount of money paid to each one of them; the remaining capital
was to be privatized in the following years.

With the privatization laws of 1990, 1991 and the following years the employees’ financial
participation was put on a new basis. As much as 30% of the shares of Romanian commercial
companies9 were transferred to the resident population in form of free-of-charge property
vouchers. The remaining 70% percent of shares were to be sold to Romanian and/or non-
Romanian investors. Another focus of the privatization laws, especially in 1994-1995, was the
“MEBO method” (“Management Employee Buy-out”), which was defined as the standard
privatization procedure for small enterprises.10

Cooperatives, another form of employee ownership, have been part of the Romanian economic
landscape from the second part of the 19th century. Under the communist regime many of their
fundamental functions were altered, primarily their essential democratic decision-making rights.
Despite their long tradition in Romania, cooperatives nowadays no longer play such an important
role.

Another form of employee financial participation is profit-sharing. The most widespread profit
sharing scheme in Romania after 1989 is “gain-sharing”. Each employee receives a bonus at the end
of the year, depending on his/her and the company’s overall performance. The basis of calculation
is the company’s net profit.

At the moment, the topic of employee financial participation enjoys no special attention from the
government or political parties, other problems affecting large parts of the population having
priority. The only aspect on the agenda is the sale of minority shares to the employees in the course
of privatization of companies from the autonomous administration (regii autonome) and other
state companies, such as the National Lottery (Loteria Nationala) and the National Printing House


9
  In 1990 all existing Romanian companies have been divided (Law 15/1990) into commercial companies, with
share capital, and autonomous administrations (regii autonome), which were initially supposed to comprise only
strategic sectors of the national economy
10
   Commercial Companies with fewer than 500 employees
(Imprimeria Nationala)11 , which have not been privatized as yet. For the population the credibility
of government support for the employee financial participation is relative low, as corruption
scandals and insider deals suspicions were a constant companion in some of these privatization
cases.




11
     Emits fiscal stamps, fiscal documents, etc

								
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