MPIfG Working Paper 05/7, July 2005
Strategic Unionism in Eastern Europe: The Case of Romania
and Karl Koch, London
South Bank University
This paper is a modified and updated version of a
chapter published by the authors in Huzzard/Gregory/Scott's (2004) book. An
earlier version of the paper was presented to the IIRA 7th European Congress
'The Future of Work in Europe' held in Lisbon in 2004. The authors are grateful
to the participants of the IIRA Congress for the discussions, and to Marco
Hauptmeier, Tony Huzzard and Luana Pop for their useful comments.
The shift from centrally planned economies to market-oriented economic models
presented trade unions in Eastern European countries with crucial choices in
relation to their roles as industrial relations actors. This paper investigates
whether (and why) unions have chosen adversarial and/or co-operative
relationships with the employers, based on a strategic choice conceptual
framework. It focuses on trade union relations with employers at national,
sectoral and company levels in Romania. It is argued that adversarial and
co-operative relations between unions and employers developed simultaneously
after 1989, but co-operation was the prevalent approach. Evidence suggests that
ideological legacies, former institutions and the initial decision to
participate in the macroeconomic transformation played a key role in shaping
unions' choices towards co-operation with employers. Although this paper
confirms the widespread view that labour is rather weak in Eastern Europe, it
indicates that unions can be proactive and shape their own future if they have
the capacity to mobilise their members and union leaders have the skills and
willingness to use both conflict and co-operation in their relationships with
employers. The comparison of evidence from Romania with other Eastern European
countries reflects on the stage of Romanian transformation and also illustrates
a wider possible applicability of the theoretical framework employed for the
Mit dem Wechsel von Zentralwirtschaft zu
Marktwirtschaft mussten Gewerkschaften in osteuropäischen Ländern entscheiden,
wie sie sich in den industriellen Beziehungen positionieren. Dieses Working
Paper fragt, ob und warum Gewerkschaften sich strategisch für ein
kooperationsorientiertes oder konfliktorientiertes Verhalten gegenüber den
Arbeitgebern entschieden haben. Gegenstand der Untersuchung sind dabei die
Beziehungen zwischen Arbeitgebern und Gewerkschaften auf nationaler, sektoraler
und Unternehmensebene in Rumänien. Konflikthafte und kooperative Beziehungen
zwischen Arbeitgebern und Gewerkschaften entwickelten sich nach 1989 parallel
zueinander, mit einer höheren Tendenz zur Kooperation. Die Studie zeigt, dass
nicht nur ein ideologisches Erbe und überkommene Institutionen, sondern auch die
anfangs entschiedene Teilnahme an der makroökonomischen Transformation für die
Entscheidung der Gewerkschaften zur Kooperation mit den Arbeitgebern
ausschlaggebend waren. Die weit verbreitete Ansicht, dass Gewerkschaften in
Osteuropa schwach sind, wird bestätigt. Gleichzeitig wird jedoch gezeigt, dass
sie es in der Hand haben, ihre eigene Zukunft offensiv zu gestalten,
vorausgesetzt, es gelingt ihnen, ihre Mitglieder zu mobilisieren. Darüber hinaus
müssen Gewerkschaftsführungen fähig und willig sein, sowohl Konflikt als auch
Kooperation in ihren Beziehungen zu den Arbeitgebern nutzen können. Der
Vergleich der Ergebnisse aus Rumänien mit anderen osteuropäischen Ländern
spiegelt den Stand der Transformation in Rumänien wider und zeichnet ebenso
einen erweiterten Anwendungsbereich des der Studie zugrunde liegenden
1 Introduction: radical change in 1989
The fall of the communist regime in Eastern Europe in 1989
conferred on unions the freedom to enter into collective bargaining and social
partnership with employers. In the unitary communist system, with its centrally
planned economy, trade unions were the largest mass membership organisation, but
their main functions were to support the realisation of the economic plan
decided by the communist apparatus and to distribute social benefits (Thirkell/Vickerstaff
2002: 58). At the company level, there were no clear boundaries between unions
and the management. However, in contrast with business unionism in western
countries, the trade union leadership was integrated, and subordinated to the
Communist Party (Nelson 1986: 108). Therefore, collective bargaining and social
partnership between independent unions and (private) employers are new phenomena,
which emerged after the collapse of the communist regime in 1989.
This paper explores the strategic choices of trade unions
in Central and Eastern European countries (CEECs) during a period of radical
change from a centrally planned economy to a market economy model. It
investigates whether (and why) unions have chosen adversarial and/or
co-operative relationships with the employers. It focuses on trade union
relations with employers at national, sectoral and company levels in Romania,
while there is a limited inference to other CEECs in order to highlight and
contrast the developments in the Romanian case. Despite a general climate that
has favoured the market mechanism and resulted in a massive decline of union
membership as well as a decrease in living standards for most employees (Ost
2000; Pollert 1999), evidence suggests that unions have often chosen a
partnership approach to industrial relations (Ost 2000; Vidinova 1997), except
when their survival has been at stake. As a result, various incipient forms of
partnership between unions and employers have emerged in the precarious
transition context, but the social partners are still in the process of learning
how to deal with the new context.
The paper contributes to a relative new understanding of
the strategic choices made by industrial relations actors, and in particular
trade unions, in maintaining and expanding their roles during periods of
economic transformation. Whilst most studies highlight the constraints faced by
unions since 1989 (Crowley 2004; Ost 2000; Pollert 2000), this paper argues that
the transformation process has also provided unions with opportunities. It
emphasises the impact of the choices made by trade unions at different levels on
industrial relations practices at company level. Nonetheless, the findings
suggest that the strategic choices of the unions were not the most important
factor that shaped their role after 1989, as evidence confirms the view of
previous studies that institutional and ideological legacies have represented
major constraints. This study substantiates the widespread opinion that labour
is rather weak in Eastern Europe (Crowley 2004; Mailand/Due 2004; Crowley/Ost
2001; Pollert 1999), but it also illustrates that the transformation process has
been shaped, by the capability of unions to apply selected strategic choices.
The theoretical framework employed extends current conceptual paradigms for
understanding the place and role of trade unions in the complex transformation
processes found in Eastern European countries.
The paper is organised as follows. Section 2 presents the
conceptual framework on strategic unionism. Section 3 explores the current
situation across CEECs, by providing an overview of the social partners and
their relationships. Based on the primary data, the main practices of conflict
and co-operation between unions and employers operating in Romania at the
national (transsectoral), sectoral and workplace levels are examined in Section
4. These findings are analysed in a broader context in Section 5. This outlines
similarities and differences in the choices made by Romanian unions in
comparison to unions in other CEECs at the four levels identified in the
theoretical framework. Section 5 and the concluding part also explore possible
implications for unions in Eastern Europe. The Romanian experience illustrates
an example of opportunities and constraints faced by unions in Eastern Europe in
the context of transformation from the centrally planned economy to a market
2 Strategic unionism - the conceptual framework
A strategic choice perspective on industrial relations was
first developed by Kochan/McKersie/Cappelli (1984) in the US. Their main
argument is that industrial relations practices and outcomes are shaped not only
by environmental forces, as Dunlop's (1958) system framework indicates, but also
by the strategic choices and values of managers, trade union leaders, workers
and public policy (Kochan/McKersie/Cappelli 1984: 20-21). The strategic choice
model of Kochan/McKersie/Cappelli (1984) is criticised primarily because it does
not acknowledge the distribution of power among industrial relations actors,
which is a crucial aspect for imposing their choices on other parties (Kelly
1998: 19). Additionally, it does not provide a predictive model. Despite these
shortcomings, the strategic choice argument that the outcome of the industrial
relations transformation is not predetermined, since there are a variety of
choices depending on parties' strategies and environmental constraints, is
widely accepted (Müller-Jentsch 2004: 27; Huzzard/Gregory/Scott 2004).
Although the Kochan/McKersie/Cappelli (1984) study focused
on the strategic choices of employers, literature on the strategic choices of
the unions started to develop from the 1990s. Recently, Huzzard (2004) developed
a strategic model for trade unions. He argues that despite the macro-level and
micro-level constraints (e.g. economic context, employer strategies, past
choices of unions, technology, etc.) trade unions can have strategic choices at
four interrelated levels as follows:
||Level 1 concerns fundamental choices on mission,
ideology and identity.
||Level 2 refers to key choices on the scope of activities
(e.g. new services or membership recruitment) and relationships.
||Level 3 refers to key choices on ways of relating to
employers (e.g. co-operation or conflict), members, other unions and civil
||Level 4 concerns the choices on union structures,
processes and capacities.
Huzzard (2004: 28) indicates that the higher levels shape
the lower levels (e.g. level 1 shapes level 2), while the lower levels may also
have an influence on the higher levels. Although the strategic choice model for
trade unions does not acknowledge how unions acquire resources, it is a
comprehensive conceptual framework that facilitates the understanding of the
connections between unions' choices at different levels. Additionally, a focus
on unions' strategic choices provides the opportunity to demonstrate that unions
can shape their own future, despite the fact that they are rarely in the driving
seat (Huzzard 2004). The strategic choice approach to unions emphasises far more
the constraints on union choices than the original use of the concept by Kochan/McKersie/Cappelli
(1984) did to explain employers' behaviour during the 1980s in the US. This
theoretical framework is part of the body of recent literature on actor-centred
institutional approach, which recognises the crucial role of the existing
institutional setting in facilitating or constraining actors' choices,
preferences and the evaluation of the outcomes (Müller-Jentsch 2004; Scharpf
The demise of communism in Eastern Europe placed trade
unions in a pluralistic societal framework where strategic choices became an
essential element of their role. Old and newly established unions had to take
key decisions regarding their mission and ideology, the scope of their
activities, the type of relations with the other actors and their internal
structure. In this study it is assumed that unions have enjoyed a degree of
discretion in making these decisions (Meardi 2004; Vikerstaff/Thirkell 2000;
Vidinova 1997), while it is acknowledged that their decisions have been
constrained by both the external environment and their own power resources,
structures and values.
The paper utilises Huzzard's (2004) strategic choice model to identify key union
choices in the context of the radical change from a centrally planned economy to
a market economy. It focuses on level 3 choices of unions vis-à-vis employers (conflict
and/or co-operation) in Romania. In line with Huzzard (2004: 35), collective
bargaining is seen primarily as an adversarial relationship between capital and
labour ('them and us'), based on the short-term interests of parties that have a
rather low degree of trust in each other (Crouch 1993). Social partnership is
considered a 'mutual gains' exchange based on long-term shared interests and a
high degree of trust, having a broader scope than collective bargaining (Kochan/Osterman
1994). As there are not generally agreed definitions, these terms are used from
an Anglo-Saxon perspective. However, it is recognised that in practice
collective bargaining and social partnership involve elements of both conflict
and co-operation. Western European countries have evolved a spectrum of
collective bargaining and partnership practices, and CEECs demonstrate
wide-ranging differences in these areas.
3 The setting across CEECs - social partners and their relationships
3.1 Trade unions
During the communist period, trade union leaders were usually part of the party
apparatus and their main role was to ensure that members obeyed the party's rule
and fulfilled the plan, the so-called 'transmission belt' function (Hethy 1991).
Additionally, unions administrated in-company social benefits and dealt with
individual issues arising at the workplace. Unions generally did not truly
negotiate collective agreements, as they were not independent and did not have
the right to strike. However, their independence from the Communist Party varied
between being totally subordinated in Romania and being an independent union
movement (Solidarity) in Poland during the 1980s (Pravda/Ruble 1986). Overall,
the unions' freedom to negotiate with the party-state and the top managers was
very limited across CEECs during the communist regime.
Since 1989, unions in the CEECs have changed their role and structure, but there
is also continuity (Draus 2001; Deppe/Tatur 1997). Despite differences across
CEECs, there are a number of common trends in the development of trade unions
after 1989. In all countries, trade unions have emerged, either by restructuring
former communist unions or by being set up as new (rival) organisations to the
former ones (Draus 2001: 11). Generally, the old reformed unions have emerged as
the dominant players, as they have retained most of the assets of their
predecessors, including a large number of members (Draus 2001: 11). Initially,
there was strong rivalry between the two types of unions, which has resulted in
a pluralist union structure at all levels, particularly in Hungary and Romania (see
Table 1 for confederations; Aro/Repo 1997). As Table 1 indicates, in countries
that have adopted a gradual approach to the economic restructuring, such as
Slovakia and Romania, trade union density is currently between 35% and 40%,
while in the others it is even lower. The economic restructuring, rising
unemployment and the general climate-favouring market mechanism resulted in a
sharp decline in trade union membership during the 1990s.
Organisational characteristics of the social
partners in CEECs (latest available data)
Trade union density in per cent
Number of the most important organisations
Employees in firms that are members of an
employers' association in per cent
8 (2 since 2004)
Source: European Commission (2004); Funk/Lech (2004: 2);
Preda (2004); Janssen/Galgoczi (2004).
Several studies indicate that trade unions have had a weak influence in the
tripartite bodies and on the transformation policy in all CEECs, although they
continue to have a strong political role (Lado/Vaughan-Whitehead 2003; Crowley/Ost
2001; Draus 2001: 16; Pollert 1999). Their influence in the tripartite bodies
also appears to depend on the degree of macroeconomic transformation, as
governments still need union support for reforms in countries where the
restructuring process is less advanced (Thirkell/Vickerstaff 2002). Nevertheless,
unions have had an important role in establishing the new labour legislation
throughout CEECs (Draus 2001). As unions have maintained their company-based
structure, several unions may be present in an enterprise (Pollert 1999; Aro/Repo
1997). Company unions are not always independent of the management (Stanojevic/Gradev
2003: 45), resulting in a weak effectiveness of company collective bargaining (Aro/Repo
1997). After testing several hypotheses, Crowley (2004) indicates that
institutional and ideological legacies of the communist period best explain the
overall weakness of labour in Eastern Europe.
3.2 Employers' associations
In a centrally planned economy there are no employers' associations per se.
During the communist period, the state-owned enterprises were associated in
chambers of commerce and industry for commercial purposes, but they did not deal
with employment issues and they were subordinated to the party-state (Hethy
1991). Hence, employers' associations are a new institution developed in CEECs
Although there are major differences between employers' associations, evidence
indicates a weak institutional development across CEECs. Draus (2001: 5) argues
that employers' associations in CEECs are artificial players created with
substantial assistance from the state to put in place tripartite structures in
order to meet immediate political interests. Other studies also reveal that
employers' associations are primarily interest groups (representing initially
state enterprises) dealing with economic policy and providing services for
individual members (e.g. legal assistance), but they are frequently not
authorised by their members to conclude collective agreements on their behalf (Mihes/Casale
1999; Toth 1997: 340; Lecher/Optenhogel 1995). Moreover, there is often rivalry
between employers' organisations, which has led to a fragmented structure (Table
1). The weak development of employers' associations is usually explained in
terms of heterogeneity of the new (private) employers, lack of experience, and
individual employers' strength at company level (Draus 2001; Martin 1999; Toth
1997; Lecher and Optenhogel 1995). In the unstable and sometimes ambiguous
transition context, private employers frequently prefer to act through
individual political contacts and single-employer bargaining at company level
(Draus 2001: 8; Martin 1999; Aro/Repo 1997). Therefore, empirical studies
throughout CEECs reveal that employers' organisations are generally not well
3.3 Conflict and/or co-operation?
Since the beginning of the transition period, tripartism has been the strategic
choice of the social partners throughout CEECs for pragmatic reasons (Thirkell/Vickerstaff
2002; Hethy 2001). First, tripartism is a source of mutual legitimisation for
the parties involved, which have been facing deficits of support (Hethy 2001:
10). Secondly, tripartism is a means of securing legitimacy for political and
economic transformation and of maintaining social peace in a context of economic
recession (Hethy 2001: 10; Martin 1999: 379). Thirdly, there is a long tradition
in CEECs of governments dealing with trade unions at national level and relying
on unions to implement their policies (Vidinova 1997: 86). Finally,
international organisations, such as the International Labour Organisation and
the EU, also recommend tripartism (Hethy 2001: 11). For unions, the short-term
choice to share the burden of the transformation is outweighed by the privilege
of being a reform maker and ensuring restructuring without major losses in
employees' rights over the long term (Vidinova 1997). Nevertheless, across
Eastern Europe, tripartism is primarily an action initiated by the state seeking
the support of trade unions for its reform.
Tripartite forums have been designed to deal with shared interests as well as
adversarial issues. According to Hethy (2001: 14), the main functions of the
tripartite bodies in the region have been as follows:
(a) consultation over the establishment of new labour institutions and the
(b) national-level wage negotiation;
(c) participation in public policy formulation with regard to income, wage,
employment and social policies;
(d) settlement of national industrial conflicts.
Of these, only (a) has dealt primarily with shared interests, as all three
partners have been committed (at least initially) to establishing a legal
framework that facilitates the development of social dialogue and voluntary
collective bargaining (Lado 2002), while (b), (c) and (d) have been
predominantly adversarial issues. As Table 2 shows, collective bargaining and
social partnership have been operating simultaneously across CEECs. Thus, the
creation of tripartite bodies has been based on a long-term commitment between
the parties, but it has been accepted that arenas for co-operation and
adversarial activities would be set up.
During the communist period, collective bargaining (if it existed) was not an
essential mechanism for defining the terms and conditions of employment because
it was generally the state which determined wages directly, by setting for
instance wage scales and wage funds for enterprises, or indirectly, by drafting
regulations based on the central plan (Hethy 1991: 135). Moreover, there were
neither independent unions nor autonomous employers. In countries such as
Hungary and Poland (where there was a degree of decentralisation) limited
collective bargaining at company level had taken place (Hethy 1991:130-131;
Pravda/Ruble 1986), but in Romania there was no tradition of voluntary
collective bargaining. By and large, there was no real collective bargaining
during the communist period in CEECs.
Table 2 Collective
bargaining and social pacts in CEECs (latest available data)
Wage bargaining levels
% of employees covered by collective agreement
The most recent tripartite social
(wage deal that recommends 6% wage increase in
Negotiations in 2004 failed due to the lack of
agreement on minimum wage increase.
Negotiations in 2003 failed due to mistrust
between negotiating parties.
No agreement on minimum wage
increase in 2005.
No agreement reached in 2003-2004. Trade unions
did not agree with policies on cuts in welfare provision, reform of
the pension system and minimum wage.
Source: Toth/Neumann (2004); Schulten (2005)
Legend: *** = dominant level; **
= important level, * = of relatively minor importance.
As Table 2 shows, collective bargaining is generally decentralised and its
coverage is far lower in CEECs than in Western Europe (Schulten 2005). The
coverage of collective agreements varies in CEECs: from below 20% in Latvia and
Lithuania to almost 100% in Slovenia. There are no data available for Romania,
but it is likely to be closer to Slovakia since union density is similar and, in
companies where there are unions, a collective agreement is usually concluded.
The low coverage in CEECs is associated with the decentralised structure of
collective bargaining. The weak development of sectoral collective bargaining is
generally explained in terms of inherited institutional legacies (e.g. strong
legal intervention, trade unions based within companies and a lack of autonomy
of the social actors) and employers' preference for single-employer bargaining (Lado
2002: 6; Draus 2001: 24-25; Toth 1997). Therefore, in the unstable economic and
structural environment characterised for many years by economic recession, the
growth of the informal sector, and a rise in unemployment, collective bargaining
is not well consolidated.
4 Conflict and co-operation in practice in Romania
With the collapse of the communist regime in 1989, unions achieved the freedom
to negotiate with employers. Evidence suggests that collective bargaining and
social partnership are taking place at three main levels. A preliminary synopsis
of current and prospective co-operation and conflict at various levels is
presented in Table 3. Unlike in the EU member states, the unions in Romania have
virtually no relations with employers at international level. This is likely to
change if Romania joins the EU in 2007. Trade unions' strategic choices after
1989 and the prospects of co-operation and/or conflict at the national, sectoral
and company levels are examined in detail in the next section, based primarily
on interview data.
Conflict and co-operation in practice in Romania
bargaining/CB (predominant conflict)
approach (predominant co-operation)
European Works Councils (co-operation)
|First stage of
CB (transsectoral agreement): bargaining role of (the five
representative) union confederations, though this results in a minimal
framework for lower levels of negotiation.
Historical legacy of authoritarian
Incipient co-operation in the tripartite
Economic and Social Council (e.g. co-determination on labour legislation,
consultation on social policy and EU enlargement).
Less scope for co-operation once labour
legislation beomes more stable.
Increased pressure for decentralisation at
the company and sector levels.
||Second stage of
CB (industry agreement):
bargaining role of union federations,
but still a minimal framework for the company agreement (e.g. in the
|Incipient forms of
co-operation in the sectoral tripartite commissions (e.g. information
and consultation on sectoral issues, such as bad weather funds in the
increased co-operation with the sectoral tripartite bodies consolidated.
|Third stage of CB
(company agreement): the last stage of CB at which the actual terms and
conditions of employment, including wages, are established. Most large
companies have a collective agreement.
Co-determination where there are shared interests (e.g. privatisation,
subsidies from the state in the public sector, training and health and
Union representation on consultative bodies, including company boards.
|Both conflict and
Evidence of union preference for co-operation, but also
indication and tradition of unions being co-opted by the management.
4.1 Strong state involvement at the national level
In Romania, the first tripartite institution was created in 1993 as part of a
Phare assistance programme (Mihes/Casale 1999: 277). The Tripartite Secretariat
for Social Dialogue was established to provide support in setting up labour
institutions and a legal framework that would facilitate the dialogue between
unions, employers' associations and the government. This institution was
dissolved in 1997, when the direct funding from Phare ceased. Nevertheless, a
new Economic and Social Council was created by the government in 1997 (Law no.
141/1997). This Council had an advisory role in developing economic and social
policy. It endorsed draft legislation mainly on wages, employees' rights and
duties, unemployment, social insurance and pensions. A new law (Law no 58/2003)
extended its role (enabling it, for instance, to make proposals for monetary,
financial and income policies) and made it more inclusive, by allowing
representatives of professional and non-governmental organisations to be part of
it. Despite fairly extensive legal rights, its General Secretary revealed that
its effectiveness in representing employees' interests was reduced. He indicated
that employers' associations were still very weak and dominated by the state
representatives. As a result, the state could often pursue its initial proposals,
assuming a double role, as both government and employer in the tripartite forum.
The commitment to partnership has been reinforced in recent years. A tripartite
National Agency for Employment and Professional Training was set up in 1999. Its
main scope is to deliver training services for job seekers, to assist with job
recruitment and to manage the unemployment fund (Mihes/Casale 1999: 281).
Additionally, the first social pact (Acord Social) was signed in 2001 between
trade unions, employers' associations and the newly elected government. Trade
unions agreed to refrain from industrial action for one year in exchange for the
government's commitment to take action to increase the living standards of the
population and to create new jobs (Martin/Cristescu-Martin 2002: 529). As the
government was unable to fulfil these promises, the second largest union
confederation, the Cartel Alfa, withdrew from the agreement after six months.
The social pact also included provisions to establish a tripartite forum for
every industrial sector, which should meet whenever a party required a debate on
issues specific to that particular sector. The social pact was renewed in 2002,
but only three out of the five largest union confederations signed it (Rusu
2002: 29). Negotiations over a 2003 social agreement ended in failure. A
tripartite 'social stability pact' for 2004 was concluded, but it was signed
only by two trade union confederations. The other three unions rejected the
social pact because they were dissatisfied with the level of minimum wage. Also,
they considered that this social pact was just a way for the government to make
political capital in an election year. Thus, a partnership approach has been
developing on the national arena, but the social partners are just learning to
co-operate with each other.
Romanian trade unions have also used the national arena for adversarial
activities. As indicated in Table 3, the first step of collective bargaining
process takes place at the national level. The most recent national collective
agreement was concluded in December 2004, and it is valid for 2005-7006 (Preda
2005a). Despite the fact that the agreement establishes only a minimal framework
for lower levels of collective bargaining, the national negotiations have
sometimes led to industrial action. At the beginning of the 1990s, strikes were
quite frequent and mainly related to wages and job security (Kideckel 2001:
103). Apart from 'bread and butter' issues, Romanian trade unions, particularly
mining organisations, have also been involved in political strikes. Although
strikes have generally started with demands for wage increases, the miners
strike and march on Bucharest in September 1991, for example, led directly to
the fall of the first democratically elected government (Martin/Cristescu-Martin
1999: 399). Additionally, under union pressure, the government has favoured
particular industries. For instance, the Government Ordinance 22/1997 entitled
miners that had worked for more than 15 years to receive a severance payment
worth 20 monthly wages, while workers in the other sectors were entitled to less
than 12 months wages (Kideckel 2001: 107). Nevertheless, wage increases achieved
by unions have regularly been followed by a higher increase in inflation (Rusu
2002; Pert/Vasile 1995). Therefore, industrial actions have resulted in some
successes, but these have generally been short-lived solutions.
The new government elected in Romania in 2004 intends to change the Labour Code
of 2003, to allow more flexibility for employers and less rights for employees.
Trade unions are fighting against these changes, but the issue is not settled
yet (in June 2005). In spite of the major constrains during the shift from
centrally planned economies to market-based economies, the developments in
Romania show that the transformation process has provided unions with some
opportunities allowing them to influence the creation of labour institutions.
Nonetheless, the unions' achievements have not resulted in a positive outcome
for labour where it counts the most. Overall, unions have failed to preserve or
increase labour's purchasing power and employees' jobs (Kideckel 2001: 97).
Additionally, the disrespect of employers and the government for the labour laws
and the expansion of black market labour made the success of the unions very
limited at operational level (interviewees; see also Clarke/Cremers/Janssen
2003). Romanian unions have been among the most militant in Eastern Europe (Crowley
2004: 404; Martin 1999), but they have become more committed to partnership than
to adversarial relations as the developments at the sectoral and the company
4.2 (Under)Developments at the sectoral level
Formal arenas for co-operation and conflict have been established at the
sectoral level, but there is a weak development of the relationship between the
social partners. The legislation provides for the establishment of Consultative
Commissions of Social Dialogue at ministries and at the prefects' offices. These
are tripartite consultative bodies consisting of representatives of the
concerned ministry (or local authority), trade union federations and employers'
associations from a particular industry (or area). In these forums, social
partners are consulted on draft laws concerning the specific industry and
enterprise restructuring measures, and they can bring up any claims and
proposals to be considered (Mihes/Casale 1999: 281). Additionally, other
incipient forms of tripartite bodies have emerged, such as the Social House of
Builders in the construction industry. Its main functions are to manage the bad
weather funds and to deal with training issues in the construction industry.
Therefore, arenas for co-operation at the sectoral level have been established
in Romania which, institutionally, are more solid than in other CEECs
However, evidence indicates a low effectiveness of the tripartite forums in
practice, primarily due to a very weak commitment on the part of employers. For
instance, in the case of the chemical industry, where a sectoral employers'
association named the Fepachim has been operating since the 1990s, an official
revealed that it is very difficult to achieve a common position of members. A
further illustration of the slight importance attached by members to the
employers' association is the fact that the staff of the Fepachim consisted of
four officials, only one of whom (the vice-president) was working full time for
the organisation. Additionally, the association's headquarters consist of a room
in the same state-owned enterprise as that of the largest union federation. The
Fepachim illustrates a fairly typical case of the degree of (under)development
of employers' associations in Romania. The slow development of the private
sector has made the Romanian employers' associations among the weakest in
Eastern Europe. Thus, it has been very difficult for unions to develop
collective bargaining and/or social partnership at the sectoral level if they
have a very weak partner on the employers' side.
The sectoral level represents the second stage of collective bargaining (Table
3). Unlike Western Europe, the sectoral collective bargaining in Romania only
provides a minimal framework for the particular sector. It deals with a wide
range of issues, from wages to training and health and safety standards. The
provisions of the sectoral agreements cannot be set below those established by
the national collective agreement and the Labour Code. As in other CEECs, the
main reasons for collective disputes at the sectoral level have been pay levels,
delays in the payment of wages in the public sector and the restructuring of
basic industries such as mining, railways and steel (trade union officials
interviewed; see also Martin/Cristescu-Martin 1999: 396).
Although Romanian unions have generally been able to mobilise their members in
the public sectors, the number of strikes has declined. The trade union
officials interviewed revealed that during the 1990s they learned that dialogue
with employers' representatives on long-term interests usually resulted in a
better outcome for their members than adversarial relations focused on pay
increases. Respondents revealed that the increase of wages as a result of a
strike at sectoral level was generally followed by an even higher rise in
inflation. Furthermore, the prolonged economic recession and the reduction of
the public sector due to privatisation, alongside increasing unemployment and a
huge decline in trade union membership, resulted in unfavourable conditions for
unions. Thus, social partnership and collective bargaining at the sectoral level
are still fragile in Romania, as they are in most CEECs (Kohl/Platzer 2003; Lado/Vaughan-Whitehead
2003). The unions' strategic choice of a decentralised internal structure has
not supported the development of sectoral and regional institutions in Eastern
Europe, as will be shown in the next section.
4.3 Limited strategic choices for unions at the company level
As in other Eastern European countries, the strategic choice of trade unions in
Romania has been to preserve their company-based membership and the
institutional monopoly that existed before 1989. Trade unions and employers have
been generally against the introduction of a dual channel of representation
(Kohl/Platzer 2003). However, the EU regulations on minimum information and
consultation rights made the introduction of works council structures necessary
in the candidate countries. The solutions adopted by different countries varied.
In Romania, similar to the Czech Republic, a single channel of representation
remained in place, but since 2003 employees in companies with at least 20
employees who have no union representation have had the right to elect
representatives for up to two years. The elected representatives have similar
legal rights of information, consultation and collective bargaining as trade
unions. Therefore, in countries such as Romania, trade unions and employees'
representatives in non-unionised workplaces have formal rights for dealing with
shared and conflicting interests at the company level.
The reform process has created opportunities for the trade unions, but also a
large number of constraints. The main opportunities for unions at the company
level indicated by our interviewees are as follows:
||The restructuring and privatisation processes have given unions the chance to
participate in the decision-making process (e.g. Petromidia case study).
||The massive reduction of personnel has represented an incentive for employees
in large companies to join unions in order to protect them from unfair dismissal
and to obtain a reasonable severance package if they are made redundant.
||In the context of low living standards, employees from very large companies
have revealed that they joined unions to obtain financial help (e.g. loans with
a low interest rate, reimbursement of expenses in the case of medical problems
These opportunities have been grasped particularly by autonomous trade unions
operating in large companies.
However, there have been a large number of constraints that have affected
company unions according to the respondents, such as:
||The rationalisation process, which has resulted in a massive reduction of
personnel, many of whom have been trade union members.
||The fact that many companies were previously making losses, which has resulted
in a prolonged economic recession and no benefits to share between employer and
||The emergence of new small and medium-sized companies, where employers
generally have not accepted unions.
||Additionally, the strategic choice of the unions to operate within the
companies has often resulted in the co-optation of unions by the management.
These opportunities and constrains have affected unions to different degrees
throughout Eastern Europe (Lado/Vaughan-Whitehead 2003; Stanojevic/Gradev,
2003). Since the marketisation process in Romania is less advanced than in
countries such as Poland and Hungary, trade union density is still higher than
the Eastern European average (Stanojevic/Gradev, 2003: 38). However, the
restructuring and privatisation of the loss-making companies that are still
subsidised by the state is likely to lead to further decline in trade union
membership in the near future.
Research reveals that the prevalence of conflict and co-operation varies across
companies. Our interviews and other evidence indicates that, after 2000,
industrial conflict prevailed at the company level only when employees' jobs
were at stake or when employees did not receive their agreed wages or other
benefits (Martin/Cristescu-Martin 2002). Nevertheless, in May 2005, an
industrial dispute erupted at Coca Cola Romania after collective bargaining
negotiations on pay increases failed. The main claim of employees was a 20% pay
rise, while the management was not willing to provide more than a 10% increase,
which was less than the annual inflation (Preda 2005b). Initially, eight company
union activists went on four days hunger strike. They aimed to pressure the
management while trying to minimise the negative impact on the operation of the
company. As no agreement has been reached to date (June 2005), it appears likely
that employees will go on strike. Since trade unions membership is company-based,
unions are in a very delicate position. It is vital for them to prevent the
closure of their company as their survival is at risk. In the case of the mining
sector and several large companies, Romanian unions have won few clashes over
government decisions to close down loss-making companies (Kideckel 2001) as the
Petromidia case study demonstrates.
Petromia illustrates the dynamics of conflict and co-operation in a large
company with a strong new union (over 90 % union density) set up by a group of
blue-collar workers in 1990. The relationship between the newly established
trade union and the management team began with an adversarial relationship in
1990. The elected trade union leaders required employees to endorse managers
through secret ballot (interviewees). Employees validated all the management
team, apart from the general manager, who left the company following the 'low trust' vote. Subsequently, there was co-operation between the management team
and the company trade union, and decisions regarding the labour force were taken
jointly (interviewees). A union official revealed that union representatives
have since had a consultative role and are invited to all meetings of the
management board regarding production. They are also consulted over redundancies,
training and investment (interviewees). The partnership approach between the
union and management was confirmed in 1997, when the government decided that
Petromidia should be closed down as a result of making huge losses. Trade union
officials initiated a meeting with the Prime Minister Ciorbea, where, together
with the Chief Executive, they convinced the government that it was state
intervention in the price of fuel and the exchange rate (which was kept very low)
that made the company non-profitable (respondent participant in the meeting).
Additionally, the union was involved in the privatisation process. The union
negotiated with the buyer the level of investment and secured the jobs of the
3577 employees for five years. According to a senior manager, 'at Petromidia
there was a trade union which had a company attached, not a company with a trade
union. In the privatisation contract, union representatives achieved a clause to
keep the number of jobs for five years and to retain certain managerial
prerogatives, such as to be part of a mixed commission which takes any
employment decision. The contract also stipulated that the trade union should be
allowed to participate in individual bargaining and to be informed about
individual wages, which are supposed to be confidential.' The case of Petromidia
indicates that unions can be proactive and shape their own future if they have
the capacity to mobilise their members and if union leaders have the skills and
willingness to use both conflict and co-operation in their relationships with
employers. This case demostrates that unions can even be in the driving seat,
but this is atypical of Romania.
The Petromidia case study also shows a more common tendency of maintaining a
coalition between company trade unions and the management when the survival of
the company is at risk, as here both parties were interested in keeping the
company operating for their own survival. In the public sector, unions and the
management still have a shared interest to obtain as many resources from the
state as possible (e.g. subsidies, exemption for paying certain taxes, etc.).
However, findings indicate that genuine partnership is possible only in
companies where the employer has financial resources and displays a willingness
to enter into a partnership arrangement. Although partnership based on mutual
gains for unions and employers appears to be rarely found in Romania, certain
multinational companies (e.g. Xerox) and Petromidia have successfully adopted it
(interviewees). Summing up, findings suggest that collective bargaining and
social partnership have developed together although, in many companies, trade
unions have rather limited choices. Evidence indicates that a partnership
approach is possible even in the precarious transition context of Romania, but
it requires strong partners that have the ability to deal with both conflict and
5 Implications for trade unions in CEECs
Since the 1980s unions around the world have had to adapt to a fairly hostile
environment, in which the freedom of market forces rather than social values has
been promoted. Whilst in developed countries unions have had to adjust and
redefine their scope and strategies, in Eastern Europe independent unions have
had to be established in this context. Despite an initial high trade union
density in 2002, the weighed average in the eight Eastern European countries
that joined the EU in 2004 was 21.1%, compared to the 30.4% weighted EU average
(Stanojevic/Gradev 2003: 38). In Romania, trade union density is around 35%, but
unions are not necessarily independent of management (interviewees), which is a
precondition for unions exercising strategic choices. Using the model developed
by Huzzard (2004), this paper will now examine the prospects and implications of
unions' strategic decisions taken during the transition from a centrally planned
economy to a market-based economy.
Huzzard (2004) argues that unions generally have strategic choices on four
different levels. The first level, also termed first-order choices, refers to
key decisions on union missions, ideology and basic identity. In Eastern Europe,
the first-order choices of unions were primarily affected by the labour
relations existing in 1989, economic context and the social expectation of union
members (Clarke/Cremers/Janssen 2003; Lado/Vaughan-Whitehead 2003; Stanojevic/Gradev
2003; Rusu 2002). As trade unions were the largest mass organisation and since,
in countries such as Poland, unions (e.g. Solidarity) were the initiators of the
politico-economic change, they were expected to support the change towards a
more efficient economic system that would (hopefully) improve workers'
conditions in the long term. In countries such as Romania, where unions were not
involved in political change, they could be easily labelled as relics of the
communist regime (Martin 1999; Pollert 1999). In this context, unions acted by
and large as social movements and they supported the transformation process (prevalent
partnership approach), although restructuring led to massive decline in trade
In all CEECs, unions were initially involved in the political and economic
transformation, albeit to various degrees, with the extreme case of Solidarity
that led a coalition government in Poland (Thirkell/Vickerstaff 2002). Scholars
found puzzling that the first Solidarity-led government introduced a very
liberal programme of economic shock therapy in Poland, instead of a
worker-friendly capitalism (Ost/Weinstein 1999). Evidence appears to confirm
Lipset's (1983) hypothesis that the more trade unions participate in the
political and economic transformation, the less radical their initial and
subsequent ideologies are. However, the fact that communist (radical) unions had
little legitimacy after the demise of the communist regimes made it almost
impossible for unions to choose a radical ideology. It would be interesting to
test the validity of Lipset's (1983) hypothesis against further comparative
research across Eastern Europe.
The first-order strategic choices shape the second-order choices over the scope
of union activities and which relationships unions should enter into (Huzzard
2004). The choice to support the transformation process in CEECs gave them the
opportunity to be involved in shaping the emerging industrial relations system,
to participate in social policy formulation and, sometimes even, to help shape
the economic policies themselves (Clarke/Cremers/Janssen 2003; Kohl/Platzer
2003; Lado/Vaughan-Whitehead 2003). Additionally, the process of accession to
the EU, particularly the requirements regarding the transposition of the social
chapter into the national legal framework, represented an opportunity for unions
to be involved in policy formulation (Kohl/Platzer 2003; Lado/Vaughan-Whitehead
2003; Rusu 2002). Although the unions' role has diminished with the progress in
economic restructuring and the finalisation of the social chapter transposition
into national legislation (Lado/Vaughan-Whitehead 2003), there are new
opportunities for union participation, such as in the development of the
Economic and Monetary Union (Meardi 2004).
Currently, Romanian unions are stronger and more involved in the tripartite
bodies at the national level than unions in countries where reforms are more
advanced, such as Hungary and Poland. Evidence suggests that Romanian unions
have used the mobilisation more than unions in other CEECs to achieve a
relatively supportive legislative basis for the defence of union recognition and
collective bargaining (Clarke/Cremers/Janssen 2003; Kideckel 2001; Martin 1999).
Nevertheless, as in other CEECs, most union activities are related to the
transition process. Thus, Romanian unions would have to redefine and anticipate
the needs of their members in order to (at least) preserve their influence in
the decision-making process. Also, an obvious choice would be to attempt to
recruit members in the growing number of small and medium-sized companies, where
there is usually no union representation. However, unions' second-order choices
are constrained by the third and fourth-order choices.
The third-order strategic choices refer to key choices on ways of relating to
employers, members, other unions and civil society (Huzzard 2004). Evidence
suggests that since 1989 Romanian trade unions, similar to those from the other
CEECs, have faced problems of survival and legitimisation, and they have focused
more on the political field than on workplace representation (Martin 1999;
Pollert 1999). Unions have participated in the national public policy
formulation via tripartite bodies or individual positions in the government (Rusu
2002). Their political participation has only partially solved the problem of
survival and it has not solved the problems of internal legitimisation.
Therefore, unions have had some influence in shaping the new labour legislation,
but the economic recession, the massive reduction in personnel and the unions'
inherited legacies have resulted in a decentralised and fragmented union
movement, with weak influence at the company level.
Throughout Eastern Europe, unions generally have not managed to preserve
labour's purchasing power and employees' jobs (Galgoczi/Mermet 2003). Despite a
long-term commitment to partnership, real wages have lagged substantially behind
labour productivity in most countries (Galgoczi/Mermet 2003: 50). Nevertheless,
the Petromidia case study indicates that genuine partnership with a positive
outcome for both labour and capital may be achieved even in the uncertain
transition context. Therefore, evidence suggests that elements of both
collective bargaining and social partnership have developed in tandem during the
transition period in Eastern Europe, but their effectiveness for labour, in
terms of maintaining at least the quality of working life, has usually been
reduced (Clarke/Cremers/Janssen 2003; Kohl/Platzer 2003; Lado/Vaughan-Whitehead
2003). This is primarily a result of a weak development of the social partners
along with a politico-economic context that has favoured the neo-liberal
The case of Romania indicates that fourth-order strategic choices, which relate
to unions' internal structure (Huzzard 2004), have also affected the second and
third-order choices of unions. A precondition for unions to have strategic
choices is to be established as autonomous organisations from the management.
The choice of unions to have a company-based membership has resulted in them not
having any representation in the newly established companies and enjoying only
debatable independence from the company management in many companies (interviews;
Stanojevic/Gradev 2003). Furthermore, there is rivalry between the old reformed
unions and the newly established organisations (Pollert 1999). Nevertheless, an
attempt by union federations to establish an individual membership base may
result in a sharp decline in union membership, since there is no such tradition
in Eastern Europe. Also, trade union officials from the construction and
chemical federations in Romania have revealed that company unions oppose the
establishment of such structures. The weak establishment of the intermediary
structures is common across Eastern Europe, not least because the company unions
have had the power to choose to remain the most important layer in the union
hierarchies (Clarke/Cremers/Janssen 2003; Kohl/Platzer 2003; Lado/Vaughan-Whitehead
In order to become a social partner that has strategic choices in its relations
with employers, unions need to be well established (in terms of representation,
internal coherence and legitimacy) in independent organisations at all levels.
The Petromidia case study revealed that both the partnership approach and
collective bargaining require strong and autonomous partners. Research findings
suggest that trade unions in Eastern Europe are still learning how to achieve
resources that will allow them to choose between co-operation and conflict with
the employers. Although this paper emphasises the common opportunities and
constraints faced by unions in Eastern Europe based on the Romanian case study,
it is acknowledged that there is great variation in the industrial relations
systems across and within CEECs (Kohl/Platzer 2003; Trif 2004). The comparison
of empirical evidence from Romania with other Eastern European countries
reflects on the stage of Romanian transformation and also points to a possible
wider applicability of the theoretical framework employed for the study.
The shift from centrally planned economies to market economic models has
presented trade unions in CEECs with crucial strategic choices in relation to
their roles as industrial relations actors. This paper has focused on the
strategic choices of trade unions in Romania during such a period of intense
economic transformation; in particular it has assessed the trade union
propensities for relationships of either conflict or co-operation with employers.
Adversarial and partnership scenarios between trade unions and employers take
place at national, sectoral and workplace levels. In the national arena the
social partners are mostly 'out of step', though some co-operation takes place
through institutional arrangements such as the social pact. Union gains have
been modest, as the central issues of pay and employment have been dominated by
the state and government failure to uphold labour codes. Social partnership at
the national level has been characterised by a distinct lack of a stable
At sectoral level, the establishment of a negotiation arena has given the social
partners the opportunity to practise the intricacies of conflict and
co-operation. As has been argued, formal frameworks such as the Consultative
Commissions of Social Dialogue have provided a forum where trade union
federations, employers' associations and government representation can engage in
dialogue on a range of pertinent issues. Although Romania has more advanced
arrangements in this respect than other CEECs, research has revealed that the
tripartite forums have a low effectiveness. A central problem is the weakness of
the employers' associations in Romania; trade unions are faced with a social
partner incapable of deciding on what kind of relationships they wish to engage
in. Collective bargaining at sectoral level provides an opportunity for the
trade unions to bargain collectively, but conflicts, particularly in the public
sector, have decreased due to the poor economic performance of Romania and the
decline of union membership. Research findings show that strategic choice at
this level, by the central actors in the trade unions, has been changing from
overt strikes towards co-operation with employers.
However, the major strategic choice by the trade unions in Romania and the CEECs
has been to retain their company-based membership to support their traditional
institutional monopoly. The configuration of collective bargaining and
partnership at company level is complex and varied because of reform measures
which, on the one hand, have allowed participation in decision-making processes
by the unions (the Petromidia case study illustrating this during the
restructuring and privatisation programme of the company). On the other hand,
rationalisation processes leading to redundancies are clearly adversarial issues.
Formal participation rights enshrined in Labour Codes are on present evidence no
guarantee that effective partnership rules will evolve. The general conclusion
is that trade unions have limited strategic choices at company level, but there
is a spectrum of choices determined partly by the stage of transformation of
individual Eastern European countries and partly by the structure and nature of
companies. Petromidia, for example, had developed autonomous trade unions that
were able to genuinely choose between conflict and co-operation with the
employer. However, the case study company was atypical of Romanian experience
and the social partners mostly enjoyed a workplace partnership because their
common aim was to sustain the economic viability of the company during the
difficult transition period.
Social partnership in the western pluralist and democratic sense is a new
phenomenon in Eastern Europe; it is easily masked by the pre-1989 contours of
communist co-operation. The trade unions' initial strategic choice was to
support the transformation of the centrally planned economy into a market-based
economy, but the unions were confronted, and still are, with the vestiges of the
communist legacies. Their involvement in tripartite bodies at national level is
a determined attempt to influence and create an acceptable social partnership.
The unions have had a measure of success in shaping the post-1989 labour
legislation, but the legitimisation of the unions remains a significant issue.
The evidence from Romania is that unions are still in the process of acquiring
legitimacy, of having to resolve internal tensions, of becoming autonomous
representative organisations and of convincing employers of the value of the
social partnership model. Despite major structural and institutional constraints,
this paper illustrates that the transformation process has been continually
shaped by the capability of unions to apply selected strategic choices. The
overall picture in Eastern Europe suggests that the actors in the industrial
relations system are still learning how to achieve a social partnership model
with mutual gains for labour and capital.
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There are several studies that examine the role of
trade unions in social dialogue, but they focus on the national level (Iankova/Turner
2004; Meardi 2004).
The study is based on 107 semi-structured interviews
conducted in 2000-2001 in Romania with trade union officials (six respondents),
employers' association officials (five respondents) and state representatives (five
respondents), plus company union officials, shop stewards, human resource
managers and employees (91 respondents) from 20 companies from different
industrial sectors. Among the companies investigated, there is a case study
approach to industrial relations in a recently privatised (large) petrochemical
company (Petromidia), which has developed a workplace partnership.
This refers to dialogue and consultation between
representatives of government, trade union confederations and employers'
associations, principally relating to labour issues (Casale 1997).
The legislation requires that provisions of the national
agreement should apply to all companies.
A survey in four large companies indicates that 8.1 % of
their labour force were not union members before 1989 whereas by 2001 the figure
had fallen to 4.5% (Trif 2004: 210).
These companies survive by being subsidised by the state.
However, if the state tries to withdraw these subsidies, there is usually a
coalition between management and trade unions to preserve the subsidies (e.g.
National trade union officials indicated that more than
half of union activists at the company level are not independent from the
management (see details in Trif 2004: 217- 219).
Copyright © 2005 Aurora Trif
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