International actors and trade unions during postsocialism and after: the case of Romania

Published date04 June 2018
Pages692-708
Date04 June 2018
DOIhttps://doi.org/10.1108/ER-01-2017-0017
AuthorDragoș Adăscăliței,Ștefan Guga
Subject MatterHR & organizational behaviour,Industrial/labour relations,Employment law
International actors and trade
unions during postsocialism and
after: the case of Romania
DragoșAdăscăliței
Management School, University of Sheffield, Sheffield, UK, and
Ștefan Guga
Department of Sociology and Social Anthropology,
Central European University, Budapest, Hungary
Abstract
Purpose The purpose of this paper is to explain why, in spite having a relatively powerful labour
movement at the start of the economic transformation, Romania ended up with a highly deregulated system
of industrial relations in the aftermath of the global economic crisis of 2009 and with trade unions which seem
incapable to defend their interests.
Design/methodology/approach The authors trace the changing role that Romanian trade unions had in
national policy making and show that the beginning of 2000s represents a critical point for the power loss
sustained by organised labour.
Findings The authors argue that a key element for explaining labours decline is the growing pressure
exercised by various international organisations for the adoption of deregulatory labour market reforms.
While during the 1990s this pressure was circumvented by successive governments which peddled back
and forth between union wage pressure and fiscal austerity measures, beginning with 2000s, EU accession
conditionalities coupled with IMF and World Bank policy recommendations enabled the international
deregulation agenda to be implemented without much opposition.
Originality/value The paper brings new evidence on the impact of international actors on the Romanian
collective bargaining and labour market institutions.
Keywords Deregulation, International organizations, Trade unions, World Bank, Crisis, Romania, IMF,
Postsocialism
Paper type Research paper
Introduction
A quick look over the literature on industrial relations in Romania over the past two and a
half decades leaves the reader with a puzzle: although the country has had one of the most
protest-prone postsocialist labour movements in Central and Eastern Europe (CEE), it
currently has one of the most deregulated labour markets in the EU coupled with a façade
system of collective bargaining that minimises the role of labour in national policy making.
The puzzle becomes even more interesting if we consider that as late as 2005 Romanian
trade unions could fight and win over their right to sign national collective bargaining
agreements and limit the use of temporary employment contracts. Fast forward to 2011 and
the situation is entirely different: unions failed to oppose significant labour market reforms
introducing a very flexiblesystem of employment relations and severely curtailing any
influence unions could exert beyond the enterprise level. What explains these recent losses,
especially in light of unionsostensible successes in the mid-2000s?
To answer this question, this paper traces the development of industrial relations in
Romania since the early 1990s and shows that labour market reform outcomes were
primarily shaped both by union demands and by international actors, whose influence over
the trajectory of the countrys labour market reforms has been constantly growing since
2000. We build on the existing literature, which assigns a central role in explaining the
trajectory of CEE industrial relations to the growing capacity of the state to control and
Employee Relations
Vol. 40 No. 4, 2018
pp. 692-708
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-01-2017-0017
Received 23 January 2017
Revised 27 May 2017
Accepted 23 June 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
692
ER
40,4
weaken organised labour (Avdagic, 2005; Varga and Freyberg-Inan, 2015) or to unions
organisational traits limiting their capacity to mobilise workers and claim legitimacy in
representing labour (Crowley and Ost, 2001; Crowley, 2004), and show that external
pressures exercised by international organisations (IOs) such as the World Bank (WB), the
European Union (EU) or the International Monetary Fund (IMF ) either through soft or hard
constraints have been a central factor that contributed to the swing towards the
liberalisation and flexibilisation of employment relations in Romania. As we will show, IOs
have been increasingly involved in promoting policies at the national level, a factor that
limited the leeway that trade unions had in promoting their agenda.
The adoption of the 2003 Labour Code and the 2005 negotiations over amendments to it
reveal that Romanian trade unions succeeded in negotiating and defending a labour-friendly
arrangement. Although in 2005 IOs and especially the IMF sought to pressure the Romanian
Government to introduce more flexible work time arrangements, in the absence of hard
constraints, the government ultimately budged in front of the trade unions and cancelled
most of the proposed changes. However, the flexibilisation of work remained a constant
topic on the agenda of the Romanian governments and IOs. With the crisis providing an
opportunity to bypass democratic politics while enhancing the policy influence of the IMF
and the EU, radical deregulatory reforms were adopted despite mounting protests from the
trade unions. To push for the deregulation agenda, international actors did not act alone, but
in concertation with domestic allies, and in particular, employersassociations.
To substantiate our argument, we use both interview data as well as official documents
and newspaper articles. We first undertook a comprehensive analysis of WB documents
concerningthe Romanian economy and labourmarket (including adjustmentloan reports and
agreements),IMF Article IV Consultations and governmentsletters of intent to theFund, EU
pre-accession reports, memoranda of understanding signed between the EU and Romanian
governments, as well as European Semester assessments and recommendations. On top of
this, to better understand the situation for the trade unionsperspective, we conducted 20
in-depth interviews with national and sectoral trade union leadersin which we focused on the
main drivers of change of collective labour relations, the concrete actors involved, as well as
the actual impact various policies had on industrial relations in Romania[1].
The paper is organised as follows. The second section discusses the surprising absence
of IOs from the literature on CEE industrial relations. Compared with the welfare state
literature, where the influence of IOs is a central explanatory factor for the outcomes of
many reforms (pensions, healthcare or social assistance programmes), in industrial relations
the influence exercised by the IMF or the WB appears secondary, despite the key role these
institutions had in shaping policy outcomes. The next sections discuss the transformation of
industrial relations in Romania since the demise of the state socialist regime. The first phase,
between 1990 and 2003, was not only marked by high levels of trade union militancy but
also by an unstable relationship between Romanian governments and IOs, which allowed
for a relatively high level of union influence in national-level policy making. However, the
1992 and the 1997 economic crises limited the gains that trade unions could obtain from the
government. Institutionally, industrial relations remained underdeveloped, with a Tripartite
Council created as late as 1997 and remaining mostly a façade institution. The second phase,
between 2003 and 2009 was marked by the economic stabilisation of the country and the
adoption of labour-friendly legislation. In the aftermath of its adoption, the new Labour
Code was heavily contested by both IOs and employersassociations, who perceived it to be
too rigid for the Romanian economy especially in areas concerning collective bargaining
rights and regulation of work contracts. Nonetheless, attempts by the government together
with an international coalition of actors (IMF, WB, EU) in 2005 to liberalise the labour
market were met with strong opposition from trade unions, who, for the first time after 1989,
organised a common front and successfully blocked these reforms. In the most recent phase,
693
International
actors and
trade unions

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