Collective Bargaining

The third largest lender of the country, the bank ABLV, is to be closed down. On 24 February 2018, the European Central Bank announced that ABLV was ‘failing or likely to fail in accordance with the Single Resolution Mechanism Regulation’. The ECB said that ABLV’s liquidity position had deteriorated to the point where it had insufficient funds to meet its obligations. In fact, ABLV experienced a bank run which drained it of money. The Luxembourg subsidiary of the bank declared that its liquidity still fully covered the amount of its clients’ deposits. However, the decision was to also wind up the subsidiary. The Association of Latvian Commercial Banks stated that it fully supported the decisive and forceful action for the benefit of a resilient financial sector. In both countries it is unclear what will happen with the workforce.

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In a fourth round of talks, carmaker Volkswagen and trade union IG Metall reached a wage agreement for more than 120,000 workers. Base pay for employees covered by the collective agreement is to be increased by 4.3% as of 1 May 2018. In addition, employees are to receive a one-off payment of €100 for the months from February to April 2018. An additional annual payment of 27.5% of a month's salary from August 2019, which may be converted into six days of leave by special groups of employees, has also been introduced. From July 2019, a monthly payment of 90 euro is to be made to the company pension scheme; from January 2020, the figure will rise to 98 euro. In future, project working time arrangements are to be changed. The collective agreement has a term of 27 months.

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In one of the busiest weeks of the European headquarters of the UN in Geneva employees planned a half day strike. It is still unclear how many of the 9,500 employees participated in the strike. UN staff are protesting recent pay cuts of 3.5 percent that will swell to 5 percent in June 2018. Staff of other UN quarters around the world are also faced with pay cuts. Since president Trump is in office Washington demands significant bell tightening as threatened deep budget cuts to many UN agencies. The strike was declared to be the first day of action that will be followed by others.

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The proposed pension reform, which will introduce a point system to calculate pensions is met with protest. Following a large demonstration organised by the trade unions in Brussel in December 2017, teachers stopped their work for an hour on 1 February in response to a call from education unions to denounce the pension policy. One of the demands of the teachers is that their job will be recognised as a difficult job so they could retire earlier than at age 67. Only in jobs that are recognised as hard jobs, employees are allowed to retire earlier. The pensions minister had declared in December that mental or emotional hardship alone may not qualify as hardship. This could exclude teachers from early retirement. Another issue of concern is how the new point system will work out for female teachers: the unions demand a more equitable pension for women who may have lost work time to raise their children at home. Public transport workers and other public service workers protested against the pension reforms with a national 24-hour strike on 27 February.

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The European Court of Auditors say that better targeting of EU funds would aid worker mobility. The auditors assessed how the European Commission ensures the freedom of movement of workers, and the effectiveness of EU action on labour mobility. They visited the five Member States with either the largest inflows of non-national workers or the largest outflows of workers to other countries, i.e. Germany, Luxembourg, Poland, Romania and the United Kingdom. They found that the Commission provides useful information on workers’ rights through several channels, but awareness could be improved.

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Strike actions are being discussed by unions in reaction to Macron’s plans to reform rail system and cut rail workers’ special employment rights. One of the fears of the unions had expressed is that the rail system will be privatised after an advisory report 10 days ago suggested turning SNCF into an autonomous company backed by public funds. The prime minister stated that SNCF would not be privatised but remains state-owned. But the plans for cutting rail workers’ special employment status seem to be very real. Many rail workers have jobs for life and, in some cases, the right to retire in their 50s – a decade earlier than other public workers. Under government plans, these historical privileges would not be applied to new rail staff.

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Since the government introduced a new distribution of the social security contributions, there has been a fight going on about the impact on net wages. By emergency ordinance it was decided in 2017 to transfer all social contributions from employers to employees. This important change became effective on 1 January 2018. Companies had to increase the gross salaries of their workers with the value of the social contributions so that the net salaries wouldn’t drop. However, estimates show that in the private sectors some 2 million workers have received lower wages after the social contributions were transferred from employers to employees. The government still firmly denies that there is reliable evidence of wages going down in January 2018. The labour ministry has ordered that, by 31 March 2018, employers will have to register addenda to their workers’ labour contracts with the new gross salaries after the social contribution transfer.

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In recent tripartite talks between the trade unions, employers’ groups and government officials, the discussion is how to find ways to protect freelancers who work exclusively, or almost exclusively, for one platform. One of the basic problems is how to differentiate between independents, with a portfolio of different clients to fall back on, and workers whose only source of income is a single Internet platform such as Uber. According to the press the government has given up on its efforts to give the self-employed the same unemployment benefits as salaried workers.

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Sugar factories have been one of the longest established public enterprises, employing thousands of people. Fearing massive layoffs after privatisation, sugar beet producers, factory workers and opposition parties, have reacted with anger. Sugar factory workers and trade union Şeker-İş have launched a campaign to stop privatisation, arguing that local economies would collapse if the factories were to be closed. They are asking for modernisation of plants, instead of privatisation and have warned against a spike in unemployment.

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In the fourth round of the negotiations, representatives of the Private Employees' Union, Printing, Journalism, Paper (GPA-djp) and representatives of the Association of Industrial Manufacturers of Paper and Board Products (PROPAK) agreed on higher minimum wages and salaries for the approximately 9,200 employees in the industry. With an increase of 2.7 percent employees will effectively earn 50 euro a month more. Besides the minimum wages and salaries further agreements have been made on travel expenses and vacation for handicapped employees analogous to the regulations in the collective agreement.

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