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February 3, 2023

Code of good manners

The way in which the procedure whereby the Government asked for a vote of confidence over its new labour code went yesterday has nothing to do with social etiquette. On the contrary, the Parliament seems to have turned into a place where good manners and the battle of ideas find no place anymore. The democracy on the banks of Dambovita River has opened the 2 in1 Parliament. While PM Emil Boc was reading out the text of the law, the opposition left the room. Today, the opposition will be reading its censure motion called ‘Boc Code – small salaries, big unemployment, businesses going bankrupt’. When it comes to voting, next week, it will be the turn of the MPs of the power to skip the vote.
Also new was the decision of the Standing Bureau to only admit journalists during the session in order to avoid an undesirable clash with the trade unions that are getting increasingly vehement against the new labour code.

What is it so special about this new code that it arouses so much passion – both political and social? This question we tried to answer a week ago, but clarifications on the political and social stage are still pending. Union protest, threaten to cease work and even to call a national strike. On the other hand, Monday evening, the Government only accepted eight amendments out of 144 (!), including the one giving priority to re-hiring to laid-off workers within a period of 45 days. As if the employer could not just wait for 45 days and hire someone new on the 46th day…

In fact, the Executive only accepted a few amendments to give a little satisfaction to its ruling partners such as UNPR who has so far played the role of the party interested in common welfare, even holding talks to the unions the other day.

“It is possible that, against expectations, the new labour code may have positive effects and the waves made by labour unions and opposition might have been triggered by private interests. But we still think we should be allowed to have our doubts.”

As we were noting on other occasions, the new labour code is one that simply ends the time when the employee was given priority. After the communist period and after the 1990s, dominated by the Social-Democrats, too little has chanced in the approach to labour. This new code is one that gives way to the employer, offering him many ways to ‘get rid’ of annoying workers or to tell off those who manifest themselves as ‘agents of disturbance’. Extended employment agreements on definite periods, extended probationary periods, the option of changing working hours, etc. give enhanced powers to employers who will always be entitled to renounce the services of the employees. Even if the employers’ associations have objected to the new code, it actually fits them like a glove. While some refuse to admit it, businessman Dinu Patriciu has, backing the form of the bill upheld by the Government. The aforementioned provisions (plus many others) make unions claim that the new code will turn the workers into ‘slaves on plantations’ or ‘modern day slaves’. On the one hand, the entry into force of the code will be decreasing unions’ power. On the other hand, there is, indeed, a risk that the enforcement of the new law may lead to abuse, with the most frequent probably being unpaid extra hours.

The defenders of the code however say it will only make the labour market flexible, that it will allow more hiring and that the employers won’t have to live with the fear that, once they have signed an agreement and the worker turns out to be inadequate, they won’t be able to let him or her go.

If the new labour code was promoted in a European country with both democratic and labour ‘flexibility’, we could believe that the Government’s targets have a chance to become reality. How will the employer who now uses illegal labourers in small towns with small wages use the new code? We should not forget that, in Romania, one in four people are employed informally. Will he go legal or will he depress the pedal even more, threatening workers with the loss of jobs and even cutting their salaries? This is the kind of question no one has yet answered. And, unfortunately, such cases are not singular and only in the country. The employer-employee relation problem is a complex one. Even under normal conditions, how can anyone be sure the employer would not take advantage from his new position in his relations with his employee, knowing (for example) that the latter has bank loans to repay and that he can threaten-blackmail him with termination whenever he likes?

It is possible that, against expectations, the new labour code may have positive effects and the waves made by labour unions and opposition might have been triggered by private interests. But we still think we should be allowed to have our doubts. Sketched out under the pressure of the IMF and of foreign business interests in Romania, the new labour code seeks to bring local labour market closer to the European one, in a trend that will please foreign investors and reinvigorate post-crisis investments. It is still to be seen if the market will give a well-balanced answer to the challenges raised by the new code or if we have major distortions ahead of us. If the code of good manners finds no place in the Romanian Parliament, what can we expect of the labour market and the ‘actors’ operating on it? Aren’t our expectations perhaps too high from a market that is still developing? Aren’t we too optimistic when we speak of flexible regulations in conjunction with a post-crisis period? In addition, quote a few who are very much aware of the unfortunate measures taken by the Emil Boc Government measures during the period of crisis give too little credit to this new legislation. After all, there is a possibility that the expected results never show and that the main effect may be the disappearance of minimum job security, with ravaging consequences on the labour market itself which the code intends to make elastic and dynamic.

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