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December 7, 2022

Editorial By Mihai Iordanescu Black labour, tacitly legalised?

Work is praised universally. Irrespective of the politics and doctrines of governments worldwide, the International Workers’ Day is celebrated as such. This is an issue over which opinions converge even if this festive day has been marked by violent protests against the much discrimination on the labour market. Romania’s government officials would not acknowledge such discriminations, as they declared themselves partisans of the said convergence. And it is exactly in its name that they decided the recently passed Labour Code whose passage was contested by the opposition to come into effect starting May 1 of this year. The decision is rooted in government’s firm belief the new Labour Code would lead to a more flexible labour market.

This is precisely what – officials emphatically say, will bring black labour to surface and make it easier to fight against.

And that, even if, in Romania, the proportion and subterfuges linked to black labour are incomparable broader and more perverse than in other EU countries. Romania’s Presidency and the ruling government agree that about 1.7 million people in this country are underground workers. And the “scourge” is therefore spreading fast, explaining why, in Romania, despite the layoffs being on the rise, the unemployment rate is declining. Increasingly drastic cuts, a result of such odd process, also apply to the public finance, which need to borrow massively from abroad. As a first measure against black labour, but also as a means for quick implementation of the provisions of the new Labour Code, the Boc Government decided that, starting May 2, the Financial Guard and the Police conduct strict controls aimed at cracking down on black labour, drastically sanctioned  under the new Labour Code.

While the government’s good intentions cannot be questioned, they nonetheless lead to the opposite of their intended effect if applied without paying attention to specifics. This lack of particulars is obvious even from this government’s idea of a flexible work market. The notion itself may be ambivalent. Its suppleness cannot be obtained but when viewed as the dual ensemble of a balance between the interests of employers and employees respectively, a balance meant to favour the equality of opportunities, convergent efforts, equally shared rights and duties of labour market participants. Unfortunately, sacrificing such nuanced correlations leads to the content of the Labour Code being in many respects discriminatory. The employer now has a great deal more rights than the employee and it is exactly this social balance that went lopsided, amid an increasingly declining role played by unions, and the civil society in general, which helps boosting veiled black labour and making it legit actually.

Analysts with different views agree on the breaking of the social balance favouring black labour. Collective hiring no longer being accepted, trade unions only being acknowledged as such if they count at least 51% of the workforce as their members, layoffs often exclusively left to employer’s liking are just as many servitudes of the new Labour Code, which servitudes, combined with 25% of the workforce earning an income that places them on the brink of poverty, actually make black labour official, in the sense that an employee, whether in the public or private sector, cannot refuse working overtime, even if they don’t get extra pay for the additional and, sometimes dangerous, work they do. Further more, bonuses or the length of the holiday leave become(s) uncertain, and the medical leave also becomes the first step towards being given the boot.

These outcomes of the provisions of the new Labour Code only apparently make the labour market more flexible , as what they actually do, is bring it to a deadlock and therefore legitimatise veiled black labour practices. And that, despite the knowledge brought by an EU older sociological research showing that only 15% of Romanian employees were allowed to take their entire holiday leave of 25 working days, compared to 38 to 44 days in Finland, France, Great Britain and elsewhere. Many Romanian employees had to either put their holiday leave off, with the remaining days piling from one year to another, or to accept receiving some more money, which however did not equate the actual worth of their work, if only for the fact that the length of the working week in Romania is up to 47 hours, from an European average of 35.

Romanian employees have so far accepted such practices for two reasons, the poor standard of living, with nearly 40% of Romanian workers living of the verge of poverty, and the fear of losing their job, also because the oversized rural workforce is an incentive for unemployment, and black labour implicitly. It is exactly these aspects, overlooked by the new Labour Code, that make correlations between the rise and decline in unemployment out of sync with those elsewhere. This is the context in which black labour is increasingly high and acquiring a veneer of legality too. Since working overtime without the commensurate pay and under the permanent threat of being laid off equals black labour, no matter how many “legal” documents put it under wraps.

Faced with such anachronistic realities, decision-makers in this country defend themselves, bringing up the low productivity argument, and, consequently, the low profit made in Romania, a superfluous explanation. Productivity wise, it is highly unlikely for the newly created value during 47 hours of work to be less than that of the European average of 35. Further more, employment-related spending in Romania is much lower than that in other countries. The low-profit argument brought by employers is discriminatory, based on a domestic market with low-income consumers that can’t afford high consumption. Yet, not so on foreign markets, where Romanian employers reap big profits from massive exports. And then, how could low productivity be blamed for the low productivity of Romanian employees, when it is exactly their chronic fatigue and low food consumption that undermine higher productivity?

This is the kind of questions the new Labour Code should have been drafted from. Former labour minister Ioan Botis, the main author of this legislative document, played them down, and willingly so. His being blamed for financial misconduct de-legitimizes to a great extent the authority of the new Labour Code.

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