Posted by: mbconsulting | December 10, 2010

Romanian Debate – Reducing the salaries?

About one month ago a Court from Valcea County, ROMANIA, decided that the reduction of the salaries in not a constitutional one, in spite of the Constitutional Court approval.This measure was agreed as an austerity measure and a complete legislation was submitted. Based on the Court Decision there were a few debates on internet and I would also state my personal point of view.

First of all, I’m not a lawyer, but I faced a labor dispute so I learned the Labour Code, Civil Code, Criminal Code and almost all necessary procedures.

If we must consider the wage reductions as one important element that was almost always escaped is related with undoubted truth: the lack of money and also with the source of money for public expenditures.

For public expenditures there is no way to think about if there are not prepared, in advance, the amount on money available, if you are authorized to use for that kind of expenditure and if this amount it may cover the expenses. In a more professional language and terms these elements may  be found in the law regarding public procurement.

So in our particular case we have a certain number of employees, their related agreed labor contracts, and the agreed wages on one hand and on the other hand the amount allocated for salaries – someone call  it “the salaries tire” – that not necessarily covers the necessary salary fund.

Normally and legally, and putting some smart decision of Government, you may manage like this: “Reduce the wage bill by 25%, and leave each institution to choose one of the options” below presented, and therefore the cat is passing, on the full charge, on each institutions’  responsibility .

What does the manager of the institution – the responsible for ordering the money?

The manager must be able to say, after negotiation with employees/ civil servants and/or trade union, something like this: please choose one from these three options:
1. jointly reduce all salaries by 25% for all the employees;
2. reduce the number of your staff to fit the “envelope wage ‘
3. reduce working hours – so, please excuse me, public employees  are too many or spend too many hours in a constantly reduction of the activity as the result of closures of the private businesses, the reduced numbers of constructions, approval or other control activities.

Under these conditions, as they were specified above, the public institutions were, more or less oblique to discuss with employees and trade unions, forces by the governmental responsibility to act and respect the state budget and the salary bills and the rest in nothing than a transparent mode of sorting a problem by each institution  which, by the way, if it is not running to reduce the wage bill, is responsible for patrimonial liability under their decisions. So, I think, giving them the leadership in this decision, their CEO may hurry the process for sorting problems, and the trade unions/ individuals would not rush to legal action, because they had only what they want/negotiate.

Even now, if there is willing the situation may be corrected and improved in such a way that the application of reducing wage ordinance may go on without any restrictions.

If we analyze the phenomenon, based on the law that forced each institution to reduce the salaries with 25% it is obvious that manager was not impressed by reducing wages, he was also affected by this austerity measure, and even made a little understanding, in a Romanian way, to kick some court actions, so that everyone stands to gain salary if the court gives them right.

The essence of applying that measure to reduce wage was completely forgotten that there was money under the state budget,

The lawyers and the Court from Valcea County relied only on Labour Code – without taking into consideration art. 157 paragraph 2, the ECHR, human rights, without taking note of the budget law, the patrimonial liability, and especially the objective reality: no money.

So something is not normal to happen, but more serious is that the courts, without minimal discernment, and please excuse my harsh words said, but I consider true, threw the cat in the yard of the government as the situation harder to cross and that it spins in the same circle. It is obviously that will not appear money to make payments without budget coverage. Things are simply, but why not to be complicated as the government, that is already busy with implementation of different austerity measures to make a new effort to sort this problem again, and again. Painful!

It was also regrettable that lack of discernment which comes from the court, against a painful reality. Everyone wants to have money, but they do not believe in trees or green grass of home. Maybe others parts of the world they do, but here in Romania, the answer is: no way.

It is my idea that I sustain and I maintain!

It is simply, isn’t it? Please take your time to complete a survey! Thanks for feedback!

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  1. bad decision with this salary thing…it’s a mess

    Here is my comment:
    You know sir,from my perspective, there were different possibilities to sort the mess:

    1. to reduce the working time – now, according to the new proposal of Labor Code this may be possible- that means that there are the same number of employees;

    2. to reduce the salaries – difficult, but in my opinion possible to be done;these is a law abuse, under my perspective – but maybe I am wrong; The private businesses were used this method and therefore it is not clear for me if the method is suitable for the private sector and impossible for the civil servants… Hmmm…

    3. to dismiss part of the employees – it was my first option, but thinking more carefully I reconsidered it and I would choose the method 1 or 2.

    Anyhow, everything was good to be discussed with trade unions, not because these are strong, because there are not, just because this is normal way in a civilized society…Just put on the table all the options and let them all tougher to decide, if trade unions are partners in a dialog with the chief of the public institutions.

    As I said in the post I would not put the pressure on the government , instead I will put the pressure on the chief of local public institutions. We have a phrase in Romanian : “Fiecare oaie isi duce blana” – “Each sheep is carrying the fur”.

    In rest everything is good when is ending with happy end, so I really hope to have a happy resolution at the end of the game!

    Happy New Year in 2011 – and Have Peace and Wealth!

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