Social agreement negotiations put on hold

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Since May 2003, Poland's national Tripartite Commission has been engaged in negotiations over a wide-ranging 'social agreement'. In September, employers' organisations and some trade unions reached a partial agreement on minimum wages, public sector pay increases and cuts in business taxes, which was accepted by the government. However, the NSZZ Solidarność trade union rejected the deal and withdrew from further negotiations over a full social agreement. The future of the overall social agreement initiative is now in some doubt.

In February 2003 (PL0307104F), the Minister of Labour proposed a draft 'pact for labour and development' (Paktu dla pracy i rozwoju) to representatives of trade unions and employers at a session of the national Tripartite Commission for Social and Economic Affairs (Komisja Trójstronna do Spraw Społeczno-Gospodarczych) (PL0210106F). The aim was to come up with a comprehensive solution to address many of the problems currently facing the country. After problems emerged with the idea of such a pact, negotiations instead progressed from May 2003 over a 'social agreement'. For several months, the negotiations proceeded briskly, and the signing of an agreement seemed close. In early September, employers' organisations and some trade unions agreed a joint position with respect to minimum wages, public sector wage increases and the reduction of taxes on businesses. However, the Independent and Self-Governing Trade Union Solidarity (Niezależny Samorządny Związek Zawodowy, NSZZ Solidarność) did not sign the agreement and the overall process is now on hold.

Difficulties in negotiating tripartite pacts

Tripartite social dialogue at national level through the Tripartite Commission has been underway in Poland since 1994. Over 1994-2001, the Commission operated on the basis of an ordinance passed by the cabinet, which provided that the conclusion of binding agreements within the Commission required the approval of all the trade union and all employers' organisations represented. This requirement impeded agreement because of the profound political differences prevailing between various members of the Commission, especially between the two major trade union organisations - NSZZ Solidarność and the All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Związków Zawodowych, OPZZ) (PL0308106F). To take one example, an initiative on 'social guarantees for citizens' launched by OPZZ resulted in the adoption, in 1995, of a document signed by the government, representatives of employers' organisations, local government representatives and 18 trade unions - but not by NSZZ Solidarność.

Over 1994-2001, national social dialogue in Poland was significantly limited. According to one sociological study (Dialog społeczny po polsku - fikcja czy szansa[Social dialogue the Polish way - fiction or opportunity], Barbara Gąciarz and Włodzimierz Pańkow), reaching agreement within the Tripartite Commission was hindered by strong political and ideological elements pervading the dialogue, as well as a tendency by at least some participants to treat dialogue as a means to specific ends, often short-term ones. Another study (The Polish talk show: Social dialogue and European integration, J Hausner and M Marody (eds), Friedrich Ebert Stiftung, Cracow, 2001), found that, in the course of negotiations, each party sought to prove that it was the only one which legitimately represented the social interest and that, accordingly, the interests of any other parties did not merit consideration

Two events occurred in 2001 that had a significant impact on the situation of the Tripartite Commission. The first was withdrawal by the trade unions from direct involvement in politics and the attendant hope that, as a result, their identification with the Commission would grow stronger. The second was the adoption of the legislative Act regarding the Tripartite Commission in July 2001 PL0210106F. An important provision of this Act authorised the Commission to adopt binding decisions even when one of the organisations represented withdraws from negotiations, the only prerequisite being that the decision is accepted by at least one representative of both employers and of employees. These two events marked the beginning of a new chapter of social dialogue in Poland.

From pact to social agreement

As mentioned above, in February 2003, negotiations commenced, on the initiative of the government, over a proposed 'pact for labour and development'- a comprehensive agreement involving all the trade unions and employers' organisations and extending to the entire economy. The chair of NSZZ Solidarność signed a preliminary declaration of willingness to commence negotiations, without first consulting the union's national commission. This move brought sharp criticism from the national commission, and the chair was forced to abandon the negotiations. This withdrawal on the part of NSZZ Solidarność was apparently related to its general antipathy towards the current left-wing coalition government of of the 'post-communist' Democratic Left Alliance (Sojusz Lewicy Demokratycznej, SLD), the Labour Union (Unia Pracy, UP) and the Polish Peasants Party (Polskie Stronnictwo Ludowe, PSL). NSZZ Solidarność was not convinced as to the government’s motivations and intentions, and it was reluctant to offer it any legitimacy by agreeing a pact with its representatives. A major role in this development was also, it appears, played by internal divisions within NSZZ Solidarność and the weakness of its leadership (PL0210103N). However, throughout this turbulent period, NSZZ Solidarność continued its involvement in the other work of the Tripartite Commission and in its 'problem teams', declaring that it wholeheartedly supported social dialogue as such and did not want to leave the Commission.

The government, the employers' organisations, and two trade unions represented on the Commission - OPZZ and Forum- were still all interested in negotiating the basic social and economic issues falling within the ambit of the proposed pact. Accordingly, it was proposed that, rather than discussing a pact, work should be focused instead on a 'social agreement' whose scope coincided exactly with that of the former proposed pact. After this semantic adjustment, NSZZ Solidarność agreed to join the negotiations, which duly commenced in May 2003 and were intensively pursued for several months.

Partial agreement

On 2 September 2003, two trade unions (OPZZ and Forum) and the employers' organisations reached an agreement on harmonising corporate taxes and taxes levied on private individuals pursuing business activity. This agreement was accepted by the government, and was considered an important foundation for a fuller social agreement in the future. Under the September agreement, the trade unions involved acceded to a proposal from the employers' organisations whereby individuals pursuing business activity in their own name should be taxed at a flat rate of 19% (rather than progressively) while employees who had not registered their own companies would continue to pay taxes on the progressive scale of 19%, 30% and 40%. This tax reduction marks a very important development for the small and medium-sized enterprises (SME) sector. In exchange for their agreement to this solution, the unions insisted on two important concessions - an increase in the minimum wage and a wage increase for the public sector exceeding the inflation rate. Both the Minister of the Economy and Labour, Jerzy Hausner, and the Prime Minister, Leszek Miller, had been calling for some time for a reduction in the tax payable by private business owners to 19%, taking the position that allowing more money to remain in the SME sector promises economic growth and the creation of new jobs. NSZZ Solidarność, however, did not sign this agreement.

NSZZ Solidarność position

According to the Gazeta Wyborcza newspaper, the national commission of NSZZ Solidarność, although it has not announced this decision in public, has decided that it will reduce its involvement in work of the Tripartite Commission to a bare minimum, though without actually leaving it. NSZZ Solidarność gave two direct reasons for its refusal to sign the preliminary agreement and for its subsequent withdrawal from negotiations over other issues covered by the envisaged social agreement. First, as the union's chair, Janusz Śniadek, put it, 'the item of the agreement concerning the flat-rate tax (for private business owners) amounts to the introduction of a flat-rate tax through the back door. This will give rise to another incentive to force employees to give up contracts of employment and start business activity in their own name.' Second, there are a number of strikes presently underway - for example, in steel (PL0309103N) and railway rolling-stock production ( PL0309104N) - plus major protests by miners over the proposed closure of four mines (PL0309105N). Mr Śniadek told Gazeta Wyborcza that NSZZ Solidarność will return to negotiations over the social agreement once the government has 'come to grips with the situation' and eased the current conflicts.

According to Gazeta Wyborcza, NSZZ Solidarność’s refusal to approve the accords reached so far is also related to a negative view of the conciliatory outlook of the union's chair taken by the more belligerently-minded miners' representatives and more radical activists from some of the union's regional sections, most notably in Mazowsze: 'they see in Śniadek an overly circumspect leader who is inhibited by fear of escalating social protests, and is too submissive vis-à-vis the government.' The next NSZZ Solidarność congress, scheduled to take place in Stalowa Wola on 26-27 September 2002, promises to be an important event on which the future of the social agreement negotiations will depend. According to Gazeta Wyborcza, 'forecasts abound within the union whereby [the congress] will bring a confrontation between Śniadek and those who oppose him. The winner of this confrontation will determine the future policy of NSZZ Solidarność.'

Miners’ protests

A disorderly demonstration staged by miners in Warsaw on 11 September 2003 and its condemnation by the Deputy Prime Minister and chair of the Tripartite Commission, Mr Hausner, further complicates the question of NSZZ Solidarność’s return to negotiations over the social agreement. The demonstration was very violent, with 62 police officers and 22 miners treated for injuries, five police vehicles damaged, and windows smashed at the Ministry of Economy, Labour, and Social Policy (Ministerstwo Gospodarki, Pracy i Polityki Społecznej, MGPiPS) building and the SLD party headquarters.

Speaking to the lower chamber of parliament the next day, Mr Hausner summarised the catastrophic situation of the coal mining industry (PL0309101F) and criticised the trade unions in strong terms. Minister Hausner said that 'the trade unions are not interested in reform because they are quite well off'. He continued: 'Let us consider the specific situation of the unions in the mining industry. 189 activists are delegated to union duties on a permanent basis when there ought to be just 90. Their average salary stands at PLN 6,000. The unions manage an assortment of companies; we estimate their annual turnovers at half a billion złoties. Are all the profits from this activity paid into the union coffers?' Marek Klementowski, the deputy chair of the NSZZ Solidarność coal miners’ union, described these comments as 'war declared on the mining unions'. Considered together, these developments mean that, for the time being, the prerequisite set by Solidarity for its return to negotiations, namely a calming of the social situation by the government, cannot be met.

Commentary

The efforts at negotiating a social agreement as well as the fate of the less ambitious agreement on tax and minimum wages reached without NSZZ Solidarność on 2 September 2003 indicate that social dialogue in Poland has presently arrived at a crossroads. On the one hand, all the individual social partners are interested in keeping up the dialogue because it gives them direct access to the legislative process and enables them to influence most legislative proposals fielded by the government. On the other hand, the political disputes which impede any kind of social agreement continue; this problem becomes most manifest in relations between NSZZ Solidarność and the left-wing government in which the largest party is the post-communist SLD. Political and ideological issues are mingled with real social interests. NSZZ Solidarność has become an organisation which represents manual workers, many of them employed in waning branches of industry, more than any other trade union. Groups of union leaders representing these constituents and, at the same time, involved in 'give-and-take' relations with management bodies, for example in the mining industry, have little interest in the conclusion of pacts which would lead to rationalisation of the economy and to a scaling down of its more dilapidated sectors.

A power struggle is now being waged in NSZZ Solidarność and in the Tripartite Commission alike, pitting the more radically-minded trade unions - primarily those from the struggling branches of industry - against the remaining social partners (including all employers' organisations and some other trade unions). The question for the immediate future is whether the radical unions will be in a position to limit social dialogue significantly, preventing the conclusion of a social agreement. The government is not actually bound by Tripartite Commission decisions in its own policy-making, but the conclusion of a wider social agreement would be an opportunity to legitimise current economic reforms in the eyes of Polish society at large. (Juliusz Gardawski, Warsaw School of Economics [Szkoła Główna Handlowa, SGH] and Institute of Public Affairs [Instytut Spraw Publicznych, ISP])