Unions condemn plan to reform labor code

Labor unions denounced the government's four-year plan for revitalizing the economy last week, charging that rather than liberalizing the labor code the Democratic Left Alliance (SLD) should instead focus on stimulating domestic demand by lowering interest rates and increasing job security. The SLD-led government unveiled its economic revival plan last Tuesday and is targeting three key areas: gross domestic product (GDP) growth, unemployment and boosting the competitiveness of domestic businesses ahead of European Union (EU) entry - largely through labor reform. "I think the idea that the labor code can be used to fight unemployment is absurd," said Janusz Śniadek, vice chairman of the Solidarity labor union. "If this were the case there would be no unemployment around the world." Śniadek said Solidarity is prepared to discuss measures to reduce bureaucracy for employers but that the union generally sees the labor code as a secondary matter. "First we want to see some real solutions for stimulating economic growth," he said. The government wants to boost GDP growth to 3% in 2003 and 5% in 2004 in part by investing zł. 180 billion ($43.9 billion) in new housing projects and motorways. Officials maintain that the labor code should be altered to reduce employers' costs and to increase flexibility in the labor market, although details won't be available until later this month. In the meantime, changes to the labor code are being negotiated by the Tripartite Commission, which brings together representatives of the government, unions and employers. The outline of the government's labor code reform includes plans to reduce overtime pay in line with EU countries, lower the minimum wage for new employees and to limit employers' health and safety costs. The measures are designed to reduce employment expenses and provide incentives for companies to hire more workers. "Enterprise is the most important environment for preserving and creating new jobs," Prime Minister Leszek Miller said at a meeting with businesses last week. "Without them there will be no economic recovery or the success which Poland so eagerly awaits." Pay us more According to Ryszard Łepik, vice chairman of the Ogólnopolskie Porozumienie Związków Zawodowych (OPZZ) labor union, the government should focus on stimulating demand. "The main reason for the current lull in demand is that people have no money because they don't earn enough," Łepik said. "Around 79% of the population is paid less than half the national wage, so how are they supposed to buy goods? Individual consumers do not want to use credit because of high interest rates and job uncertainty. Companies are running on empty so there is no investment demand for new machinery or technology … and without this, the economy will not improve." Łepik said the government's frequent pledges to bolster support for small- and medium-sized enterprises should be backed by increased protection for their employees, a large share of whom work part time, on temporary contracts or have to register their own companies and pay their own insurance contributions. "This is why our main concern is job security, and that the basic form of employment should be an umowa o prace (full-time contract) rather than … contract labor or various false forms of self-employment," Łepik said. Since Solidarity Election Action (AWS) was voted out of office in September, unions have lost political influence in the Sejm and membership is sinking in line with surging unemployment rolls. While the OPZZ still has 44 deputies in the Sejm, last year's general elections left AWS with no representation. Unions have maintained a high profile through demonstrations, such as the 2000-strong wage protest at Stocznia Szczecin shipyard last month, but union leaders agree they are now less able to change the direction of the government' s program.