Hungarian unions: Responses to political challenges

Abstract

Hungarian trade unions face both the direct consequences of economic downturn and the political challenges that are implied by the deterioration in employees' and unions' bargaining positions with regard to employers. This article presents the political responses of both militant and moderate trade unions in detail. Compromises in Labour Code legislation and the creation of a new top-level negotiation forum are signs of a moderate union success.Key words: Hungary, social dialogue, trade union legislation, union renewal, civic movements (JEL: J51, J52, J83, K31)Four years after the unfolding of the financial crisis there are no signs of the Hungarian economy recovering, 'stagflation' and the danger of a coming recession being the buzzwords of economic forecasts. Yet, not only must trade unions face the direct consequences of economic downturn, but political deliberalisation implies even more serious challenges: the bargaining positions of employees and unions in negotiations with employers are deteriorating to the point that they sometimes are perceived as endangering the very existence of trade unions. The political turning point, the landslide victory of the right-wing party FIDESZ-KDNP in 2010, was partly a consequence of the global economic crisis, partly of domestic politics. Of course, this paper does not intend to describe the road to the economic-political crisis and the measures taken by the government; it merely sketches an inventory of the less known actions that directly affect the world of labour. What complicates the writing of this paper is the constantly changing political situation, inevitably rendering what we say outdated by the time it goes to print. The paper aims to give a snapshot of the situation of trade unions in summer 2010, and only draws tentative conclusions about the future role of traditional trade unions.Although abundant literature has been devoted to studying the weakness of trade unions in 'transitional economies' in the last two decades, given the limited time that has passed, the latest Hungarian developments have hardly been analysed. However, similar twists and turns are not unprecedented in post-communist countries and authoritarian tendencies among new EU members are far from exceptional, with the most notable example being Poland's Law and Justice Party (in power from 2005 to 2007.) However, the trade union context was quite different then. Not incidentally, scholars preferred to focus their attention on how liberal elites, including the leaders of the Solidarity movement, had prevented labour grievances from finding redress along class lines, and to what extent they contributed to political deliberalisation in doing so. (Ost, 2005; Vanhuysse, 2007).The structure of this article follows the timeline of events, beginning with a concise description of post-socialist industrial relations and the effect of the crisis. Then it gives an account of the right-wing government's measures that affect the 'world of work', especially the new Labour Code. This is followed by a detailed presentation of both militant and moderate trade unions' responses, which took place mostly at the political level. As the new Labour Code came into effect on 1 July 201 2, its impact on the workplace, on unions' bargaining positions and collective agreements was not yet clear at the time this paper was written (August 2012), which is why it can ultimately draw only tentative conclusions on the future of trade unions. The paper argues that the government created a system of 'selective negotiations', with unequal positions in terms of decision-making powers and access to financing. Separate bargaining is going on with representatives of employee groups of strong bargaining power, too, and the overall picture is to a certain extent reminiscent of the late stages of the socialist system.Post-socialist industrial relations before the crisisIn addition to a democratic political system and institutions of market economy, types of industrial relations common in other European countries were established in the fifteen years after the regime change in 1989/1990. …