Improved wages and working conditions

A new branch collective agreement in the textile, leather and garment industry in Moldova

A new collective agreement covering 23,000 workers (based on data provided by the social partners) employed in 104 SMEs enterprises in the textile, leather and garment industry in Moldova provides for a 5 per cent increase of the branch minimum wage, and for the first time a negotiated wage scale better aligned to the job structure of the industry.

News | 08 May 2018

 With approx. 26,000 workers, out of which the vast majority are women employed  in the textile, leather and garment sectors, the light industry is one of the main economic branches of the Moldovan economy, exporting 80% of its products.  While on an expanding trend, it can currently offer an average gross monthly salary of EUR200, just slightly above the national minimum wage of EUR110.  Difficult working conditions and low pay make the light industry unattractive, especially for those young workers who have not already left the country According to 2016 public statistics, 500,000 Moldovans work abroad, mostly in Russia and the EU. A significant shortage of required skills and high turnover complete a rather gray picture.

An analysis of the Moldovan multi-employer collective agreements, carried out within the 2017-18 ILO Technical Cooperation Project on Wages and Collective Bargaining, has shown a significant gap in aligning wage scales with job structures in the textile, leather and garment sectors. Wage fixing in SMEs operating in the light industry has mainly been guided by the Law on wage tariffs, which is applicable across the national economy, without taking into consideration the economic features and needs of specific sectors.

The added value of a multi-employer collective agreement is a negotiated compromise between sectorial employers’ and workers’ organizations on a minimum wage and wage scale applicable sector-wide.  On the one hand, such a wage scale meets the needs of companies in terms of competitiveness and skills and, on the other hand, makes the industry a provider of quality jobs, and thus attractive for skilled workers. It also ensures a level playing field through preventing unfair competition based on a “race to bottom” quality of working conditions and wages, as well as adequate protection coverage for vulnerable workers at risk of exploitation or social exclusion.

The ILO has assisted the branch social partners, Association of Employers from the Light Industry (APIUS) and Federation of Trade Unions from the Light Industry (FSLIU) to devise and negotiate a sectorial wage scale, which sets out a new wage grading methodology based on job evaluation at the enterprise level. The new collective agreement also offers better working conditions in terms of Occupational Safety and Health, flexible working time and professional training compared to the previous one.

According to Ms. Alexandra Can, president of APIUS, representing 104 SMEs in the textile, leather and garment industry, the new branch collective agreement is a useful tool for employers and trade unions to negotiate fair wages and working conditions, which go beyond the minimum standards laid down in labour legislation and are better aligned to the company economic results. During negotiations, which benefited from ILO expertise, both parties showed high willingness to compromise and find good solutions,   with the view to motivate the workforce employed in the branch, and to increase the potential of the industry to attract necessary qualifications.

Ms. Nadejda Rusnac, president of FSLIU, takes the view that the new branch collective agreement is the outcome of a good dialogue between the social partners at the branch level, facilitated by the ILO. It is of paramount importance for securing labour rights and protection of social and economic interest of all workers in the light industry. The conclusion of the branch collective agreement will further be reflected in a number of renewed collective agreements at the company level.