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Introduction: Mr. Coen Damen, Bureau of Workers Activities, International Labour Office
Mr. Damen began with an overview of the political and economic developments of the closing years of the 20th century. He warned that political restructuring and economic reforms had disrupted the established social safety nets to the detriment of society's most vulnerable groups as policies of structural adjustment have meant money otherwise reserved for social services has been spent elsewhere.
Mr. Damen asserted that the social dimension of reform must be understood as progress towards higher living standards, greater equality of opportunity and securing basic human rights. He called for a balance of state action and market forces, a public/private mix which allowed for the state to provide efficient social services and to protect the vulnerable groups in society. To do this effectively, he argued, required an open, accountable and inclusive state, ensuring co-operation and negotiation between governments, businesses and trade unions.
Besides the ILO meeting in 1995 on the impact of structural adjustment in the public services, the Working Party on the Social Dimensions of the Liberalisation of International Trade of the ILO Governing Body observed the negative effects on social security in countries in economic transition and found that there was a marked deterioration in coverage, benefit levels and sustain ability of the system. The side effects of privatisation, falling wages, services and rising unemployment were more severe and more prolonged than expected.
Mr. Damen stressed the need for public service union participation in the formulation of adjustment policies. Participation should be based on an adequate legal and institutional framework of sharing information. The machinery established to enable participation at local and national levels ought to ensure balanced representation of women, minorities and the disadvantaged. All changes affecting conditions of employment should be determined with union involvement.
Where restructuring results in changes of staffing levels and tasks, Mr. Damen listed several provisions which should be applied consistent with good employment practice. Firstly, for workers required to widen their skill-set, there should be publicly funded or jointly funded retraining. Secondly, he considered the introduction of placement services for alternative job prospects, and finally, redeployment within the public service sector according to the skill/competency of the jobs to be performed.
While redundancy ought to be a last resort, it might be unavoidable. If this was the case, it ought to be accompanied by retraining and placement services, early retirement schemes and financial compensation, social security benefits to provide interim financial support, affordable credit facilities for self-employment, and the provision of pension and other employee benefits, and the protection of those already acquired.
Mr. Damen noted that restructuring in central and eastern Europe draws on elements of reforms already underway. Measures taken to the field of employment included the elimination of "ghost workers" where fictitious workers were removed from the payroll, no new recruitment, laying-off temporary and casual workers, voluntary and compulsory redundancies.
He then moved on to discuss the issue of public sector pay, which he believed ought to be brought about through negotiations with trade unions, fair and not aimed towards pegging down increases or freezing them. Flexible pay systems ought only to be used where they contributed towards efficiency, effectiveness and quality, and again should be subject to negotiation with unions. Where flexible schemes were used, Mr. Damen asserted that they should be subject to several conditions. All schemes should be based on management arrangements negotiated with unions according to transparent criteria. Funding ought to be sufficient to represent an advance on previous pay levels and the scheme should be tested in pilot programmes before applied on a wider scale. He mentioned other forms of motivation such as improved job satisfaction through skill diversification and improved technology may be developed in addition to improved pay levels.
Finally, Mr. Damen discussed training, which he considered not just part of structural adjustment but vital to its success. Workers should be offered training sessions during working time to enable them to adapt to change and should have the opportunity to pursue their own skill goals through sabbatical leave and transfers. Extra focus ought to be directed toward vulnerable groups such as women, whom he noted, were hit especially hard following public service reforms.
Discussant: Mr. Bob Abberley, Chairperson, European Public Services Union, Standing Committee on Health and Social Services, United Kingdom
Mr. Abberley stated that his presentation would consist of an examination of the British experience over the past 18 years and the consequences of a lack of real dialogue and partnership in the health sector. The introduction of health reforms was a product of a dogma which had no time for dialogue or consensus. The recent history of the National Health Service (NHS) in the UK showed that, as a method of managing change, such an approach was ultimately counter-productive. Successive governments had failed to employ the basic maxim that there must be support and ownership of change by those who are subject to the effects of it.
Beginning with how the proposals were introduced, Mr. Abberley noted that, in 1988, a review of the NHS was announced with the resulting proposals for change entitled "Working for patients". Despite the wide-ranging nature of the brief, it was not a consultation document, nor were the views of interested parties sought. The legislation passed through parliament in 1990 without amendment, despite objections from opposition parties, NHS trade unions and professional medical bodies. Piloting the reforms was rejected on the grounds that doctors would ensure the scheme's impracticality.
Mr. Abberley turned next to self-governing Trusts, introduced by the legislation passed in 1990. These Trusts were hospitals that, although remaining within the NHS, were independent of local health authority control and had to act in a commercial manner. In this way, consultation was sought with the views of interested parties. However, following a report by the Greater London Association of Community Health Councils, it was concluded that the notion of a 'consultation' was not appropriate. In response to the application for Trust status, 86% of written responses were against the application. Where ballots of staff, local doctors and/or the public were organised, 86% voted against trust status. Yet every application for Trust status was approved by the government.
Mr. Abberley also analysed the introduction of local pay into the NHS. Traditionally, pay was set nationally but the government decided it ought to be set locally, a decision which was opposed by all staff groups in the NHS. In 1995 the government imposed a minimal pay award, announcing that further increases could only be obtained locally. Following a campaign by staff and a successful ballot for industrial action by the union members, a negotiated settlement was reached which retained the national framework but allowed some local bargaining.
Finally, Mr. Abberley noted the difficulties faced by the British Government over hospital closures. While he acknowledged there may be a case for rationalisation, and changes are inevitably politically sensitive, Mr. Abberley suggested that the failure to engage in public consultation over closures, the inability to enter real dialogue and the fear of consensus meant that the former Government lost the trust of the NHS workers.
As for the implications of the governments' approach, he developed the theme of lack of trust. The failure to consult had its effect on voters who felt unable to identify with the policies pursued by the government. Mr. Abberley noted that in circumstances where interested parties see no opportunity to influence decisions, the only alternative was opposition. A meaningful dialogue in the health sector might have improved public health care in the UK.
Discussant: Mr. Rudolph M.D. Zboncak, Ministry of Health Care of the Slovak Republic
Mr. Zboncak stated that health provision in Slovakia was split between the public and private sector. The government saw the provision of health care as vital to successful political and economic transition.
The impetus behind reform was the provision of efficient health care, which was achieved by reforming the treatment of the terminally ill, leading to a reduction in the number of beds and a reduction in personnel costs.
A tripartite system of dialogue already existed in Slovakia, giving employers and workers a voice regarding government policy. The Slovakian constitution guaranteed freedom of association, with social dialogue shifting from regional to local levels, opening debate to a wider audience.
Mr. Zboncak reiterated that social dialogue was to be implemented through collective bargaining. It took place at two levels in industry and had to be agreed between employers and workers. The agreements were binding and necessary in a competitive environment. He also believed that social dialogue should do away with the injustices between the public and the private sector.
Social Dialogue though Collective Agreements
The representative from the Croatian Ministry of Health said that collective agreements had been signed with health service trade unions in December 1996 and became law in 1997. A special committee had been established comprising of three trade unions and three government representatives to make the law understandable and comprehensive. The agreement for terms and conditions of service included, for example, the hours of a working week, leave linked to domestic circumstances such as single parenthood, as well as length of service and education. Pay was also agreed with transparency of salaries and built in incremental rises. Furthermore, employers were required to provide trade unions with facilities for accommodation, telephones and fax machines.
The worker representative from Estonia explained that legislation existed to assist social dialogue. This included the right to be a member of a trade union, protection against dismissal for being a trade union representative and collective agreements. Tripartism in Estonia included the government, employers and trade unions. The Ministry of Social Affairs decreed that the Hospital Association is the employer. This has enabled them to participate in negotiations. Currently agreements existed for a minimum wage for middle personnel such as doctors and nurses which are an average wage. There was flexibility to pay more (not less) depending on qualifications and geographical regions. There was also a basic platform for local bargaining, with bi-lateral negotiations at the work place between management and the trade union representative to negotiate agreements. A major obstacle to social dialogue was that 13% of staff were never paid on time. This also had a knock on effect on the payment of trade union contributions, creating a financial deficit for the trade union.
Social Dialogue with Inherent Problems
The worker representative from Macedonia stated that, in his country, social dialogue existed in theory only. When the trade union wanted to implement an agreement it did not work, reducing the trade union to a watchdog organisation. He said the government was being advised by the World Bank on social and economic problems. As a result the privatisation process led to 100,000 health care workers being laid off, with a further 8,000 job losses predicted. He called on the ILO and all the participants at this meeting to come to conclusions which should be binding Ministries to be involved in social dialogue with trade unions.
The government representative from the Ukraine said that they viewed very seriously the issues discussed at this meeting, but said a common challenge was that trade unions criticised all governments whatsoever. She explained that the situation in Ukraine arose from a budget crisis. Also a population of 50 million presented many pressing problems. Already 100,000 people in the health sector have been made redundant and staffing levels need to be reduced further. Moreover, she claimed that there was an oversupply of expensive specialists and investment was needed in prevention and re-training. She said change was necessary for the appropriate use of resources and to preserve equity. She stressed that the trade union and the government needed to agree on wages and to limit the number of retrenched workers. Social dialogue did exist and an agreement was reached in 1996. Problems with this agreement had been referred to a standing committee, however, social dialogue was essential.
Social Consequences of Reform without Social Dialogue
The Czech Republic's worker representative commented on the importance of social dialogue. He believed that the Government of the Czech Republic and the former Government of Britain were similar because their interest was in promoting their own ideology. He hoped that over time this would change and that reports and policies advocated for by the ILO would be fully considered and adopted.
The Hungarian government representative informed that there had been structural changes in the national health care system. The most important was the reduction of hospital beds with more than 1,000 bed closures in 1995-96. The Minister of Health negotiated this with managers of hospitals, and discussions were held with health insurance companies, however not with trade unions. Consequently, unemployment increased. One hundred fifty physicians lost their jobs against one thousand two hundred physicians remained in the system.
The Romanian worker representative reinforced the point that the health reform process undertaken by the Ministry for Health began with hard measures, without dialogue or consultation with the trade unions. He said the number of hospital beds were reduced by 6,000 alongside a reduction of 40,000 health service jobs. The quality of care lowered due to the shortage of personnel and low quality management skills. Sanatoriums were closed. He said the centralised system had been maintained and the public was not informed about the measures taken. The new government, now installed for the next five years, would not sign a collective agreement for this year. He emphasised that the trade union agreed that reforms were needed but only if discussed in social dialogue. The trade union believed it was possible to have discussions with Ministers of Health with proper preparation and in openness.
The representative of the private employers of Romania confirmed the situation. The new government was strong, decisive and in favour of privatisation and regulation for the nurses. They also wanted to promote private primary health care and privatised pharmaceuticals. He recognised that wages are low but said there was a willingness to try to improve this. He believed the government wanted to set up social dialogue to include a three party commission with the Ministry of Health, employers and trade unions.
The Slovenian worker representative observed that tripartite discussions were necessary for a cut in 1,000 hospital beds and for the sake of those being made redundant. Concerns were expressed about unemployment as a result of structural adjustment particularly in relation to social consequences on women who are from the majority of nursing aids or hospital support staff.
The worker representative from Poland recommended that reforms leading to restructuring and redundancies should be well planned, gradual and should include a study of geographical considerations. He highlighted the high rate of unemployment among health service workers in small towns; this situation was familiar to many central and eastern European countries. Often husbands were already unemployed and their wives were the only source of earned income. Therefore, reforms introduced rapidly left many families without any means of support.
The worker representative of Latvia stated that social dialogue had only recently been established. Agreements for discussion had been available since November 1996 but were not yet signed by the government. Trade union and professional associations had requested the Health Department to begin social dialogue. If refused, they warned picketing and demonstrations at the Department. She said that trade unions had not been able to participate or influence the reform process. On a positive note she indicated that there had been some discussions with the tripartite delegation at this meeting and this showed that progress may be possible.
Staff not paid on time
The Worker representative from Bulgaria said that the collapse of the economy, including tax evasion led to a situation where medical workers were not being paid. The trade union responded strongly to the non payment with good effect. She reminded the workshop that non payment of wages was a violation of rights and called for the reinforcement of the ILO Convention (No. 95) concerning the Protection of Wages, 1949.
The government representative from the Ukraine stated that pay in the health sector had been delayed for five to six months. Although there had been hunger strikes, they had not seen the extremes of strikes yet. The government wanted to find ways to solve these problems and this type of action had urged it to find ways to pay staff. She stressed that they have established average pay in the health service and it was sufficient to cover food, education and rent. The new Health Care Act dealt with standards concerning pay scales; it was important for the trade union to support the government in changing indicators and to motivate staff.
Professional Issues including Standards of Practice, Education and Training
The Croatian representative of the private employers called for better training and up dating of skills for health care managers. This would improve and develop tripartite negotiating skills and assist in the utilisation of best practice for the smooth introduction and implementation of health care reforms.
The worker representative from Estonia said that professional issues concerning standards of education and practice were particularly important for existing staff who needed to upgrade their skills, but also for those made redundant and considering alternative careers. In addition individual health care workers should be entitled to increased pay for gaining additional professional qualifications.
The Hungarian government representative said that Hungary had a programme for the retraining of physicians which was individually tailored. Costs were met by the government and former employer. There was also a shortage of nursing staff but an oversupply of other professionals. In addition, within the health care system there were health care workers without training who were now being retrained. However, this did not ensure that individuals would get a new job
The Polish worker representative commenting on the professional education situation said the situation for doctors in his country was good. They were entitled up to three months education leave a year, while receiving a regular salary from the employer. To be eligible for a course a doctor must sign an agreement to remain with their employer for three years. If the doctor chose to leave, the cost of the course would have to be reimbursed to the employer. The picture looked less good for other health workers such as nurses and technicians. Social dialogue in Poland had been feudal. He believed there was hope for a new agreement soon which would improve the situation. So far the Ministry of Health took all decisions on their own but now trade unions were becoming involved in improving the direction of training.
Global Agencies and Social Dialogue
The representative of the International Council of Nurses advised that the World Trade Organisation had recently created a task force to look at the mobility of professionals. However, as workers organisation had no official status with the WTO, only Governments were involved in the negotiations and the workers' view would not be taken into consideration.
There was a general consensus that there should be an exchange of information among national partners but also with international partners. This was particularly important for those countries in transition. A dialogue was also needed with agencies like the World Bank and the International Monetary Fund. Their policies and commitments had a strong impact in national countries.
Future Activities of PSI and the ILO
The worker representative from the Czech Republic said that this session had been very important and valuable exchange of information. It was stressed that this meeting provided a platform for more consideration of the conclusions of the ILO Joint Meeting on the Impact of Structural Adjustment in the Public Services, 1995. He requested the ILO and PSI to facilitate further consideration of the ILO Report on the Impact of Structural Adjustment in the Public Services alongside the conclusions from this meeting.