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28 martie, 2024

11 iunie, 2017

The evolution of the draft unitary pay law on wages for employees from the public sector and the final version of the law passed by Parliament on Wednesday represent a major failure of the PSD – ALDE ruling coalition – the representatives of Romania 100 Platform announced by a press release.

Ex-prime-minister Dacian Ciolos’s team explains extensively in the press release:

The law is non-unitary and inequitable because it violates the principles of non-discrimination and equality, in the sense that there is not an equal compensation for equal work. Not only that the basic salaries do not reflect these principles but the divergent interests within the ruling coalition have caused the creation of some sets of bonuses that break any equity in terms of remuneration. Two notable examples with this regard:

  • At the local administration level, the pay scales have been eliminated and a pay system based on the arbitrary decision of the local elected representatives has been established instead. Given that more than three-quarters of the territorial administrative units in Romania do not cover their current expenditure by current revenues but by allocations from the state budget, to leave the process of establishing the wages to a local authority means the consecration of the nepotism, favouritism and direct discrimination between civil servants having the same type of activity but working in different regional administrations.
  • At the central administration level, there are differentiations between similarly ranked institutions, for instance upper level ministries, with a 15% „work complexity” bonus (Labour, Finance, Development, Health, Justice, Environment) and second level ministries, although it cannot be justified at the level of the same types of functions why there would be a higher or lower work complexity only on the account of an institutional membership.

The right alternative in a truly unitary law, says the Romania 100 Platform, would be to keep the hierarchy coefficients and pay scales on the principle of „equal pay for equal work” and apply them throughout the administration without institutional discrimination by some bonuses or other discretionary remuneration practices.

The law is irresponsible and has no adequate substantiation because it started from a promise to increase the budget for public sector salaries by 32 billion lei (over 50% payroll increase) without any detailed budget sustainability analysis and based on a much over-optimistic forecast in the medium term.

The option to pass the law to the Parliament has led to an escalation of additional increases without any justification, which puts current budget balances to the test, especially the public deficit of the years to come, despite the official warnings from the European Commission.

Moreover, the actual Labour Minister has ignored the former government’s initiative to collect the salary data of all public sector employees through the M500 form and chose to proceed further blindly, without any clear wage record that would allow a detailed simulation of the impact at the individual level. That proves a total lack of professionalism and an ignorance of the way public policies of such scale should be prepared.


The right alternative would have been to set up a sustainable budget based on a realistic economic modelling in terms of a possible increase in the wage bill. The calculations made by the Ministry of Finance at the end of last year showed that a sustainable threshold for increasing the wage bill is of 19.5 billion lei until 2022 while maintaining this expenditure within 7.6% of GDP.

Moreover, completing the database with all public sector employees should have been a priority so that we can explain the impact of the law at any moment.

The law is unpredictable and deceives the expectations of more than one million public sector employees: first, it breaches the promise of increasing the wages as of 1 July 2017, as it is proposed the postponement of the wage increase until 1 January 2018. On the other hand, while the government program voted by the electorate said that the law is to be implemented by 2020, the current proposal has the deadline in 2022.

The correct alternative would have been that the process of increasing the wages to be made by reference to the 2022 final growth target, so that those who are the worst behind the correct equivalences can advance at a faster pace, and those in a relatively more favourable pay positions to advance at a slower pace.

Unfortunately for the Romanians, the solution chosen by the PSD-ALDE coalition for the unitary pay in the public sector ignores the bill presented by Ciolos government in late 2016. That project met at least four certain parameters – it was aimed to secure equity and not the division, set a threshold of 19.5 billion lei and a share of 7.6% of GDP – to not affect public investments in other fields, was based on tangible calculations at the employee level and finally, created a predictable wage evolution base until 2022 that would have ensured an average wage increase in the public sector by 37%.

Finally, the form and manner in which the unitary pay law has been adopted demonstrate the incompetence of the government and the minister in charge of this bill, Lia Olguta Vasilescu.

Long-term consequences of this approach will be felt by all Romanian employees both in the public and private sectors and by the entrepreneurs and investors from the local economy.

The full press release can be read HERE-LINK.

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