The changes to the Fiscal Code bring the defense budget officers to the streets

Employees of state companies in the defense industry are preparing to protest because the provisions of law 296/2023 regarding the sustainability of public spending lead to their loss of rights regarding vacation vouchers, meal vouchers and seniority bonuses.

It is about the provisions of Article XLI of the chapter on the reduction of budget expenditures in Law 296/2023, Article which stipulates in point 1 that "starting with the entry into force of this law, economic operators, including their subsidiaries, are prohibited from awarding prizes, premiums, bonuses and other similar wage rights, in the situation where accounting losses were recorded from previous years and not recovered and/or they record accounting losses in the current year".

Constantin Bucuroiu, the president of the Alliance of Trade Unions in the Defense and Aeronautical Industry, told the BURSA newspaper: "The new fiscal measures hit the defense industry and the workers in this field drastically, due to the fact that no government in recent years has been able to cover this sector with contracts and orders so that it lasts. Due to this lack of production activity, employees are currently at risk of losing holiday vouchers, meal vouchers, seniority increases and other salary rights, as the granting of these benefits is conditional in the new law on the profit figure. However, more than 75% of state-owned companies in the defense industry are not covered by contracts and orders and operate at the limit of existence. All of these losses come as a blow to the more than 7,500 workers at the respective companies, as most defense industry workers are paid the economy's minimum wage. Unlike ordinary employees, the new law comes with a number of additional measures, increasing the composition of boards of directors from 3 to 5 or even 7 members, all of whom receive hefty allowances, and other measures that cause defense industry workers to work close for nothing and there is a risk that many of them will go abroad".

Considering the recent developments in the current regional context - the emergence of a conflict zone in the immediate vicinity of Romania and in the Middle East, as well as the existing labor shortage in the Defense Industry, trade unionists from the defense industry sent an address to the Prime Minister Marcel Ciolacu in which he requests the taking of measures regarding the implementation of the new fiscal law. More precisely, they want to exempt the defense industry from the provisions regarding the reduction of public spending.

In justifying their demand, the representatives of the employees of the defense industry show in that document:

"Companies from the defense industry are providers of defense services and products, both for the domestic market and for the foreign market, they have ongoing contracts concluded with the Ministry of National Defense, for the production of products of vital importance for the safety and defense of Romania, but and with external partners. Although economic entities in the defense industry are part of the category of national companies, commercial companies whose social capital is fully or majority owned by the state, they are not financed from the state budget, so that the salaries of employees burden the budget Of the state. They have an industrial or commercial character, carry out economic activities under normal competitive market conditions (competitiveness and profitability), seek to obtain a profit, bear the losses resulting from the exercise of the activities carried out, the economic activity being supported by self-financing".

The union leaders claim that the application of the provisions of law 296/2023 will lead to a decrease in salary income and implicitly to a lower purchasing power with implications regarding the "convulsions" of a social nature among employees in the defense industry (where the salaries are slightly above the salary gross minimum per country of 3,300 lei) and the impossibility of granting social expenses (birth benefits, funeral benefits, women's day, children's day, Easter and Christmas holiday benefits), meal vouchers, holiday vouchers and other rights of a monetary nature provided for in the collective labor contracts in force.

They specify that the result of the implementation of those provisions will stimulate the migration of qualified and specialized labor in the field of military equipment and products production, to the private area or outside Romania's borders where salaries are more attractive and putting state companies in an objective impossibility of recruitment and employment of qualified personnel through the lens of the non-existence of a state policy in related to the education and provision of qualified personnel for the labor market in our country in this field. Moreover, the quoted document says that the new tax measures will lead to the demotivation of employees in the defense industry and the massive retirement of employees who meet the minimum legal conditions.

In the text addressed to the head of the Government it is also said: "Replacing the labor force, specific to the field of the defense industry, requires a long time of training and professional training. The shortage of young labor is generated mainly due to the fact that wages are not attractive and the acute lack of schooling in the field. By applying the provisions of the new law, we will be unable to complete the ongoing contracts for the National Defense System Forces, as well as for export, contracts worth hundreds of millions of lei that have provided for considerable penalties for the delay or non-delivery of products. So that a large part of the economic operators will be put in the situation of suspending the activity due to the lack of qualified personnel in the field, which will implicitly lead to endangering the fundamental security interests of the country, but also to burdening the companies with devastating debts generated, mainly , of the impossibility of honoring ongoing contracts, their bankruptcy being imminent".

The first protests of employees from state companies in the defense industry will take place on Monday, November 6, between 12:30 and 16:00, Constantin Bucuroiu, the president of ASIAA, told us.