All work and no pay for thousands in the Balkans

All work and no pay for thousands in the Balkans

ZITISTE Serbia - Complaining they had worked without pay for months late last year, employees of the Serbian farming company Agroziv staged a short strike in January. Why should they work for no money, they said. The company, a poultry producer in the north of the country, was short of cash and pleaded for more time to pay wages, workers said.

"The management told us, 'Please be patient for another two weeks,'" said Vesna Srdic, a packaging worker with the firm. "We waited and nothing happened. Some workers grew so desperate they were buying bread on credit from local bakers. But after some months even bakers refused to give them bread for nothing."

Patience ran out on June 4. Using chains and padlocks, Agroziv employees locked every door and gate they could find on company property. Then they blocked a main road leading to the border with Romania for two hours.

"My salary is 29,000 dinars ($343) a month and I haven't received a penny since January. I'm drowning in debt," Milica Milkovic, 52, said last month. The mother of two, dressed in a faded red T-shirt was waving a banner that read, "We want answers." Agroziv did not respond to requests for comment.

Such scenes are surprisingly common in the Balkans, where wages are often the first expense companies freeze when times are tough. Legal loopholes, inefficient courts and poor financial supervision allow struggling firms to skip paying wages, sometimes for months on end.

Since jobs are scarce, thousands of workers in the countries spawned by Yugoslavia's bloody breakup in the 1990s regularly work for nothing - in the hope that employers will eventually pay up. The phenomenon is growing in some places and contributing to social unrest in the region. Earlier this year protesters in Bosnia torched government buildings up and down the country. Protests in Croatia and Serbia have also become common, though not violent.

LACK OF CAPITAL

Most former Yugoslav republics, including European Union members Slovenia and Croatia, have yet to overcome problems born of the business practices they inherited in the 1990s.

In socialist Yugoslavia, the state owned all medium-sized and large companies and controlled salaries through a central payments system. With the federation's collapse, new and newly privatized companies tried to expand without much capital. Short of cash, some began delaying payments to suppliers, tax offices and workers. State-owned firms and institutions began doing the same, exploiting a lack of financial oversight to pick and choose their obligations.

In Croatia, the authorities are now trying to enforce more financial discipline. Finance Minister Boris Lalovac, speaking at a conference in April, said employers were failing to pay mandatory health and pension contributions for more than 200,000 workers among the country's 4.4 million people.

Kresimir Sever, a union leader in Croatia, estimates some 70,000 workers in Croatia are facing delays in wages. "In most cases workers wait too long before filing for bankruptcy (of their company), figuring they are better off having any kind of job and no salary rather than losing everything," said Sever. "In time, the company's assets melt and when the bankruptcy process begins, they (the workers) really do end up with nothing."

The situation is similar in Serbia, the most populous country to emerge from Yugoslavia with 7.2 million people. Ranka Savic of Serbia's Association of Free and Independent Unions said that at least 70,000 workers have not received wages for six months or more.

The country, which this year began talks on joining the EU, still has 153 state companies, partly kept afloat by annual subsidies worth more than $1 billion.

In February, some 1,400 workers at the state-owned Jumko clothing manufacturer from the southern city of Vranje protested about unpaid wages by blocking Serbia's main north-south highway for a day. They claimed they were owed seven months' wages and mandatory health contributions.

Two months later the Jumko workers received 5,000 dinars ($59) each, the government said. In May the workers again blocked the highway to demand all overdue wages and social benefits, as well as direct talks with the government. There has been no progress since then. Officials at Jumko did not respond to phone calls and emails seeking comment.

Serbia's new government, which took office in April, has vowed to reform laws on labour, bankruptcy and privatization to improve the business climate and attract investors. It has also pledged to end subsidies for state-owned enterprises. Draft laws are being debated; the government says it hopes to adopt them by the end of July.

Slovenia, which joined the EU in 2004 and the euro zone in 2007, has seen the number of workers not receiving salaries rise steadily over the past five years. There were 3,601 cases of delays, partial payment or non-payment of wages in 2013, up from 843 in 2008, according to state Labour Inspectorate data provided to Reuters in June by the trade union ZSSS.

Goran Lukic, a spokesman for ZSSS, said "several thousand people" are not receiving their salaries, or receiving them with a delay, and the number is on the rise. He said the problem of unpaid wages was particularly common in construction and services such as office cleaning.

The plight of most unpaid employees goes undetected until they go on strike. Workers still prefer to keep turning up, despite not being paid, rather than lose their jobs, said Belgrade sociology professor Zoran Stojiljkovic. "A common feature of the entire Western Balkans is the people's capacity to put up with a lot of things for a long time. The limit of endurance is breached only when one can no longer pay the bills," he said.

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