US embassy cable - 05TUNIS768

C O N F I D E N T I A L SECTION 01 OF 02 TUNIS 000768 
 
SIPDIS 
 
LABOR FOR ILAB HALEY 
STATE FOR NEA/MAG, DRL/IL, MEPI 
 
E.O. 12958: DECL: 03/30/2010 
TAGS: ELAB, PHUM, TS 
SUBJECT: TUNISIAN LABOR UPDATE:  UGTT SHOWS A MORE 
INDEPENDENT STREAK 
 
 
Classified By: Ambassador William J. Hudson for reasons 
1.4 (b) and (c) 
 
1.  (C) Summary. Labor negotiations between labor, private 
employers, and government take place every three years in 
Tunisia.  The three parties negotiate 51 separate collective 
bargaining contracts covering Tunisia's entire active work 
force.  Since 1990, Tunisia has had this unique system of 
unified contract negotiations to "preserve social peace." 
For the 2005 negotiations, the Tunisian Trade Union 
Confederation (UGTT) is seeking higher wages and a more 
equitable taxation situation for salaried workers in both the 
private and public sectors.  The private sector employers 
association (UTICA) is demanding greater worker productivity. 
UGTT and UTICA agreed on a timetable for the private sector 
negotiations on April 5.  Public sector negotiations between 
the GOT and UGTT start in May.  The 2005 negotiations are 
different from previous rounds: the trade union federation 
has split with GOT on foreign policy and joined ranks with 
the opposition parties on human rights issues.  It remains to 
be seen whether the GOT will drag out negotiations to punish 
labor for its growing independence with regards to politics 
and economics.  End summary. 
 
--------------------------------------------- ------ 
Opening Positions: Higher Wages, More Productivity, Economic 
Stability 
--------------------------------------------- ------ 
 
2.  (C) The Tunisian trade union confederation (UGTT) 
represents Tunisia's 3.5 million workers in negotiations on 
51 collective bargaining private and public sector contracts. 
 The  UGTT's opening position is that Tunisian workers need 
higher wages because they are worse off today than they were 
in 1990 (the baseline year for government statistics). 
UGTT's analysts examined wages and prices and found that 
consumer purchasing power has eroded in the last three years. 
 UGTT's analysis of tax burdens found that wage-earners are 
paying a disproportionate share of taxes.  Contrary to 
government figures, UGTT surveyors found the number of 
unemployed, especially among recent graduates, is increasing 
and the labor force is increasing in size.  The union also 
found that Tunisian worker productivity is rising (but not 
enough according to producers).  UGTT Secretary General 
Abdessalem Jerad wrote in his April 5 prepared statement at 
the start of private sector negotiations that the unions want 
to discuss not only higher wages but also how private firms 
recruit labor and workplace conditions with UTICA. 
 
3. (C) The private sector employer's association (UTICA) 
represents 16 industrial and agricultural sector groups. 
About sixty per cent of the Tunisian labor force works in the 
private sector firms under UTICA's umbrella organization. 
UTICA's opening position in the labor negotiations is that 
companies are facing difficult economic challenges.  In 
remarks to the UTICA National Council February 24, President 
Hedi Djilani said that wage negotiations are taking place 
within the context of impending market liberalization.  2005 
saw the elimination of country-specific textile quotas that 
favored Tunisia textile firms competing with Asian firms in 
the international market.  In 2008, Tunisia's EU association 
agreement will completely eliminate protective tariffs and 
customs duties.  Djilani indicated that UTICA members are 
seeking increased worker productivity and quality workmanship 
to increase profitability of their businesses.  In his April 
5 opening negotiation statement, Djilani specifically 
requested that negotiators take into consideration the dire 
straits in the textile sector and the impact of the rising 
price of fuel on operations. 
 
4. (C) The Government of Tunisia is represented by the 
Ministry of Social Affairs, Solidarity, and Overseas 
Tunisians in the labor negotiations.  About forty per cent of 
Tunisians work for the government as public service 
employees, educators, health care workers or for 
publicly-owned firms.  The government plays two roles in the 
labor negotiations: (1) employer in public sector labor 
negotiations and (2) mediator in private sector negotiations. 
 For the first time, the UGTT is questioning this dual role 
for government in labor negotiations.  UGTT Assistant 
Secretary General Mohamed Trabelsi told POLOFF that it is 
 
SIPDIS 
impossible for the GOT to act as a good faith mediator in 
private sector talks when it is the employer for public 
workers in talks being conducted simultaneously. 
Nonetheless, the government retains UTICA support for its 
continued presence in private sector negotiations. 
 
------------------ 
Politics and Labor 
------------------ 
5. (C) The trade union movement in Tunisia has a long history 
of political activism.  Tunisia's first organized labor 
leader was killed during the struggle for independence. 
UGTT's current Secretary General Jerad headed the Tunisian 
Teamster's Union in the 1970's.  The teamsters were on the 
frontlines of work protests against food price increases. 
For his leadership role in the "bread" riots and hunger 
strikes in the late 1970's, Jerad spent much of 1978-1980 in 
jail along with other labor leaders.  In 2000, the UGTT 
membership elected Jerad as Secretary General.  He inherited 
a complacent trade union movement, that was riddled with 
high-level corruption and characterized by authoritarian 
rule.  When contract negotiations started in 2002, the union 
was ill-prepared and the economic climate unfavorable for 
significant wage increases.  The national economy was 
sluggish -- due to a multi-year drought that hit the olive 
oil exports hard and a terrorist attack on Tunisia's prime 
tourist destination that discouraged visitors.  After six 
months of negotiations, workers won salary increases barely 
higher than the inflation rate at the time. 
 
6.  (C) Since 2002, Jerad has prepared the ground for the 
next round of negotiations.  He has strengthened his support 
by balancing political tendencies within the union with the 
reality of Tunisian politics.  The UGTT supported the GOT in 
its stand on Palestine and Iraq.  Union members marched in 
support of the people of Iraq in the run-up to the war.  Some 
former members, without official union blessing, even went to 
fight in Iraq, while UGTT leaders met with their Iraqi 
counterparts to rebuild the labor movement.  Similarly in the 
run-up to the October 2004 presidential elections, union 
members were represented on opposition lists, but the UGTT 
executive board issued a statement in support of President 
Ben Ali's candidacy.  When questioned on the UGTT position, 
Jerad reportedly said that it was the price for successful 
wage negotiations. 
 
7. (C) The 2005 negotiation is taking place in a different 
political and economic environment.  Ben Ali has told the 
people that the national economy is strong and Tunisia's 
social gains are a model for the rest of the Arab world to 
emulate.  However, Ben Ali has come under unusual domestic 
criticism for inviting Israeli Prime Minister Sharon to Tunis 
for the November 2005 World Summit on the Information Society 
(WSIS II).  The UGTT leadership and members joined opposition 
political parties and human rights organizations to protest 
the invitation to Sharon.  The UGTT executive board issued an 
usually strong statement that said that Ben Ali had broken 
the national social contract with the Tunisian people which 
stated that Tunisia would support the Palestinian call for a 
homeland.  During the protests, the union provided venues for 
organizational meetings and union members joined street 
demonstrations. 
 
8.  (C) Since March, Jerad has partially returned to his 
militant roots and has staked out a more confrontational role 
for the union.  A March 26 UGTT Politburo communique 
confirmed the union's independence from the government and 
called on employers to engage in direct negotiations. 
According to Trabelsi, the union's March regional elections 
in Kairouan, Sfax, and Gabes placed real labor militants in 
positions of power.  Trabelsi said that the new leaders are 
ready for the union to take the government to task on not 
only traditional labor issues such as wages and worker 
benefits, but also on elements of economic and political 
policy. 
 
9. (C) Comment:  This cycle of negotiations is now off to a 
rocky start with the UGTT at odds with the government's role 
both in the labor process and in political dialog with civil 
society.  Some Embassy contacts are convinced that the 
government may seek to punish the UGTT for its independent 
political stand on the Sharon issue.  It is doubtful that 
negotiations will break down completely -- there are those at 
high levels in government and in the labor movement who 
remember well the pre-1987 period of social unrest and labor 
activism and would not like to see a revival. End Comment 
HUDSON