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Slovakia: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe

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The electricity sector demonstrates stability in production, distribution and sales in the past two years. Increased support for RES-based production caused a solar boom of photovoltaic plants with marginal employment impact and outside of collective bargaining coverage. Despite the limited role of the state in energy firms and a limited direct influence of sector-level social partners on energy policy, the sector shows a remarkable stability in the social partner structure and bipartite collective bargaining. The crisis only had minor consequences on employment and working conditions in the sector. Collective agreements continue securing wages and working conditions exceeding the national average.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

The official Energy Policy of the Slovak Republic is part of the governmental decree No. 29/2006. Policy preference is given to nuclear energy and a greater use of renewable energy sources (RES). The share of RES is expected to reach 24% in 2020 and 27% in 2030. The policy does not count on the use of new fossil sources for electricity production in the future.

In the long run, the government aims at maintaining an energy mix of nuclear power, natural gas and renewable sources. The governmental tools to meet the targeted energy mix derive from the Act on Energy and range from a price-setting mechanism for electricity generated from RES, through approvals for construction of new power plants to direct participation in investments.

There are investments into the distribution grid and into gas turbine power plants to strengthen electricity generation from natural gas. Connections undergo modernization in order to increase the capacity and security of the distribution grid, and to foster development of cross-border distribution networks in order to connect isolated markets.

The Ministry of Economy’s (MH SR) stance aligns with the strategy of the European Union. All energy sources are treated equally and evaluated from the perspective of effectiveness and impact on the environment.

The Ministry of Economy reports efforts to stabilize employment and invest in training and skill upgrading in all subsectors of electricity production. Examples include:

  • stabilizing employment in the Horná Nitra fossil mining area (around 12,000 workplaces)
  • a social plan for 2,000 nuclear experts upon closing one section of the nuclear power plant Jaslovské Bohunice (2006-2008)
  • perspectives to increase employment in the nuclear power plant Mochovce upon opening additional operation blocks (2013-2014)
  • new workplaces in RES-based production

In electricity distribution and sales, employment is relatively stable since 2007. In large distribution/sales companies, annual employment change ranged between 0.7 and 1.7% of the total workforce. Employment increase has mainly affected customer services. Firms also report a decline in voluntary employee fluctuation.

1.2. Government policy for increase of the share of renewable resources according to the RES directive

Construction subsidies for electricity generation from RES are granted from EU’s structural funds. Other subsidies are granted in the agricultural sector to biogas stations generating electricity.

According to the SME newspaper, the former Minister of Economy proposed a policy revision due to a disproportionate use of subsidies (high purchase price despite declining investment costs) for photovoltaic energy. Such regulation increased electricity prices for end users.

The solar boom ended in July 2011 after the introduction of an amendment to the Act on Support for RES, which limited the use of subsidies for photovoltaic plants. Only small photovoltaic plants on buildings are now eligible for subsidies through a higher guaranteed electricity purchase price.

The main form of support is through price regulation (a 15-year price guarantee for RES-based electricity) and an obligation of distribution companies to purchase electricity from RES producers.

The governmental decree No. 383/2007 on the Strategy of Improved Use of RES in the Slovak Republic acknowledged hydroenergy as the most frequently used RES, covering more than 98% of RES-based electricity generation in Slovakia.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

Recent studies are not available. Older studies assessed the impact of privatization on employment (late 1990s) and the impact of the closure of parts of the nuclear power plant in Jaslovské Bohunice on employment (2006-8). According to representatives of Západoslovenská energetika Company and small firms engaged in RES-based production, effects of unbundling and shifts from traditional sources to RES on employment are marginal.

Transformations in the sector bring new challenges on the required skill mix of workers. There is a growing pressure to adjust the education system to the skill mix needed for RES operation.

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

Modifications to the energy policy are discussed with social partners in the national tripartite Economic and Social Council (HSR). Trade unions claim that sectoral tripartism ceased to exist in early 2000s due to a lack of interest of involved parties, especially the state, upon privatization in the energy sector. Trade unions initiated a revival of sectoral tripartism under the social-democratic government (2006-10). Functioning bipartism served as a structural obstacle and contributed to no success of such revival.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

Slovenské elektrárne

4,919*

31.12.2010

Private

Zvolenská teplárenská

173*

31.12.2009

Private

E.ON Elektrárne

30

2011

Private

Tepláreň Košice

522

2010 average

Private

NUCLEAR

Slovenské elektrárne

4,919*

31.12.2010

Private

HYDRO

Slovenské elektrárne

4,919*

31.12.2010

Private

Vodohospodárska výstavba**

229*

31.12.2010

Private

Zvolenská teplárenská

173*

31.12.2009

Private

WIND

Cerová Municipality

0

 

Private

BIOMASS

Slovenské elektrárne

4,919*

31.12.2010

Private

Martinská teplárenská

247*

31.12.2010

Private

PHOTO-VOLTAIC

n.a.

     

n.a.

     

n.a.

     

n.a.

     

* Number of employees per company. Employment per source of production not

available.

** Operated by Slovenské elektrárne

Source: Ministry of Economy, websites and annual reports of respective companies.

Slovenské elektrárne (SE) is the largest electricity producer in Slovakia. With 5,749 MW gross power, SE operates 34 hydroenergy plants, 2 nuclear power plants, two fossil power plants and two photovoltaic power plants. The structure of SE-produced electricity is 66.71% nuclear, 20.99% hydro and 12.3% fossil. SE’s market share accounts to 70%.

Other producers engage in a dual production of electricity and heat using fossil/biomass/hydro sources. The largest co-generating producers are Zvolenská teplárenská, Martinská teplárenská and Tepláreň Košice. Wind-generated electricity in Slovakia is underdeveloped with two fully automated wind parks without direct employment. The use of photovoltaic energy boomed in recent years. The business landscape consists of a fragmented structure of small enterprises and municipalities without a clear identification of three largest producers. Photovoltaic plants are fully automated and without direct employment.

2.2 Please provide an overview of the current oganisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

Electricity distribution is regionally organized. Západoslovenská energetika (ZSE) covers Western Slovakia, Stredoslovenská energetika (SSE) covers Central Slovakia, and Východoslovenská energetika (VSE) operates in Eastern Slovakia. In all three companies/groups, the state maintains its control through a 51% share ownership. Foreign minority owners – E.ON (ZSE), Electricité de France International (SSE) and the RWE Group (VSE) – possess full management responsibility.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

ZSE Distribúcia

daughter of

ZSE

114

1,297

31. 12 2009

31.12. 2009

private

SSE - Distribúcia

daughter of

SSE

168

1,089

31.12. 2010

31.12. 2010

private

Východoslovenská distribučná

daughter of

VSE

92

1,389

31.12. 2010

31.12. 2010

private

Source: annual reports of respective companies.

2.4. Were there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

Important revisions of employment occurred upon privatization and foreign investors taking over management. Another occasion of employment decline has been the closure of parts of a nuclear power plant in Jaslovské Bohunice in 2006 and 2008. After 2008, employers attempt at stabilizing their workforce size with a general trend of slight decline in employment. Unbundling activities did not have any relevant consequences on employment and industrial relations. Industrial relations are stable since early 1990s and did not undergo changes due to crisis, privatization, or unbundling.

3. Industrial relations in the electricity sector: Actors

1. Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation

Electricity production with

TOP 3

PRODUCING COMPANIES

(largest 3 in market share)

Membership to employers organisation

(indicate the name of the relevant employers organisation)

Trade union presence per sub-sector*

(indicate the name of trade union(s) and the level of their membership in this subsector companies)

FOSSIL FUELS

Slovenské elektrárne

Zväz zamestnávateľov energetiky Slovenska (ZZES)

Združenie odborárov energetiky Slovenska (ZOES)

59.36%**

Zvolenská teplárenská

ZZES

Chemicko-energetický odborový zväz (ECHOZ)

60-80%**

Tepláreň Košice

ZZES

NUCLEAR

Slovenské elektrárne

ZZES

ZOES

59.36%**

HYDRO

Slovenské elektrárne

ZZES

ZOES

59.36%**

Vodohospodárska výstavba

Združenie zamestnávateľov vo vodnom hospodárstve na Slovensku (ZZVH)

Odborový zväz Drevo-Lesy-Voda

Zvolenská teplárenská

ZZES

ECHOZ

60-80%**

WIND

Municipality of Cerová and Green Energy Slovakia

n/a

n/a

BIOMASS

Slovenské elektrárne

ZZES

ZOES

59.36% **

Martinská teplárenská

ZZES

ECHOZ

60-80% **

And in the distributing companies

Distribution GRID

companies

ZSE

ZZES

ECHOZ

60-80%**

SSE

ZZES

VSE

ZZES

* Only higher-level trade union federations listed. E.g. nine company-level trade unions are present in subsidiaries of Slovenské elektrárne, seven of which is affiliated to ZOES. The table only reports affiliation to ZOES.

** Unionization rate in the respective trade union federation in the electricity sector. Membership densities across subsectors and companies n/a.

Source: ZZES, ECHOZ, Vodohospodárska výstavba.

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

There are two major trade unions in electroenergy: ZOES and ECHOZ. ZOES operates mainly in the largest producer and affiliated producers in fossil/nuclear/RES production, whereas ECHOZ is strong among co-generating producers (heat and electricity, fossil/RES) and in the distribution subsector. The crisis did not affect trade union representation.

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

The Energy-Chemistry Trade Union Federation (Energeticko–Chemický odborový zväz, ECHOZ), was founded in 2009 after a merger of the Slovak trade union federation of energy workers (Slovenský odborový zväz energetikov, SOZE) and the Trade Union Federation Chemistry of the Slovak Republic (Odborový zväz Chémia SR, OZCH SR).

The structure of sector-level organization of employers did not undergo any major changes. The Federation of Energy Employers of Slovakia (Zväz zamestnávateľov energetiky Slovenska, ZZES) operates since 1991.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

No actors were established. The industry is covered by established actors.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

Large firms expanding into new production sources already have firmly established trade union presence and are affiliated to the sector-level employers’ association. Other RES-based producers are small enterprises with marginal employment, therefore outside the interest of social partners. There were no initiatives yet to extend representation into the emerging parts of the sector.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

Bargaining in the electricity subsector has been regular and stable in the past 20 years. Collective agreements are concluded at the multi-employer and single-employer level. The single relevant employers’ association ZZES concludes separate multi-employer collective agreements (kolektívne zmluvy vyššieho stupňa, KZVS) with each of the dominant trade unions (ZOES and ECHOZ). Due to a trade union division across relevant firms, the largest producers and the largest distributors are covered by separate multi-employer collective agreements. Large producers are covered by the agreement between ZZES and ZOES, while some producers and all large distribution companies are covered by the agreement between ZZES and ECHOZ.

If an employer is member of ZZES, which concluded a multi-employer collective agreement on behalf of its members, then all employees of the respective employer are covered. The coverage rate in the electricity subsector is high, as most employment is concentrated in firms affiliated to ZZES. Coverage according to different subsectors is not relevant, as the largest producer (covered by sectoral multi-employer and company-level collective agreements) engages in several production sources (nuclear/fossil/hydro/RES). Some new employers in the co-generating steam-gas electricity production are not (yet) covered (e.g. a recently opened steam-gas power plant in Malženice with 30 employees). Employment in other producing firms, which are mostly small companies engaging in RES-based production, is marginal and outside of collective bargaining coverage.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

Both multi-employer collective agreements stipulate better working time conditions than the national average/standard. The ZZES-ZOES collective agreement stipulates a working week of 37.5 hours (national standard is 40 hours/week). The ZZES-ECHOZ collective agreement stipulates a working week of 37.5 hours and 36 hours in workplaces with non-stop operation.

In pay, multi-employer collective agreements stipulate tariff scales to be specified in company-level collective agreements. The general trend is that collectively regulated wages exceed national averages, but there is a difference between larger and smaller firms in the electricity subsector. The average wage in larger producing and distributing firms not only exceeds the national average (euro 763), but also the industry average (euro 805, Slovak Statistical Office figures for January-August 2011). Average wages in smaller producing firms (i.e. in the co-generating firms) corresponds with the industry average. The Slovak Statistical Office reports an average wage in the power sector of euro 1,353 (average for January-August 2011).

The trend in the provisions of sectoral multi-employer collective agreements corresponds with the above evidence in exceeding national standards in working time and national average in wages. Sectoral collective agreements establish minimum standards, which can be exceeded in company-level agreements. However, according to the ECHOZ trade union, the gap between company-level agreements and sectoral agreements in wages is closing especially in smaller firms.

4.3. Cooperation between the social partners and government

No social dialogue or social concentration in the electricity sector took place since 2008. The state handed over management responsibilities in energy companies to private investors upon privatization. Even in state-owned companies the direct role of the state remains marginal. All influence on the energy policy happens through the legislative process, discussed in the tripartite HSR between national-level social partners.

No bipartite or tripartite body dealing with specific issues of the electricity industry was created since 2008. The engagement of social partners in the sector happens exclusively through their comments on proposed legislation in the national tripartite HSR.

The National action plan has been subject to discussion in the national tripartite HSR in 2011. The extent of social partners’ engagement will depend on government preferences after the upcoming early national elections in March 2012.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

The ECHOZ trade union’s view is that there is an effort of employers to gradually reduce employment by a small portion of the workforce each year. Besides other modes of reduction (dismissals, early retirement), an increasing use of overtime is functional to gradual workforce shedding. From the overall legally stipulated overtime work (400 hours/year), the employer may unilaterally decide over 150 hour/year. A collective agreement can increase the unilaterally stipulated working time to 250 hours/year, but trade unions do not agree with such an increase and criticize the fact that employees are increasingly under pressure to work overtime.

ECHOZ views that the reduction in learning and training (e.g. language courses) in the post-crisis period is the most notable sign of the crisis in the energy sector. Training/learning activities became more target-oriented on employees in need. Other training, e.g. expert training for fieldwork in power energy or workplace health and safety training is required by law and cannot be reduced.

The employer organization ZZES maintains that firms try to stabilize employment and match the extent of production/services with an optimal size of employees. More significant reduction of employees derived from privatization in the pre-crisis period and is not related to the economic crisis. Offering training/education to employees is a necessity in the electricity subsector in order to maintain the quality of experts working in the subsector. The crisis did not have an extensive impact on the extent of training.

Alternative forms of employment, e.g. agency work, are almost non-existent in the electricity subsector due to required qualifications and expertise of employees. Outsourcing is relevant only for support services (cleaning and related services).

5. Commentary

The sector underwent privatization and unbundling of production, distribution and sales in the past decade. While unbundling strongly affected the formal property structure, only a few new actors entered the business landscape using traditional resources. Existing large firms in electricity production and distribution continue operating in sales through their daughter companies. The result is a dense network of interlocking private enterprises where the role of the state in the management is marginal.

Increased support for RES in the past years brought a solar boom in photovoltaic power plants. The landscape is constructed of a high number of small private firms with marginal employment and outside of collective bargaining and coverage of collective agreements. Given the marginal impact of RES-based production on employment, social partners do not extensively engage in extending their activities in the newly emerging subfields of the sector.

Trade unions criticize the lack of interest of the state in maintaining a sector-level tripartite social dialogue after the state handed over management responsibilities in large firms to foreign investors. However, unions admit that efforts to re-establish sectoral tripartism failed due to the stability and continuity of the bipartite social dialogue, which covers all relevant issues in the sector.

Marta Kahancová, Central European Labour Studies Institute

Page last updated: 15 November, 2012
About this document
  • ID: SK1202029Q
  • Author: Marta Kahancová
  • Institution: Central European Labour Studies Institute
  • Country: Slovak Republic
  • Language: EN
  • Publication date: 15-11-2012