Collective bargaining procedures, structures and scope
Collective bargaining is a well developed and important part of industrial relations in Slovakia, with around half of the workforce covered by sector/branch level collective agreements. This feature outlines the legal provisions on bargaining procedures and structures, and looks at the current situation in terms of the number and level of agreements concluded and their contents.
Collective bargaining is one of the most important pillars of social dialogue in Slovakia, and below we examine the legal framework for bargaining procedures and structures, and the current situation in practice.
Collective bargaining procedures and structures
Collective bargaining in Slovakia is usually conducted at two levels:
- sector or branch level, where so-called 'higher-level collective agreements' (Kolektívne zmluvy vyššieho stupňa, KZVSs) are concluded between representatives of the appropriate employers' and trade union organisations; and
- enterprise or organisation level, where collective agreements are concluded between local trade union organisations and the management of the enterprise or organisation.
The 1991 Act on Collective Bargaining (No. 2/1991 in the Collection of Laws), as amended, provides for collective bargaining which regulate individual and collective labour relations between the employer and the employee, and the rights and duties of the parties concerned. Until 1 April 2002, collective bargaining was uniformly governed by the 1991 Act and by the Labour Code. This situation has now been changed through the implementation of new labour legislation (SK0206101N), which included the adoption of special acts on the civil and public services. Now, sectoral collective agreements and collective agreements at enterprises or organisation level may be concluded in the private sector and in the public service. In the civil service, only sectoral collective agreements are possible.
Collective bargaining is initiated by one of the parties (usually by trade unions) through submitting a written proposal to the other contractual party to conclude a collective agreement. The contractual parties have a duty to bargain, unless this goes counter to their legitimate interests. The parties have a duty to initiate negotiations in order to conclude a new collective agreement or to replace the existing one at least 60 days before expiry of the current collective agreement. A contractual party to which a written proposal is submitted must respond in writing (within 30 days at the latest) to the other party, commenting on those parts of the proposal which have not been accepted. From the date of submission of the proposal, the partners have at least 60 days for negotiation before either party is allowed to call in a mediator.
Collective agreements may improve upon the rights stipulated by the Labour Code (SK0207102F), other laws (SK0206102F) or government decrees, and their provisions cannot be at a lower level than existing labour law. An important principle provides that the minimum or maximum standards stipulated by relevant sectoral or branch-level collective agreements (KZVSs) as regards the agreed conditions of employment and wages, must be respected in collective agreements at enterprise or organisation level.
An enterprise- or organisation-level collective agreement can neither reduce the employees' rights already agreed at sector or branch level, nor grant more rights than granted by the sector or branch collective agreement if the latter sets the maximum figures. That means that only employment and wage conditions which are more favourable to employees than those laid down in the higher-level collective agreement may be agreed upon in an enterprise or organisation collective agreement. Collective agreements which do not specify their duration are presumed to last for one year.
A collective agreement is legally binding if its provisions do not contradict the respective minimum or maximum standards stipulated by law. The validity of sector or branch collective agreements is subject to their registration at the Ministry of Labour, Social Affairs and Family (hereinafter the Ministry). The relevant employers' association should submit the agreement to be registered within 15 days from the date it was signed. These collective agreements have to be deposited with the Ministry but their legal effect is not dependent upon such registration, apart from non-signatory employers that might be bound by extension (see below) following the deposit with the Ministry.
Extension of agreements
On the employers' side, collective agreements are binding only upon their signatories or upon members of signatory organisations - a list of the signatories' names should be attached to the collective agreement - though agreements are binding for employees who are not members of the signatory trade unions. Sector or branch collective agreements (agreed by multiple employers) may be extended to non-signatories in the same sector or branch by a simple administrative procedure at the Ministry. This extension process for a collective agreement occurs on the basis of a request made by the relevant trade union or employers' association, or on the basis of a suggestion by the Ministry. A proposal for the extension of a higher-level collective agreement may be submitted to the Ministry not later than six months before the agreement expires.
The Committee for the Extension of Sector Collective Agreements' Legal Obligations to Other Employers (hereinafter the Committee) takes the decision on the extension of a collective agreement. This Committee is established at the Ministry. Its members are appointed and dismissed by the Minister of Labour, Social Affairs and Family on a basis of a proposal presented by the Federation of Employers' Associations of the Slovak Republic (Asociácia zamestnávateľských zväzov a združení, AZZZ SR) and the Confederation of Trade Unions of the Slovak Republic (Konfederácia odborových zväzov, KOZ SR). The signatories have a duty to deposit a copy of the relevant agreement, and related decisions of arbitrators for five years after its expiration. The relevant trade union has a duty to acquaint employees with the agreement's contents within 15 days from its conclusion. The collective agreement can be extended to employers pursuing similar business activities under similar economic and social conditions as the employers that have concluded the agreement. Extension aims to prevent a disadvantageous situation for employees of those employers who are not in an employers' association, or to prevent an advantageous or disadvantageous position for employers to which the collective agreement does not apply.
Sectoral and enterprise-level collective agreements
Collective bargaining at the sector or branch level takes place between the relevant sector or branch trade union organisations and the appropriate employers' association (SK0208102F).
Given the current structures of the social partners, there are generally fewer trade unions bargaining at branch or sector level than there are employers' organisations For example, the influential Metalworkers' Union (Odborový zväz KOVO) bargains separately with the employers' associations for mechanical engineering, electrical technology, the metalworking industry, and foundries and forges. Similarly, the Slovak Trade Union of Textile, Clothing and Leather Industries bargains separately with the employers' associations for the textile and clothing industry and for the leather and shoe industry.
Sector or branch collective bargaining in Slovakia is widespread and, according to estimates, more than 50% of employees are covered by collective agreements concluded at this level. The available figures show that the number of sector or branch collective agreements has been gradually growing during the last decade. The total number of sector or branch collective agreements registered by the Ministry over 1995-2001 is shown in the table below.
|No. of collective agreements||23||51||56||55||23||29||30|
|No. of supplements to agreements||28||23||31||29||37||43||43|
Source: Report on the social situation of the population of the Slovak Republic in 2001, Ministry of Labour, Social Affairs and Family, 2002.
After a continuous increase in the number of branch or sector collective agreements, there has been a slight decrease in the last three years. The lower number of new collective agreements in recent years has been caused by the fact that collective agreements concluded in earlier years were often valid for a longer period (two, three or even more years).
Contents of bargaining
The scope of sectoral or branch collective agreements scope is usually focused on the following main topics.
- Cooperation and communication between the trade union organisation and the management. This covers matters such as: employers’ duties to consult, inform and decide in cooperation with the union; confidentiality clauses; and employers' support for trade union activities by providing them with technical facilities etc.
- Employment and working conditions. This covers matters such as: employment contracts and termination of employment; principles of redundancy policy in collective redundancies; working time and working time schedules; and holiday and paid leave.
- Wages and remuneration. This covers matters such as: the wage system and minimum wage tariffs; payment for working overtime and for working on holidays; extra payments for difficult and risky working conditions and night work; and severance payments in the event of collective redundancies.
- Occupational safety and health. This covers matters such as: employers' duties and cooperation with trade unions in safety and health issues; preventive and corrective measures to improve working conditions and to reduce risk at work; and the establishment of trade union safety and health delegates in companies.
- Human resource development and other social issues. This covers matters such as: training and human resources development activities; and the creation and utilisation of the Social Fund in enterprises (the Social Fund is financed - under Act No. 152/1994 in the Collection of Laws, as amended - by a minimum levy of 0.6% of paybill, and is most commonly used to subsidise the cost of meals provided for employees).
- Resolution of conflicts between management and trade unions. This covers the procedures to be applied in the event of serious disagreements between the social partners,
Collective agreements at enterprise and organisation level cover practically the same issues. Some reduction in bargaining scope applies in the civil service, where only sectoral collective agreements are concluded (SK0206102F).
The actual scope of the topics covered by collective bargaining is illustrated by the findings of a survey conducted by the Research Institute of Labour, Social Affairs and Family (RILSAF) in 2000. This survey includes an analysis of 56 sectoral or branch collective agreements, concluded for the period 1999–2003, which found that wages, other remuneration issues and rules for managing collective redundancies were the primary issues covered. Vocational education and training issues were included in about 40% of the agreements analysed. The agreed provisions were often formulated in a general manner and sometimes regurgitated the provisions of the Labour Code that set out the employer's duties and employees' rights regarding social issues.
An important topic in collective bargaining is employee participation. Trade unions have rights to information and consultation on some issues. These rights are stipulated by the Labour Code and are applied, as a rule, prior to dismissals of workers and significant organisational changes. According to the Labour Code, employers should also:
- decide jointly with the trade union on utilisation of the Social Fund and on the introduction of working time schedules;
- consult with the trade union on terms of employment, especially those of women taking care of children and of young and disabled people, on improvements in working conditions and health and safety issues, and on any other measures concerning considerable numbers of employees; and
- inform the trade union about the enterprise’s economic results and its development programmes and perspectives.
The trade union participation rights set out in collective agreements - sector/branch and enterprise/organisation - exceed the abovementioned Labour Code standards. For example, union representatives may participate in decision-making on issues such as application of rules on women’s night work, setting the company's holiday dates, and dismissal of union delegates. Trade unions are very often provided with information on labour costs and wage developments, organisational changes and new and terminated employment contracts.
Worker participation is generally secured for all employees of an organisation, but until recently only the trade union organisation was entitled to represent employees' rights and interests. This unfavourable situation in terms of employee participation and social dialogue in enterprises where no trade union organisation is established was changed in 2002. From 1 April 2002, new labour legislation (SK0206101N) provides for the election of works councils in all enterprises and organisations where no local trade unions are established. Works councils are legitimate representatives of the staff in social dialogue with the management. They have rights to information, consultation and control, but no rights to collective bargaining and joint decision-making.
A tradition has already been created in Slovakia as regards collective bargaining at sector, branch and enterprise level. Collective bargaining today utilises the previous experiences of the social partners involved in the social dialogue process. During the past five years many effective working contacts have been developed between Slovak employers' and trade union representatives and experts and their partners abroad, especially in the EU Member States and in the International Labour Organisation. These working contacts have significantly contributed to the development of current collective bargaining at different levels.
Several EU Phare projects have also been implemented in order to develop the social dialogue between employers and trade unions. In 1998-9, the Phare project on 'Development of regional social dialogue' was successfully implemented. In 2001, a Phare project focusing on the 'Enhancement of sector collective bargaining' began, and this project still continues. These projects have also included special training courses in order to develop the negotiation skills of the social partners involved in collective bargaining.
Quite stable trade union and employers' bargaining teams have been established at all negotiation levels. Usually, each party has a team of three-five members and each team can invite its experts to provide the necessary special consultations and advice. The negotiators on both sides are usually well prepared for negotiations and have developed strategies, especially when dealing with wage bargaining.
Usually, the first step in collective bargaining - ie submitting proposals for bargaining - is taken by trade unions. This allows trade unions to have a more advantageous position at the beginning of negotiations. According to the current rules, employers should respond within a specified time to the unions and, in this respect, they should prepare concrete statements and positions regarding the topics in question. Employers' responses are sometimes delayed and in some cases are very brief, and do not provide concrete arguments. Regardless of whether this is part of the negotiation strategy or due to other reasons, this situation interferes with the negotiation process.
The relations between trade unions and employers' representatives are perceived as fair, but negotiations are hard and it is often not easy to conclude commonly accepted collective agreements. Sometimes, there is a problem with long-lasting rounds of negotiation, which slow down the bargaining process. Such situations may arise out of a lack of authority among the respective negotiators to take final decisions. Sometimes, they could also be a part of the negotiating strategy of the social partners.
The most difficult negotiations are obviously those over pay and pay increases, where the positions of social partners are usually most distinct. Although these negotiations are usually very difficult, the social partners have so far reached compromises acceptable to both sides. According to the available statistics, after three years of continuous decrease, real wages finally increased in 2001 and this fact may confirm the efficiency of wage negotiations. Another indicator of the efficiency of bargaining is a decrease in the number of disputes in relation to the collective bargaining process. In this respect, there are no data on significant extreme actions such as strikes. (Ľudovít Cziria, RILSAF)