The development and current situation of employers' organisations

Slovenia has a number of organisations representing employers' interests, both 'chambers' of which membership is compulsory, and more conventional associations with voluntary membership. In 2002, reforms are in prospect which will curtail or end the chambers' role in industrial relations and introduce criteria for assessing the representativeness of employers' organisations for the purposes of concluding collective agreements and representation on tripartite bodies. This article examines the development of employers' organisations and the current position.

The legal framework of the industrial relations system is changing in Slovenia. The most important of these changes will be the adoption of a new Law on Collective Agreements by parliament, most probably in the first half of 2003. However, as well as this legislative change, employers' organisations and trade unions also need to accept the principles of a democratic society and market economy. So far, trade unions have been more successful in accepting these principles - eg through the introduction of voluntary membership, the regulation of union representativeness and the introduction of more decentralised and confederal internal organisational structures and decision-making (SI0210102F) - than have employers' organisations. This is quite understandable in view of the prolonged process of privatisation. Nevertheless, in the processes of collective bargaining, participation, resolution of labour disputes and tripartite cooperation, trade unions need representative and legitimate partners on the employer side.

The term 'entrepreneur' is not new in Slovenia, but it is not synonymous with the term 'employer'. 'Real' employers have only begun to emerge with the emergence of 'real' owners - with the transformation of old socialist-era enterprises and to a lesser extent the emergence of new enterprises. The same is true of employers' organisations. Slovenia has retained a system whereby all enterprises and craftworkers are organised in 'chambers' (parastatal organisations), of which membership is obligatory. After the change in the country's socio-economic system, the mandates of these chambers were extended and they still function as employers' organisations, alongside 'authentic' employers' organisations. The chambers have two basic functions - employer functions (negotiating) and promotional functions (trade and business). This is contrary to International Labour Organisation (ILO) Conventions, which provide for freedom of association of employers and workers.

Main organisations representing employers' interests

At present, there are five organisations in Slovenia which represent employers' interests:

  • the Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS), of which membership is obligatory. At the beginning of the period of socio-economic transition, GZS was the only organisation representing employers and enterprises. It has two members on the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS)(SI0207103F);
  • the Slovenian Employers' Association (Zdruzenje delodajalcev Slovenije, ZDS), which was founded on 22 February 1994, after, on the advice of the ILO and the International Organisation of Employers (IOE), GZS came to the conclusion that a separate organisation for employers was the best solution. ZDS members are individual companies, regardless of the type of ownership, and join ZDS by their free choice. ZDS reformed in 2000 and established various sectoral sections in accordance with the standard classification of activities (energy, construction industry, chemicals etc). ZDS has members in all sectors and in all regions of Slovenia. At the beginning of 1997, it had 1,618 member enterprises, which employed around 60% of the private sector labour force and represented 49% of total equity in Slovenia. In a July 2002 presentation brochure, ZDS states that its member enterprises now employ more than 40% of all employed persons and represent more than 50% of total equity. ZDS has two members on the ESSS. Since 1 January 1999, it has had observer member status at the Union of Industrial and Employers' Confederations of Europe (UNICE). It cooperates with the ILO and all national employers' confederations in Europe. It is financed from membership dues, which depend on the size of the company. Among other issues, a current challenge for ZDS is how to attract foreign companies to become members;
  • the Chamber of Crafts of Slovenia (Obrtna zbornica Slovenije, OZS) of which membership is obligatory, is an offshoot of GZS which represents independent craftworkers and small enterprises and has one member on the ESSS;
  • the Slovenian Employers' Association of Crafts (Zdruzenje delodajalcev obrtnih dejavnosti Slovenije, ZDODS), which is not represented on the ESSS. Following the example of GZS's establishment of ZDS, ZDODS was established - then under the name Employers' Association OGISTTA- on 23 June 1994. At the beginning of 1997, it had 2,730 members; and
  • the Employers' Organisation of Slovenia (Delodajalska organizacija Slovenije, DOS), which is a small new employers' organisation. It has its headquarters in Maribor, the second largest city of Slovenia (the other four organisations all have their headquarters in the capital, Ljubljana). It is not represented on the ESSS.

Some employers' organisations nominate members (see below) to the ESSS, the National Council of the Republic of Slovenia (Drzavni svet Republike Slovenije, DSRS) (SI0207103F) and other important tripartite and multipartite bodies (such as the management bodies and assemblies of all social security institutions).

Legislative changes

It is evident that GZS, OZS and other compulsory-membership chambers will in the near future cease representing employers' interests in the industrial relations sphere, first of all in collective bargaining. The most important prerequisite to accomplish this is the regulation of representativeness criteria for employers' organisations. While such criteria for trade unions and their associations (as well as their status as legal persons) were determined almost 10 years ago, the issue of representativeness of employers' organisations has remained unresolved until now.

The old federal Law on Basic Rights From Labour Relations, which was passed in the former Yugoslavia in 1989 and is still in force, determines in Article 85 that a collective agreement is concluded by a competent trade union body and by a competent body of an appropriate Chamber of Industry and Commerce (GZ) or other associations in which organisations and employers are represented. This law: did not take into account pluralism of employers' organisations and trade unions and therefore neglected the problem of representativeness of both; neglected the fact that public service organisations are not GZ members; neglected the problem of who is the actual employer in public companies; and did not deal with possible problems when a private company is established by a foreign legal or physical person.

The Slovene Law on Labour Relations, dating from 1991, which is also still in force, states only that collective agreements relating to the whole of Slovenia and to selected economic activities may be concluded between trade unions and GZS, or any other general association or organisation of employers.

A draft Law on Collective Agreements issued in 1995 also did not regulate the representativeness of the employers' organisations. It determined the parties to collective agreement, stating that: on the employee side collective agreements are concluded by trade unions and their federations or confederations; and on the employer side they are concluded by individual employers and their associations. According to the draft, collective agreements which are concluded for the territory of the Republic of Slovenia covering employees in state bodies (administration) are on the employer side concluded by the government of the Republic of Slovenia or by the government-authorised ministry or other body authorised by law. Collective agreements for employees in activities where a part of the activity is performed as a public service, are on the employer side concluded by the government together with employers' associations.

However Article 38, chapter XI (transitional and final provisions) of the 1995 draft law states that, until a law regulating the association and representativeness of employers comes into force, the representative associations of employers are:

  • GZS and its branch associations;
  • OZS;
  • ZDS; and
  • employers' organisations which are authorised by law to conclude collective agreements, or are signatories of valid collective agreements concluded for the territory of the Republic of Slovenia.

From 1995 onwards, the draft Law on Collective Agreements was not elaborated further because it was intended that it should be adopted simultaneously with the new Law on Labour Relations. When parliament passed the new Law on Labour Relations in 2002 (SI0206101N), the draft Law on Collective Agreements was put on the table again. The Ministry for Labour, Family and Social Affairs (Ministrstvo za delo, druzino in socialne zadeve, MDDSZ) began to amend the draft law and a commission for its preparation, consisting of representatives of the government and the social partners, was formed in summer 2002.

The intention of the ministry was to integrate representativeness criteria for employers' organisations into the new law. However, it is equally possible that a separate Law on the Representativeness of the Employers will be elaborated, as such a law exists for trade unions (SI0210102F). In this way, the new Law on Collective Agreements could be adopted more quickly, as the most contentious issue of the representativeness of employers' organisations would be regulated separately.

General and sectoral collective agreements are thus currently concluded on the employers' side by GZS, OZS, ZDS and ZDODS. Tripartite agreements on pay policy are also signed by these four organisations.

On 16 February 2000, parliament passed the Law on Changes and Complements to the Law on the Chamber of Industry and Commerce of Slovenia. Article 13 of this new law, concerning the competence of the management body of GZS, states that, among other matters, the GZS management body 'discusses, takes initiatives and adopts viewpoints in the economic-social dialogue'. What this means for the future new role of the various chambers remains to be seen.

Employers' representatives in tripartite and multipartite bodies

It is obvious that the role of chambers with obligatory membership representing employers' interests is problematic in collective bargaining. However, their role is equally dubious when they represent employers' interests in various tripartite and multipartite bodies. A good example is the case of the ESSS.

Because there is no legislation regulating the representativeness of employers' organisations, there are no clear rules on which employers' organisations are eligible to be represented on the ESSS. At present, three organisations represent employers' interests in the ESSS - GZS, OZS and ZDS.

Discussion is currently underway as to whether GZS and OZS will in the future be allowed to have representatives on the ESSS. GZS and OZS agree that they will no longer be parties to collective agreements, but they want to remain represented on the ESSS. On the other hand, the trade unions believe that this will mean certain employers being represented twice by two separate organisations. Additionally, claim the unions, the imbalance of power between employers and workers will remain, with trade unions remaining the weaker party in terms of negotiating power and resources. Membership of trade unions is a matter of free choice, but membership of GZS and OZS is obligatory.

Another question is when, and under what criteria, the new employers' organisations (such as DOS) will be allowed to have representatives on the ESSS - especially because the number of representatives is limited. It may be that more than five organisations will fulfil the criteria for representation. The Confederation of Trade Unions of Slovenia Pergam (Konfederacija sindikatov Pergam Slovenije, Pergam) argues that GZS and OZS should not be entitled in future to take part in the ESSS's negotiating activities - ie the negotiation of agreements on pay policy (SI0206102F), comprehensive social agreements and other agreements. GZS and OZS should be allowed to take part only in discussions and consultations because, for example, agreements on pay policy concern collective agreements and GZS and OZS should not be allowed to exert any influence on collective bargaining.

Commentary

One of the main reasons why the situation regarding the role of GZS and OZS is changing so slowly is, that at the beginning of the 1990s, Slovene trade unions began to conclude intersectoral (general) and sectoral (branch) collective agreements and therefore needed strong organisations on the employer side to negotiate with. They probably feared that if GZS ceased to represent employers' interests no adequate counterpart would appear to replace GZS and OZS. Therefore, trade unions of all ideological persuasions tolerated this 'transitional situation' and this can also be seen as a part of the Slovene version of a 'soft transition' to the market economy. Today the situation seems to be different, especially because Slovenia will soon become an EU Member State. Thus these arguments can no longer serve as an excuse to postpone reforms.

In the words of an ILO researcher: 'In pluralistic and democratic societies the acceptance of more than one workers' and employers' organisation is a natural corollary of the application of the principle of freedom of association, the right to organise and the right to collective bargaining. These universal rights are considered to be the backbone of any democratic society and have been formulated in a number of international instruments, such as ILO Conventions 87 and 98 and theEuropean Social Charter ' (Union representativeness in a comparative perspective, G Casale, ILO-CEET Working Paper No. 18, ILO, Geneva, 1996). Therefore, in Slovenia these basic principles should be as quickly as possible put into practice by the regulation of the representativeness of employers' organisations. This will make possible the recognition of employers' organisations as the legitimate representatives of management interests and provide a clear and unambiguous legal framework for new employers' organisations to organise and function. (Stefan Skledar, on behalf of the Institute for Labour Law, University of Ljublana)

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