Compliance with principle of free collective bargaining questioned

In summer 2005, the issue of the compliance of Slovenian labour law with the principle of free collective bargaining has again been highlighted by a government proposal to ratify ILO Convention No. 154 on the promotion of collective bargaining, and the preparation of a report on national implementation of the European Social Charter (which includes the provision that 'all workers and employers have the right to bargain collectively'). Concerns centre on the involvement in bargaining of employers' bodies with compulsory membership and legislative provisions that essentially make the conclusion of sectoral collective agreements compulsory.

The Ministry of Labour, Family and Social Affairs (Ministrstvo za delo, druzino in socialne zadeve, MDDSZ) has recently proposed the ratification of the 1981 International Labour Organisation (ILO) Convention No. 154 on the promotion of collective bargaining. At the same time, the Ministry is preparing Slovenia's fifth report on the 'hard core' provisions of the Council of Europe's 1996 European Social Charter (Revised) (ESC). This report includes comments concerning compliance with Article 6 of the ESC, which states that 'all workers and employers have the right to bargain collectively'. Both the proposal to ratify the ILO Convention No. 154 and the ESC report will be discussed at the September 2005 session of the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS) (SI0207103F), the country's central body for tripartite cooperation (the deadline for the submission of the report was 30 June 2005).

The main factor that hindered ratification of ILO Convention No. 154 in the past was the former Law on Labour Relations (the 'old' LLR). The old LLR provided for the obligatory conclusion of collective agreements in order to regulate specific aspects of workers’ rights (SI0212101F). This was because those matters on which no agreement could be reached during the preparation of the legislation were shifted to the competence of collective agreements. This was regarded as a basic deficiency of the old labour legislation. The new LLR (SI0206101N), which came into force on 1 January 2003, should no longer include such obligations, but appears to do so to some extent (see below).

Furthermore, parts of the old legislation on collective agreements are still in force and are not in accordance with ILO Conventions and Article 6 of the ESC, notably because they do not provide for a voluntary system of collective bargaining. Another basic deficiency of this old legislation, which was adopted in the former Yugoslavia, is that it contains only a very small number of provisions concerning the system of collective bargaining, in terms of the content, form, procedures, parties to the collective agreements etc. Therefore a new Law on Collective Agreements (LCA), which is still in preparation, needs to be adopted to define a new system of collective bargaining (SI0212101F). A draft LCA was submitted to the Slovenian parliament on 8 March 1995, but was then suspended because it was planned to pass it simultaneously with the new LLR. It has now been in the parliamentary procedure since 1994. When parliament passed the new LLR in 2002, the suspension of the draft LCA was lifted and a commission for its further elaboration was formed, composed of representatives of the government, the employers and the trade unions. The future new LCA should provide for a voluntary system of collective bargaining based on autonomous employers' organisations and trade unions with voluntary membership.

Obstacles hampering adoption of the new LCA

An EU Phare project entitled 'Enhancement and development of social dialogue in Slovenia' began in September 2002 and was concluded in April 2004 (SI0411303F). The most important aspect of the project was support for the preparation of the new LCA. According to the authors of the project's final report, the LCA will be a cornerstone of social dialogue in Slovenia, not least because of its potential to enhance the sectoral level of collective bargaining.

The most significant conclusions of the Phare project concern the employers’ role in the tripartite social dialogue and bipartite collective bargaining. The project experts found that, unlike the situation in Slovenia at present, chambers of industry and commerce and similar bodies based on mandatory membership are practically never represented on economic and social councils in other EU Member States and, most importantly, do not represent employers’ interests in collective bargaining in these countries. An exception is Austria, but the project experts found that, for a number of reasons, this country should not be used as a point of reference. Its unique social dialogue system can neither be copied nor implemented piecemeal.

The compulsory-membership Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS) (SI0211102F) strongly opposed the project's conclusions. However, these conclusions are in accordance with the opinions of the European Commission's Directorate-General for Employment, Social Affairs and Equal Opportunities, and of both the Union of Industrial and Employers’ Confederations of Europe (UNICE) and the European Trade Union Confederation (ETUC). GZS wanted to continue to represent employers’ interests in collective bargaining (TN0311101S). This was the main obstacle to the adoption of the new LCA. It seems that the new government that came to office in late 2004 intends to solve this and other problems in a radical way by introducing voluntary membership of GZS (SI0506302F). However, in a letter to Janez Jansa, the Slovenian Prime Minister, Christoph Leitl, the president of the Association of European Chambers of Commerce and Industry (EUROCHAMBRES) and of Austria's Federal Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) has 'expressed deep concern about the development of events concerning the chamber system in Slovenia'.

Sectoral collective agreements still compulsory

The old LLR determined obligatory conclusion of collective agreements in order to regulate specific aspects workers’ rights (SI0212101F). Regarding certain rights, the old LLR required obligatory supplementary regulation in collective agreements. This meant that certain issues had to be additionally regulated in collective agreements, and such agreements were thus obligatory.

The two collective agreements that supplementarily regulated these issues were the general collective agreement for the private sector and the general collective agreement for the public sector, both intersectoral national collective agreements. When the new LLR (SI0206101N) came into force on 1 January 2003, the private sector general agreement lost significance and will most probably gradually cease to exist. Sectoral (branch) collective agreements thus became the most important ones.

In order to comply with Article 6 of the ESC, stipulating that 'all workers and employers have the right to bargain collectively', and with the ILO Convention No. 154, labour legislation should not provide for the obligatory conclusion of collective agreements in order to regulate specific workers’ rights. However, the new LLR still determines obligatory supplementary regulation in sectoral (branch) collective agreements in Articles 128 and 129.

Article 128 (on the 'amount of extra payments') states as follows:

Article 129 (on extra payment for years of service) states as follows:

Many experts call attention to the fact that, according to the new LLR, the conclusion of sectoral collective agreements is thus not a matter of free will of the parties to the agreement and that this violates the principle of free collective bargaining (see, for example, Legal Practice No.42, November 2002; and New LLR with comments and factual index, Primath, Ljubljana, 2002). In this way, the LLR does not directly guarantee workers a certain level of the abovementioned extra payments. On the basis of such general provisions an individual worker can not enforce these rights. Therefore the LLR prescribes a more detailed regulation of these rights in sectoral collective agreements.

Commentary

In the introduction to her publication entitled The LLR with introductory explanations (Official Gazette of the Republic of Slovenia. Ljubljana, 2002), Natasa Belopavlovic stressed that the abovementioned obligatory regulation of certain pay supplements in sectoral collective agreements conflicts with the principle of free collective bargaining. Ms Belopavlovic was the main author of the new LLR. At the time when the new LLR was negotiated and adopted, during the term in office of the former government, Ms Belopavlovic was the Secretary of State responsible for labour legislation at the MDDSZ. Despite her opinion, the new LLR was adopted in its current form by the parliament.

One of the possible explanations for this is that certain social partner organisations wanted to 'protect and promote' sectoral collective agreements by making them obligatory. Because of the long negotiations and preparations, which lasted seven years, the government wanted the new LLR to be adopted as soon as possible and to avoid further delays. The government also wanted both social partners to agree with all parts of the new LLR before submitting it to parliament and therefore made a compromise by not changing Articles 128 and 129.

Another possible explanation is that the employer and trade union representatives could not agree on what should be regulated by the LLR and what should be regulated by sectoral collective agreements. Most probably, the employers were in favour of the solution that the extra payments should be regulated by collective agreements while the trade unions supported the idea that they should be regulated by the LLR. The outcome described above was hence a compromise. By adopting a general and vague regulation, the resolution of the problem was shifted to the level of sectoral collective agreements (in a continuation of the old practice). Although the legislator was of the opinion that the LLR should determine minimum rights, it did not lay down the amount of extra payments in the legislation.

The new LCA has already been in preparation for too long. It has been in parliamentary procedure since 1994 and it seems that only now is the first serious attempt to adopt it being made. The new government must be aware that it is not possible to comply with the principle of free collective bargaining by only promising to change the legislation. (Stefan Skledar, Institute of Macroeconomic Analysis and Development)

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