Debate continues over future of compulsory-membership employers’ organisations

In summer 2005, the Slovenian social partners were consulted on proposals for a new Law on Collective Agreements (LCA) and a new Law on Chambers of Commerce and Industry (LCCI). The former would allow employers’ associations with compulsory membership to continue to conclude collective agreements for a transitional period of three years. The aim is that the voluntary-membership Slovenian Employers' Association (ZDS) should become strong enough during this transitional period to perform fully its role as an organisation representing employers’ interests in industrial relations, and thus replace completely in this sphere the compulsory-membership Chamber of Commerce and Industry of Slovenia (GZS). However, the draft LCCI appears to make a three-year transitional period impossible. Trade unions fear that, as a result, they will not have collective bargaining partners in future.

On 7 June 2005, the Ministry of the Economy (Ministrstvo za gospodarstvo, MG) made public its guidelines for, and later on the working document of, a draft new Law on Chambers of Commerce and Industry (LCCI) (SI0506302F and SI0212101F), which would make companies’ membership of the Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS) voluntary, rather than compulsory as at present (SI0211102F and SI0508303F).

Subsequently, the Ministry of Labour, Family and Social Affairs (Ministrstvo za delo, druzino in socialne zadeve, MDDSZ) submitted the amended working document for a draft Law on Collective Agreements (LCA) (SI0509301F) to the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS), the country's central body for tripartite cooperation (SI0207103F), for discussion at its 134th session held on 17 June 2005. However, both trade union and employers' organisations refused to discuss the working document.

'Incompatibility' between draft laws

The first paragraph of Article 2 (on 'parties') of the working document for the draft LCA states: 'Collective agreements shall be concluded by trade unions or associations of trade unions as a party on the workers’ side and employers or associations of employers as a party on the employers’ side (hereinafter: parties).'

Article 34 (on 'employers’ associations with compulsory membership') of the draft LCA, in the chapter on transitional and final provisions, states: 'Regardless of the provision in the first paragraph of Article 2 of this law, the collective agreements can also be concluded on the employers’ side by the employers’ associations with compulsory membership in the transitional period of three years after the enforcement of this law.' The intention of this transitional period is to prevent an interruption of the collective bargaining process. GZS's strength rests on compulsory membership. In order to make possible the functioning of bargaining during the transitional period of three years, GZS should remain a bargaining partner despite its compulsory membership. During the transitional period, the Slovenian Employers' Association (Zdruzenje delodajalcev Slovenije, ZDS) should become strong enough to take over GZS’s role completely.

However, Article 26 (on 'adjustment of the Chamber of Commerce and Industry of Slovenia') in the chapter on transitional and final provisions of the working document for the draft LCCI stated that, in the six months after the new LCCI comes into force, GZS should convene an extraordinary assembly to vote on the adjustment of GZS to the provisions of the LCCI. If at least a half of all GZS members decided in favour of adjusting GZS to the provisions of the new law, GZS would continue to operate as an 'economic chamber'. If not, GZS should carry out a procedure of liquidation on 31 December 2006 (as an alternative, GZS could continue to operate as an economic chamber with those members that voted for the adjustment of GZS to the provisions of the new law). In this way, the working document for the LCCI would in effect make it impossible to realise the transitional period stipulated by the LCA.

Subsequently, the Ministry of the Economy amended the draft Article 26 of the LCCI to state: 'The Chamber of Commerce and Industry of Slovenia (hereinafter GZS) shall adjust its functioning with this law in the period of one year after the adoption of this law at the latest.' This means that the GZS would not cease to exist, because its members would not have to vote on its 'self-liquidation'. However, GZS must reform itself into an organisation with a voluntary membership within one year after the adoption of the LCCI. Because the Ministry of the Economy expects the LCCI to be adopted at the end of 2005, this means that GZS’s compulsory membership should cease at the end of 2006. However, the problem of the transitional period will not be resolved completely.

By adopting voluntary membership at the end of 2006, GZS would be weakened considerably. By that time, the LCA will not yet have been adopted, ZDS will not be strong enough and the proposed transitional period will be meaningless, commentators argue. The aim of the transitional period is that ZDS should prepare and build up its membership, organisational structure, expertise, negotiating capacity etc. The most important task for ZDS is to organise sectoral organisations and negotiating teams in all sectors of the economy, in order to be able to negotiate sectoral collective agreements in all sectors. ZDS would thus be sufficiently capable of fully performing its role as an organisation representing employers’ interests within the context of industrial relations (especially negotiating collective agreements, social agreements etc) when GZS ceases to be an employers’ organisation.

Trade union views

Trade unions believe that the draft LCCI makes it impossible to realise the transitional period of three years after the enforcement of the new LCA. Without this transitional period of three years, ZDS will not have the time to prepare and will not be able fully to perform its negotiating role, they argue. Therefore, the trade unions will lose their collective bargaining partners, which will endanger collective agreements.

At the 134th session of the ESSS held on 17 June 2005, Dusan Semolic, president of the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS) (SI0210102F), proposed the withdrawal of the discussion on the draft LCA from the meeting's agenda. This view was supported by Dusan Rebolj, president of the Confederation of Trade Unions of Slovenia Pergam (Konfederacija sindikatov Pergam Slovenije, Pergam), Drago Lombar, president of KNSS - Independence, Confederation of New Trade Unions of Slovenia (KNSS - Neodvisnost, Konfederacija novih sindikatov Slovenije, KNSS). and Boris Mazalin, president of the Confederation of Trade Unions ΄90 of Slovenia (Konfederacija sindikatov '90 Slovenije, Konfederacija '90). Mr Semolic argued that no discussion had taken place between the Ministry of the Economy and the Ministry of Labour, Family and Social Affairs to reconcile their viewpoints concerning the status of GZS.

Employers’ views

Samo Hribar Milic, the ZDS general secretary, and Dusan Krajnik, the representative of the (compulsory-membership) Chamber of Crafts of Slovenia (Obrtna zbornica Slovenije, OZS), supported the withdrawal of the discussion on the draft LCA from the ESSS meeting's agenda. Mr Krajnik said that OZS and the Slovenian Employers' Association of Crafts (Zdruzenje delodajalcev obrtnih dejavnosti Slovenije, ZDODS) demanded further discussion on those articles of the draft LCA that concern the extension of the validity of collective agreements and the transitional period for employers’ associations with compulsory membership. OZS proposes that the transitional period should not be shorter than five years, beginning from the date the LCA comes into force.

MDDSZ position

Marko Strovs, the acting director general of the Directorate for Labour Relations and Labour Rights at the Ministry of Labour, Family and Social Affairs (MDDSZ), was opposed to the withdrawal of discussion on the draft LCA from the agenda of the June ESSS meeting. He recalled that the negotiations on the LCA were, after a long gap, renewed in 2002. In spite of this, no agreement on the proposal has been reached. Therefore, Janez Drobnic, the Minister of Labour, Family and Social Affairs, had proposed at the previous ESSS session that the ESSS itself rather than the tripartite expert group for the preparation of the draft new LCA should discuss the unresolved issues. In relation to the draft LCCI, Article 34 of the draft LCA does not concern only GZS but also other chambers with compulsory membership, such as OZS and several others.

Commentary

It seems that the preparation of the Law on Chambers of Commerce and Industry will delay the adoption of the new Law on Collective Agreements considerably.

ZDS was founded in February 1994, after GZS came to the conclusion, on the advice of the International Labour Organisation (ILO) and the International Organisation of Employers (IOE), that a separate organisation for employers outside the Chamber of Commerce and Industry was the best solution.

ZDS has thus already had a transitional period of more than 11 years at its disposal to evolve into a fully-fledged employers’ organisation capable of performing its role without GZS’s assistance. ZDS has never been confronted with the accomplished fact of there being no other choice than to perform its role alone and therefore to build up its negotiating capacity and structure. It is very probable that the new LCA will not be adopted for at least two years. If this law stipulates a transitional period of three years, ZDS will thus have another five years to adapt to the new circumstances while GZS retains compulsory membership and its role as negotiating partner. The longer the adoption of the LCA is delayed, the longer will be the transitional period for ZDS.

ZDS has observer status at the Union of Industrial and Employers’ Confederations of Europe (UNICE). It is likely that ZDS will be accepted as a full member of the UNICE more quickly once the issue of compulsory membership of Slovenian employers’ organisations is resolved in compliance with the principle of free collective bargaining.

On the other hand, some experts claim that there is no point in giving ZDS a three-year transitional period because it will never take the necessary measures and become any stronger, and are thus against the removal of GZS from collective bargaining, These commentators refer to a lack of strong and representative employers' organisations at national and sectoral level in most central and eastern European countries (TN0207104F) and the declining membership of employers' associations in countries such as Germany (DE0212202F). In the future, coverage by a sectoral collective agreement in Slovenia will be conditional on the employer being a member of the employers' association that is party to the agreement. Therefore strong employers’ organisations are crucial in order to maintain a high level of collective bargaining coverage, in that these organisations negotiate agreements that are directly binding on all their member companies. Taking into account also a fear of strong pressure towards decentralisation of collective bargaining in the EU (TN0503102S) it is not difficult to understand the arguments for a delay in the removal of GZS from collective bargaining and industrial relations in general.

Apart from GZS and OZS, there are other organisations in Slovenia with compulsory membership that function as employers’ organisations and conclude collective agreements on the employers’ side. One of them is the Doctors’ Chamber of Slovenia (Zdravniska Zbornica Slovenije, ZZS) with compulsory membership among all doctors and dentists. It has signed a number of collective agreements in the health sector as an employers’ organisation representing doctors in private practice. Alongside the Ministry of Health (Ministrstvo za zdravje, MZ), which acts as the public sector employer in the health sector, ZZS has signed collective agreements for doctors and dentists, healthcare nursing, and the healthcare and social care sector. (Stefan Skledar, Institute of Macroeconomic Analysis and Development)

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