Employers annul agreement in retail sector

In February 2006, two Slovenian employer representative organisations annulled the Collective Agreement for the Retail Sector (CARS), arguing that it is out of date. The organisations have also indicated their preference to start negotiations on the Agreement on Working Time of Workers in the Retail Sector – which includes the highly controversial rules restricting shop opening hours on Sundays – prior to the negotiations on the new CARS. The two trade unions representing retail workers have criticised the annulment. They accuse the employers of trying to manipulate the trade unions, by aiming to conclude the agreement on working time prior to the conclusion of the CARS.

On 17 February 2006, the Collective Agreement for the Retail Sector (CARS) was cancelled by the two employer organisations:

  • the Trade Association (Zdruzenje za trgovino, ZT), affiliated to the Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS);
  • the Section for Trade (Sekcija za trgovino, ST), affiliated to the Slovenian Employers’ Association (Zdruzenje delodajalcev Slovenije, ZDS) (SI0211102F).

The employers claim that it is difficult to change a sectoral collective agreement in Slovenia, if the existing one is still in force. The CARS was concluded on 22 December 1997; subsequently, it was revised and its validity renewed each year. In 2005, the social partners decided that they wanted to change the agreement and so initiated a new round of collective bargaining. However, by the end of October 2005, the negotiations came to a standstill. The employers claimed that the new CARS should comply with the Law on Labour Relations (LLR), which came into force on 1 January 2003 and which governs individual employment relationships (SI0206101N), even if the existing CARS is set to remain in force up to 31 December 2006.

Meanwhile, the employers’ negotiating group received a mandate to start negotiations on the conclusion of the Agreement on Working Time of Workers in the Retail Sector, which is to include the highly controversial rules restricting shop opening hours on Sundays. This will either become part of the new CARS, or will require a separate collective agreement. Both employer organisations and trade unions agree that a collective agreement is more favourable than new legislation for regulating Sunday opening hours. However, the employers have highlighted the urgency of concluding this agreement, adding that they are likely to propose to the trade unions that these negotiations be initiated prior to the CARS negotiations.

Limitations of existing CARS

The employers stress that the CARS is out of date because it was concluded on 22 December 1997 and therefore complies with the labour legislation which was in force at that time.

The previous labour legislation had some limitations, notably inefficiencies in regulating the rights, obligations and responsibilities arising from the employment relationship. Consequently, the former legal framework could not be implemented without adopting collective agreements. This explains to a certain extent why collective agreements were previously obligatory in Slovenia (SI0212101F).

The current LLR regulates labour rights, obligations and responsibilities, such as working time, night work, rest periods, and annual leave, in a proper way. Thus, the existing CARS is considered incompatible with the LLR as it complies with previous labour legislation. The Commission for the Interpretation of the CARS tried to correct such incompatibilities with compulsory interpretations of the CARS. As a result, the CARS became much less transparent. Practical application of the collective agreement showed that these interpretations and legal practice did not resolve all the inconsistencies that were problematic for both the employers and trade unions.

Moreover, the previous labour legislation fell short of regulating the contractual employment relationship through partial regulation of the employment contract (SI0308201F). Therefore, these and other important labour law issues were regulated in the General Collective Agreement for the Private Sector (GCAPS), which thus compensated for the shortcomings in labour legislation. However, this changed when the LLR came into force in 2003; the new law clearly determines the contractual principle of the individual employment relationship. Consequently, the employers annulled the GCAPS on 30 September 2005 which will therefore cease to apply after 30 June 2006 (SI0510306N). In this context, the CARS also contains some measures that are not in accordance with the LLR provisions on the employment contract, for example those on home work.

Trade unions accuse employers of manipulation

The two CARS signatories on the trade union side are the:

  • Retail Workers’ Trade Union of Slovenia (Sindikat delavcev trgovine Slovenije, SDTS), an affiliate of the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS)(SI0210102F);
  • Retail Workers’ Trade Union (Sindikat delavcev trgovine, SDT), an affiliate of the Confederation of Trade Unions ‘90 of Slovenia (Konfederacija sindikatov ‘90 Slovenije, Konfederacija ‘90).

Both unions say that it would have been possible to renew the CARS without cancelling the existing agreement, arguing that the real reason why the employers annulled the CARS was to manipulate the trade unions.

In addition, the trade unions claim that the CARS was cancelled ignoring its provisions in this respect, which determine that the collective agreement can only be cancelled three months prior to expiry; if it is not cancelled within this period, its validity is extended for one additional year.

The SDTS agrees that the existing CARS is incompatible with the LLR. However, both the SDTS and the SDT are unhappy with the employers’ proposal to conclude the Agreement on Working Time of Workers in the Retail Sector (SI0506301F) prior to the conclusion of the CARS. They consider that working time should be regulated together with other issues in one collective agreement and not separately.

Comments in the press

Some press commentators argue that by cancelling the CARS, the employers have needlessly strained their relations with the trade unions. This will not contribute to the resolution of other serious issues.

Štefan Skledar, Institute of Macroeconomic Analysis and Development (IMAD), Ljubljana

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