New collective agreement in road transport sector

At the end of 2007, a new sectoral collective agreement was concluded in road transport after intense negotiations and just before the sectoral trade unions were about to announce strike action. The new agreement took effect on 1 February 2008. The agreement’s provisions cover the whole sector and concern working time and rest time, as well as pay issues including minimum wage levels for workers in road transport.

In December 2007, a new sectoral collective agreement was concluded between the Union of Estonian Automobile Enterprises (Autoettevõtete Liit) and the Estonian Transport and Road Workers’ Trade Union (Eesti Transpordi- ja Teetöötajate Ametiühing, ETTA). The previous sectoral collective agreement expired in March 2007 and negotiations for a new agreement had been ongoing since then. The new agreement took effect on 1 February 2008 and is valid until 31 December 2009.

Intense negotiations

The bargaining parties had been negotiating the provisions of the new sectoral collective agreement since the expiration of the previous agreement in March 2007. The negotiations had been intense, and agreement was only reached through mediation by the Public Conciliator (Riiklik Lepitaja) just before the sectoral trade unions intended to launch an extensive strike.

Pay issues

The most controversial issue in the negotiations related to minimum wage levels in the sector. At the beginning of the negotiations, ETTA demanded a minimum monthly wage of EEK 7,718 (about €493 as at 18 January 2008) for drivers and mechanics and a minimum hourly wage of EEK 45.40 (€2.90). Compared with the provisions of the previous collective agreement, the trade unions’ demand represented an increase in wages of almost 43%.

However, the employers considered the wage increase as too extensive given the low level of state subsidies which do not cover all of the expenses incurred in supplying transport services. Raising the wages of bus drivers to such an extent would therefore further increase the financial deficit of the bus companies. Alternatively, the employers proposed an increase in monthly wages of almost 30% to EEK 7,013 (€448).

Working time and rest time

In addition, the bargaining parties disagreed concerning issues affecting working time and rest time, including: the way of recording the total working time; the division of a working day, such as splitting a working day into several separate periods of working time with a rest period in between for drivers working in passenger transport; additional pay; and annual leave of mechanics.

After long and ineffective negotiations, bus drivers employed by one of the biggest public bus transportation companies, GoBus, held an hour-long warning strike in some of the largest Estonian cities. They also threatened to take more extensive strike action, in order to demand better wage conditions and increased state subsidies for bus transportation companies. The strike was planned to be held in two of the largest cities in Estonia on 11 December 2007 and, subsequently, to be gradually extended to all forms of public transport in the country. Moreover, some employers threatened to cancel their contracts for providing transport services with local government units unless the state subsidies were increased.

Provisions of agreement

In December 2007, the bargaining parties finally reached an agreement. The new sectoral collective agreement provides for increases in the minimum monthly wages effective from 1 February 2008. In the case of standard working hours, bus drivers and highly qualified repair mechanics will earn a minimum monthly amount of EEK 7,060 (€451), drivers EEK 6,560 (€419) and unskilled repair workers EEK 5,470 (€350). According to the agreement, minimum wages will be increased further on 1 January 2009, for which the respective agreement has to be reached by 1 October 2008.

The most important changes concerning working time and rest time are related to the way of recording the total working time and the division of the working day. In terms of calculating the working time, it has been agreed that if the calculation period for recording the total working time exceeds two months, 60% of the sectoral minimum wage is paid for overtime work. Regarding the division of the working day for drivers in passenger transport, it may be divided into separate periods of working time and rest time. The rest time taken between the defined periods of working time should be at least three hours, and standby time which is not included in working time will be paid after the second hour of standby according to the sectoral minimum wage.

Although the agreement sets the minimum wage levels and working conditions in the sector, in practice the wage levels of the whole sector are not affected. According to ETTA, the agreement affects mainly bus drivers working outside the capital city Tallinn, by increasing their monthly wages by EEK 1,500 to EEK 2,000 (€96 to €128). As wage levels are higher in the capital city, the provisions on the minimum wages have a smaller impact on the wage levels of road transport workers in Tallinn.

After the agreement was concluded, ETTA declared that the agreement on the minimum wage levels will hopefully help to reduce the share of undeclared work in the sector, thereby promoting fairer competition. The agreement also includes a joint declaration by ETTA, the Union of Estonian Automobile Enterprises and the Ministry of Economic Affairs and Communications (Majandus- ja Kommunikatsiooniministeerium, MKM) which underlines the need to further develop the transport sector and to address the issues facing public transport.

Commentary

The collective agreement in the road transport sector is one of the two sectoral collective agreements currently valid in Estonia. Further information on the sector and its respective working time issues is available in the national contribution to the EIRO comparative study on the Impact of the working time directive on collective bargaining in the road transport sector.

Marre Karu and Kirsti Nurmela, PRAXIS Centre for Policy Studies

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