Social dialogue & conflict resolution mechanisms

Social dialogue and conflict resolution mechanisms in the acceding countries: Cyprus, the Czech Republic, Latvia, Lithuania and Slovakia

Prague, 14-16 January 2004

Discussion paper - Ludovít Czíria

Bratislava Centre for Work and Family Studies.

Conflict resolution mechanisms in the Slovak Republic

Introduction

The effective application of mechanisms for collective dispute settlement contributed to a great extent to the maintenance of the social peace in Slovakia. In this respect, collective disputes did not lead to radical social actions, like strikes or lockout the operation or plant by the employers in last decade. The legal rules how to proceed with collective disputes are defined by the Act No. 2 of 1991, Coll. of Laws, on collective bargaining. The Act distinguishes two types of disputes – disputes regarding the conclusion of the collective agreement and disputes regarding the fulfilment of commitments arising from already concluded collective agreement.

In this respect, the majority of collective disputes arisen in the last five years have related to the conclusion of the collective agreements. Several collective disputes regarding the fulfilment of commitments arising from already concluded collective agreements were open each year too. According to available information of the Ministry of Labour, Social Affairs and Family of the Slovak Republic, the clear majority of these disputes was successfully settled by mediation and arbitration procedures.

Tripartite concertation at the national level started already in 1991 and continued also after 1993 when the independent Slovak Republic was established. Tripartite concertation outputs included also General Agreements signed for couple of years by social partners and the government. Since 2000 no such a social pact was signed in Slovakia.

Social actions organised by unions in the last years were mostly protests against the government economic and social policy. Radicalisation of social actions culminated in early 2003 when the first genuine strike took place at the railways.

Tripartite concertation as a tool for conflicts resolution

Considering the development in last three years, conflicting tensions between social partners at the national level and the government have grown and many of them were not settled by tripartite concertation.

The tripartite concertation in Slovakia was established in 1991 through Council for Economic and Social Concertation (RHSD) with the aim to carry out the transformation process in co-operation with the newly formed social partners’ representations, as far as possible. Concretely, it was aimed at achieving the agreement upon the intention and goals of economic and social development in order to avoid social tension and to create conditions for preserving social peace as far as possible. The Government of independent Slovak Republic continued in tripartite concertation and signed five social pacts called as General Agreements 1993, 1994, 1995, 1996 and 2000. The adopted measures were mainly about duties of the government and the implementation of the necessary economic and social reforms. But the fulfilment of these measures did not respond always properly to the rapid increase of the unemployment and decrease of real wages of the population. This fact has contributed to tension increase between the tripartite parties. Disagreements culminated in 1996-1997 when the Government proposed a new wage regulation. Although the social partners did not agree with the proposal, the Government itself took steps and the social partners, especially the trade unions, refused to sign the general agreement for 1997. They also broke the usual tripartite negotiations at the RHSD. The tripartite RHSD did not work during years 1997 and 1998 but the social peace was not broken and the transformation process continued. In 1999, the previous government started again with tripartite negotiations at the RHSD. Trade unions opened again the discussion how to make tripartite concertation and its outcomes more compulsory for parties involved. This discussion was finished by the adoption of a special law on tripartism when the Parliament approved the Act No. 106 of 1999 on Economic and Social Partnership. Nevertheless the new act did not bring completely new rules for tripartite concertation and mostly incorporated the previous operational guidelines into the law. The results of the tripartite concertation usually do not have legal validity. However some outcomes, e.g. agreement on the national minimum wage is set by law and serves as a starting point for the sectoral wage bargaining.

Apart from the national tripartite RHSD concertation also other forms of tripartism are implemented in some public institutions. According to the Act No. 387 of 1996 on employment as amended, the National Labour Office (NUP) acted through its tripartite self-governing bodies like the Supervisory Board and Governing Committees of Regional and District Labour Offices. Similar tripartite boards are managing the public Social Insurance Company and the General Health Care Insurance Company too. Since 1 January 2004 there will be some changes implemented.

Conflict resolution by mediation and arbitration procedures

In terms of the legal grounds collective disputes may concern the conclusion of collective agreement or fulfilment of commitments originated from it. The Collective Bargaining Act, No. 2 of 1991, lays down how collective conflict can arise and provides for a procedure to follow at the mediation and arbitration. A proposal for a mediator to be appointed for conclusion of a collective agreement may not be submitted before at least 60 days have elapsed since negotiations for a new agreement opened. Mediation takes place only if the parties desire it, and aims to bring the two parties in a collective dispute to an agreement. If the parties fail to agree on a mediator, either party may apply to the Ministry of Labour, Social Affairs and Family for one to be appointed from a list kept by the Ministry. The Ministry evaluates the request whether it really regards to collective dispute or individual dispute of which solution is in competence of the courts. Following the available data of the Ministry, the majority of collective disputes between the social partners were successfully resolved by mediation procedures during the last ten years.

If mediation has failed, the parties may agree to refer the dispute to arbitration. An arbitrator may be appointed by the Ministry at the request of just one party where the dispute concerns interpretation of an existing agreement, or in cases of concluding the collective agreement where strike action is forbidden due to the nature of the work. Arbitrators may only be appointed by the Ministry from a Ministry list, and cannot be the same person as the mediator. The arbitrator's ruling will be delivered within 15 days of appointment, and the costs of arbitration are borne by the Ministry.

Because there is no system of separate Labour Courts in Slovakia, either party may appeal from the arbitrator's ruling on a point of law, within 15 days to the respective County Court for the party most affected by the ruling. Otherwise, the ruling is legally binding. In case the arbitrator's ruling is endorsed as invalid, the same arbitrator will deal with the case again. In case this is impossible, the Ministry will appoint another arbitrator.

During the last three years there was only one case, when neither mediator nor arbitrator resolved the collective dispute and the trade unions proclaimed strike preparedness.

The sectoral collective disputes registered in 2001 concerned the following issues: validity of collective agreements, relationships between trade union organisation and management, implementation of labour legislation, paid holiday, social area, wages and remuneration, lack of employer’s will to negotiate and catering problem.

Protest actions of social partners

The trade unions position has continuously radicalised since 1997 when they refused to sign a new general agreement and broken the tripartite concertation at the RHSD. Trade unions associated in Confederation of Trade Unions of the Slovak Republic (KOZ SR) increased several times their pressure on the government by organising some protest actions against the governmental economic and social policy. Also branch trade union organisations criticised employers and the government for their incapability to take measures as regards the growing unemployment, price increases and the real wage decrease. In this respect, the first more hectic time period was in autumn 1999. The influential sectoral trade union OZ KOVO (Metal) organised several protest meetings to stop the bankruptcies of enterprises where the management was not able to pay wages in time (or even not at all), as well as to run their business effectively. A big protest meeting took place in September 1999 in the capital Bratislava that was the biggest protest meeting since 1989 revolution. Protest meeting participants requested the government to adopt effective measures in order to improve the worsening situation in the companies (mass layouts, debts and insolvency, bankruptcies etc.). A couple of weeks later there were similar protest meetings organised by regional trade union structures in the counties. The trade union of teachers organised protest meetings requiring a higher wage increase in 2000. At the same time, the KOZ SR claimed its disagreement with the proposal of the state budget for 2000 and declared its readiness for stand by strike, and later also for warning general strike in the spring of 2000.

Anyway trade unions representatives signed a new tripartite General Agreement for 2000 with employers´ and the government representatives. But trade unions protests continued in 2001 (teachers, doctors unions), however, apart from short-term warning strike of railway workers, and stand by strike of electricity supply workers there were no radical social actions organised in Slovakia.

Because the conflicts between unions and the government were not settled trade unions refused to negotiate for a new tripartite social pact for 2001. In late 2002 and early 2003 the conflicts continued and radicalised at the railways. Railway workers trade unions organised two consequent strikes in January-February threshold. It was the first genuine strike in Slovakia. Recently the KOZ SR organised a nation-wide one-hour warning strike to check its capacity to organise a general strike if needed.

Some protest actions were organised also by employers. They were organised mostly by pharmacists protesting against the health care insurance company policy. These protests arose again in the most radical form in 2003.

Strikes and lockouts

Until 2003 there were no genuine strikes organised in a dispute over conclusion of a collective agreement or in a dispute regarding the fulfilment of its commitments in Slovakia. There was only a short-term warning strike of railway workers, and stand by strike of electricity supply workers in 2001. Already in the end of 1998, three months after the appointment of the former government, the workers in railways wanted to go on strike. The following year, the trade unionists were engaged in long-term negotiations on wage increase and they had agreed on the strike date. However, at the end of negotiations, the trade unions reached a compromise with the railways management and the planned strike was cancelled. In 2001, a two-hour strike was announced by the trade unions. This strike was recalled only one hour before it official beginning because of the lack of organisational preparedness. The year 2002 was more peaceful from the trade union side because of the general election was taking place.

In 2003, first genuine strikes were organised during the last ten years of Slovakia’s independence. Actually three strikes of different length and impact took place in 2003.

The most important strikes took place on railways as a consequence of disputes between the trade unions and the management of the railway companies. Because of persisting and high debts of railway companies the Ministry of Transport, Post and Telecommunication required the Railways Corporation to decrease its operational costs and to close some regional railway connections. Trade unions refused to accept this measure and on Thursday, 23 January 2003, the Central Strike Committee of the Trade Unions Headquarters announced a strike on railways. The strike took place on 29 January 2003 morning from 03.00 to 09.00 o’clock when all passenger and freight trains stopped. The main goal of the strike was to immediately stop the planned closure of passenger trains on the selected 25 regional rails. The strike committee also requested to immediately stop the preparation of the closure of more than 200 train connections on other rails. More than 70 % of the railways employees were engaged in the strike. The strike stopped completely the railways operation in Slovakia for six hours. About two thousand passenger trains from the total number of trains were affected by the strike. After the end of the first strike, the Minister of Transport, Post and Telecommunication made a statement that he would not change his original decision. As the trade unions could not achieve their requirements they decided to continue in the strike.

The second strike started in line with the trade unions´ plan on Friday, 31 January, an hour before the mid-night and two days after the end of the first strike. The same number of railway workers took part in it – approximately 30,000 employees. It was expected the strike would significantly damage the economy. Estimations of losses in sales in the public traffic and trucks were about more than SKK 60 per day, and some big companies were threatened by delay of material supplies and final products transportation. The trade unionists, as well as the railways management and the Ministry invited each other to organise meetings and, even they met several times, none of the involved parties took a step back from its original position. On Monday, 3 February 2003, three days after the beginning of the strike, the District Court I in Bratislava warned the railways employees to break the strike till the time when the decision on the strike legal validity is issued. The trade unionists respected the Court’s order and ended the strike. After seven month the higher Court issued its decision in the case, which did not consider the respective strike as illegal and abolished the above District Court preliminary decision.

Recently the KOZ SR asked the government to postpone or abolish the changes planned in the economic and social policy. Recent requirements of trade unions includes increase of the minimum wage to SKK 6,760, better material security and higher pensions for the old-age people and slower increasing of the pension age, keeping the level of charges and lower VAT of all basic foodstuffs, energy, medicaments and books. The last requirement was to keep the tariff remuneration system of the public sector employees. The government prior to the strike fulfilled this requirement of trade unions. As KOZ SR stressed, these requirements are aimed at easing the negative social situation of employees and citizens.

Because the government did not accepted all requirements of trade unions, the Central Strike Committee decided to organise nation-wide warning hourly strike on 26 September 2003 in the time from 8 a.m. to 9 a.m. Many employer organisations reacted to the strike announcement and they infirmed the strike rightfulness, as the strike itself did not deal with matters in relation to the collective labour agreements. The Central Strike Committee defended the strike legitimacy arguing that participation in the strike is in harmony with the International Pact on Economy, Social and Cultural Rights, European Social Charter and is guaranteed by the Constitution of the Slovak Republic. Workers in education institutions, health care workers, construction workers, workers in mines and energy field, employees of the trade union KOVO and other workers were involved in the strike. About 60 % to 70 % of schools and school establishments joined the strike and shifted the schooling hour. The workers on railways were again involved in the strike, however only few railway stations entered into strike. Some trade unions like pharmacists, the post workers, drivers in the public transport in Bratislava, employees of airports and some big companies actually did not join the strike.

Based on the strike assessment, one day after it took place, it was stated that the public did not experience enough the impact of the strike e.g. the drivers in public transport joined the strike only in one town. In general, approximately 70,000 trade unionists in 260 industrial companies stopped working for 1 hour. The top representatives of KOZ SR assessed the strike as very successful because the strike fulfilled the expectations and even it overcomes them. But some political analysts mean that the strike did not have an impact and for this reason it was not successful for the trade unionists.

Few protest actions were organised also by the employers in 2002 e.g. limited (1-2 hours) closures/lock-outs applied by the pharmacists requiring the health care insurance company and the government as debtors to reimburse them the costs for the services provided for the public. Many pharmacists closed their shops from the same reason also in November 2003 – they made an official statement that they were lack of resources necessary for ordering and buying drugs and medicines.

Conclusion

Considering the development of collective disputes in Slovakia during the last ten years, it could be stated that collective disputes arising on national tripartite level seems to be more important than those arising on bipartite level. First serious conflicts on national level took place in 1996 when tripartite social dialogue at the RHSD was broken for almost three years. In 1998 the tripartite social dialogue re-started and functioned again effectively till 1999 when serious conflicts took place between trade unions and the government. However, several serious conflicts between the trade unions and the government, e.g. the last dispute regarding the amendments in new labour Code, were successfully settled. On the other hand, since 2000 no new tripartite social pact was signed till now.

Sectoral trade unions, co-ordinated by the KOZ SR, increased the pressure to government and organised several demonstrations. Disagreements between trade unions on one side and employers and the government on the other side accelerated especially in 2003 when the new coalition government took the power. The government started to implement several necessary principal, but unpopular economic and social measures (some of them were postponed before the 2002 election). The trade unions responded to very fast.

In January 2003 they organised a symbolic occupation of the Ministry of Labour, Social Affairs and Family in order to protest against the prepared changes in new Labour Code. On the January- February threshold the railway trade unions organised first genuine strike in Slovakia. Three-days strike caused economic loses.

In course of the year 2003 the number and the intensity of protest actions organised by trade unions increased and resulted in organisation of a nation-wide on hour warning strike in September. In November the KOZ SR started with organisation of a petition against the current government - for an earlier general election.

Summing up, recent unsettled collective disputes in Slovakia are not linked to traditional industrial relations issues concerning sectoral or company level social dialogue on collective agreements, wage increases etc. All collective disputes in this area were successfully settled by mediation and arbitration procedures - not considering the sectoral railways workers strike, which was not linked to collective bargaining issues.

Unsettled collective conflicts recently took place mostly on the top - national level. However they are not “tripartite” because the majority of them concern the relationship between trade unions and the government only. From contextual point of view this conflict may be considered rather as “transformational”, than that based on usual Industrial Relations issues. Because the government manages the transformation process these conflicts have some inevitable political context.