Consensus on social agreement for 2007–2009

In July 2007, the social partners and the government reached a consensus on the Social Agreement for the period 2007–2009. This was achieved after 18 months of talks and after the three sides had closed the chapter on pay policy, the most contentious issue. Trade unions are particularly satisfied with this chapter because the collective agreements system has been maintained, despite employer demands to negotiate pay at company level only.

On 26 July 2007, the representatives of the government’s negotiating group and the social partners signed and confirmed the authenticity of the Social Agreement for the period 2007–2009. Consensus was reached following 18 months of talks and after the three sides officially closed the chapter on pay policy.The new social agreement will be in force until 2009 and was due to be formally signed in September after its adoption by the executive bodies of the social partners and by the government.

The Social Agreement 2007–2009 contains 19 chapters outlining the tasks allotted to each of the three social partners in order to achieve the stated objectives. Among other aspects, the chapters cover: control of inflation and price policy, public finances, social dialogue, the tax system, a competitive economy and more rapid economic growth, employment and the labour market, pay, and safety and health at work.

Pay policy

The most contentious chapter in the agreement is that dealing with pay. Private-sector pay policy is the key element in this section and aims to ensure that:

• pay growth in real terms is maintained at a steady level so that levels of pay in Slovenia gradually approach those in more developed countries;

• pay growth takes into account inflation and productivity;

• the pay adjustment (pay growth rate) – taking into account inflation and productivity – may be agreed at the following three levels: in sectoral collective agreements; in the private sector’s intersectoral collective agreement on the pay adjustment method, on the refund of work-related expenses and on the annual leave bonus (SI0607039I); and in company collective agreements;

• due to the specific situation of individual companies, conditions may be agreed in sectoral collective agreements and in the intersectoral collective agreement under which it is possible for the company-level pay adjustment to diverge from the provisions of the two higher levels of agreement.

This chapter also states that it is necessary to speed up the preparation of the Law on workers’ share in the profit of companies to ensure that the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS) will discuss it by the end of the year.

Opinions of social partners

The employers are satisfied with the agreement, in particular because the Social Agreement 2007–2009 sets the basis for further reforms. The agreement will be tested this autumn when negotiations on the sectoral collective agreements are due to begin.

Meanwhile, the trade unions are pleased that the collapse of the collective agreements system has been avoided. This would have occurred if the employers’ demands had been met in relation to negotiating the pay adjustment without taking into account productivity and only on the basis of company collective agreements. Many companies do not have collective agreements and the trade unions are stronger at sectoral than at company level: this is the result of an attempt to exclude the trade unions from determining pay.

Commentary

On 17 January 2006, after the negotiations began, the government nominated the employer representative Dušan Krajnik from the Chamber of Crafts of Slovenia (Obrtna zbornica Slovenije, OZS) as the leader of the government’s negotiating group to represent its interests; Mr Krajnik thus led the overall negotiations. The trade unions protested strongly but without success: they accused the government of giving one-sided support to the employers (SI0706019I, see also the Slovenian contribution to the comparative study Industrial relations developments in Europe 2006).

The President of the Confederation of Trade Unions ’90 of Slovenia (Konfederacija sindikatov ’90 Slovenije, Konfederacija ’90) (SI0210102F), Boris Mazalin, declared that the first and the second social agreements (SI0307101F) helped to overcome the difficulties of the ‘hard transition’ period. In his view, the Social Agreement 2007–2009 concerns a different period but does not provide a clear vision of this new stage.

Mr Mazalin also noted that the latest social agreement is a manifesto rather than an agreement on practical matters. For example, it contains around 210 tasks for the government, the majority of which include the words ‘we shall investigate’ or ‘we shall analyse’. Furthermore, in the first half of 2008, Slovenia will be the first new Member State to hold the Presidency of the European Union, which is likely to be a higher priority for the government. In addition, general elections are due to take place during 2008. Therefore, it seems probable that many of the tasks outlined in the social agreement may be deferred.

Štefan Skledar, Institute of Macroeconomic Analysis and Development