EIRO 2005 ANNUAL REVIEW

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1. Political data

In the summer of 2005 (25 June 2005) were held the regular parliamentary elections for the 40th National Assembly. For the first time after the beginning of the transition period seven coalitions and parties crossed the 4% election barrier and entered the Bulgarian Parliament. None of them appeared to be able to form a government alone. This created certain difficulties in the formation of cabinet. Following more than a month-long negotiation process, a three-party coalition was formed, which determines itself as left-centrist.

The most significant part of the efforts of the Bulgarian society was concentrated on the fulfilment of the requirements related to the process of eurointegration.

The regular presidential elections are forthcoming in the autumn of 2006. Although that according to the Bulgarian Constitution the president institution does not have significant and actual powers to influence directly the country’s government, these elections are pressurised with the expectations for revenge of the right and right-centrist forces, which suffered a large failure during the parliamentary elections in 2005.

2. Collective bargaining update

There is still no practical implementation in Bulgaria of national level CLAs.

In 2005 the collective negotiations on industry and branch level aimed at renewal or updating of the effective CLAs. Presently there are 10 CLAs signed and in force on industry level (7 in the real sector and 3 in the budget sector).

• Pay

Payment of labour remains a major problem of both the industry CLAs and the company-level CLAs.

The minimum wage for a certain industry or company is still practically determined as a ratio of the national MW. For example in the mining and trade industry this ratio is about 1.0 to 1.4. In some industry agreements the MW is differentiated based on qualification levels. The trends are for decentralisation of this process towards company level, whereas in certain cases the agreements are for a higher value of the ratio. There is a lasting practice of agreeing the minimum social and health insurance contribution thresholds in the branch CLAs. These thresholds are used to determine the minimum social and health insurance contributions payable for a specific occupation.

The additional pay is also subject to negotiations for each industry. The most frequent are three indicators - pay for hazardous working conditions; annual seniority pay and overtime pay. Additional payments for language proficiency, degree, work with classified information, etc. are seldom part of the bargaining.

The annual update of wages with the inflation growth index is not yet a priority (except of the transport, construction and electrical engineering industries) of bargaining.

No agreements exist in the bargaining practice on new forms of income like profit sharing, payments with shares of the company and linking the wage increase to the labour productivity.

• Working time

Working time, rests and holidays appear to be the number one problem for the industry-level collective bargaining. Almost all CLAs stimulate the participation of trade unions in the discussions on working time distribution, as well as on the development of internal regulations related to the introduction of different work regimes. Often the industry-level CLAs delegate the right for determining particular regimes to the company level. This is a permanent practice for the transport, construction, electrical engineering, mining and metal industries.

The introduction of part-time work, agreed in advance with the trade unions, is negotiated in more than 75% of the collective agreements. The possibility for working time extension after preliminary consultations with worker and employee representatives has been included in 2/3 of industry-level CLAs.

• Job security

The employment and job security problems often are subject to discussion during collective bargaining. Three types of agreements have the highest relative share:

• The employers’ preliminary information to trade unions in the case of redundancy procedure and determining the redundancy criteria - these are part of nearly 90% of industry-level CLAs;

• Agreement on the procedure of new job openings for the relevant industry or branch and hiring new workers - these issues are included in about 60% of the CLAs;

• Agreements for mass employment contracts termination, advertising job vacancies, as well as protection for permanent employment contracts are included in 45% of the CLAs.

The agreements on the elaboration of sectoral employment programmes by both bargaining parties are more limited - they exist in merely 1/3 of the agreements.

One of the significant issues in the industry-level CLAs is the agreement on future redundancies. The most significant to that effect are the agreements on compulsory advance discussions in specifically authorised joint bodies, as well as the obligation of employers to request preliminary opinion of trade unions regarding the need of redundancy.

• Equal opportunities and diversity issues, including efforts to close pay inequalities

These kinds of problems are not traditionally part of the collective labour agreements.

• Training and skills development

As a whole, the effective industry-level CLAs repeat the agreements reached in previous collective agreements and mostly concern the obligation of the employer to provide the necessary time for training (reduced working day or reduced working week, as well as different forms of additional annual leave).

• Any other issues which have featured significantly in your country during 2005

The two largest trade unions in Bulgaria - CITUB and CL “Podkrepa” filed a joint claim to the Secretary General of the Council of Europe against the Government of Republic of Bulgaria. The claim refers to a violation of the European Social Charter (ESC) ratified by Bulgaria. The claim reads: “Republic of Bulgaria has not fulfilled its commitment under paragraph 4 of the European Social Charter (revised) to provide satisfactory conditions for the exercise of one of the main labour rights - the right to strike”.

The trade unions’ claim is based on the fact that the Law on Settlement of Collective Labour Disputes (LSCLD) in Bulgaria, in contradiction with the ESC requirements, revokes the right to strike for workers and employees in the healthcare, communications and energy sectors.

3. Legislative developments

There were no significant changes of legislation influencing the industrial relations model in Bulgaria in 2005.

4. The organisation and role of the social partners

The fragmentation process of social partner organisations, which started in 2004, had some negative impact. The existence of 9 representative organisations (3 trade union and 6 employers) made the work of the dozens of national, branch and territorial social dialogue structures very complicated.

The recognition of a new representative trade union aggravated the relations between the Government and the two main confederations. In the end of 2004 the two confederations disputed in the court this decision of the Government. In 2005 the court respected the claim. Later on an agreement was made to use a new assessment procedure for meeting the representativeness criteria for trade union.

5. Industrial action

In 2005 the most the most widespread protests and industrial actions were concentrated in several industries. The privatisation process of Bulgartabac - a major company in the tobacco and cigarette industry, caused many scandals and protests. The trade unions openly accused the Government that its actions related to this privatisation are accompanied by:

• Lack of transparency;

• Looking for fast sale at any cost regardless at the expense of efficiency and national interests;

• Inauspicious terms of the deals /both financial and social/;

• Open lobbying in favour of certain potential buyers;

• Creating an impression for support of personal and corporate interests;

• Lack of dialogue between the Government and the parliamentary groups and between the Government and the social partners regarding the terms of sales and concessions;

• Creating an extremely strong tension among workers and employees from the concerned industries and branches due to the ambiguity of their prospects.

For several times in 2005 the largest branch level trade union in Bulgaria - the Bulgarian Teachers Trade Union (BG0512101N), organised effective strikes and protests in defence of teachers’ labour.

The workers from the largest sugar plant in Bulgaria protested many times, claiming that their plant should work so that they can work and provide for themselves and their families.

6. Employee participation

Currently there is no data concerning changes in the area of employee information and consultations.

The Works Councils have not yet been implemented in Bulgaria.

7. Labour migration

After the 40-year ban of free movement of people, in 1989 there was an enormous emigration wave, which quickly diminished during the coming years. This wave was political and ethnic in the beginning. Soon after that, the emigration was caused by conditions and factors that made it more and more economical. The migration decision became a definite reaction to the social and economic environment in the country.

1. Assessment of the size and intensity of out-migration of the population

Throughout the years between the two last censuses (1992 - 2001) the emigration was approximately 196 thousand. Some 19 thousand have returned and moved to the country during the same period. Balancing these two opposite migration flows, the result from the outward migration comes to some 177 thousand.

1. Scope of the potential out-migration

Data from a sociological survey (based on the 2001 census) show that some 8% of the population between 15 and 60 years of age think that it is “somewhat probable” and “very probable” for them to move and live in another country. Twenty five percent of them intend to do that during this year and 49% during the next two-three years. For the other 26% moving to another country is a longer-term goal.

These potential emigrants may conditionally be called “future emigrants”. There is another category of potential emigrants who intend and think it is “somewhat probable” and “very probable” for them to leave for work or study abroad for more than one year. Almost the same is the structure of the group of emigrants with regard to the timing of their plans - 26% intend to leave during this year, 48% - during the next two-three years and 25% are planning to leave in the far future.

This category of potential emigrants represents the major flow of outwards labour emigration.

The reviewed two groups of migrants are the long-term out-migration of population. It covers in total some 15% of the population in the observed age interval. For comparison, according to a similar survey performed in 1996 the scope of long-term out-migration was nearly 25%.

1. Reasons for the potential migration

The various migrant groups relate the particular purpose for their migration to solving of different problems.

For the emigrants the main goal is “to live and work in a higher living standard environment” - 54%. Every fifth person (20%) says that the emigration is related to solving personal or their family’s economic problems.

The structure of goals in the group of potential labour emigrants is rather different. Almost half of them (47%) relate their emigration to solving economic problems. The higher living and working standard environment are attractive for 35%.

Five percent of both groups of emigrants regard the attainment of desired education for themselves or their children as the main purpose for their emigration.

The highest share is of emigrants who want to deal with crafts - 12%. Hospitality and trade will potentially ensure the economic activity of some 7% of the emigrants and 6% will continue their education. During their stay abroad 15% of “labour migrants” also count on dealing with different crafts. Some 9% have chosen agriculture and 5% will work in trade and hospitality. Here too some 6% intend to use their stay abroad to continue their education and upgrade their qualifications.

1. Destinations of the potential out-migration

During the past several years some countries have become permanent destinations for the Bulgarian emigration. The largest part of the Bulgarian emigration is towards Germany - 23%. Nearly one-fifth (19%) of the emigration flow is towards USA. The relative shares of the other potential emigrant destinations are relatively little: Greece - 8%, Spain - 8%, Great Britain - 6%, Italy - 6%, Canada - 5%, France - 4% and others.

1. Demographic profile of the potential emigrants

The major part of the future emigrants will be recruited from the population between 20 and 39 years of age. The desire to emigrate is more frequently encountered amongst 20-29 years old (37%), while the relative share of emigrants in this category is 15% for 40 - 49 years old and 8% for people of more than 50 years of age. The share of youths (20 - 29 years) is smaller among the labour and short-term migrants - 35 and 30% respectively. For these category of migrants the scope of out-migration is growing among the older ones - 19-22% for 40-49 years old and 8-10% for those of more than 50 years of age.

Men are the predominant part of the emigration flow. Fifty seven per cent of the persons willing to emigrate are men and 43% - women. The relative share of men in the group of labour migrants is much higher - 65%, whereas they also comprise 60% of short-term migrants.

Eighteen per cent of all migrants have attained university education 18%, high school graduates are 56% and 26% have lower than secondary education.