Law on employee participation amended

In April 2002, Slovakia's new Labour Code came into force, making significant changes to the law on employee participation, which had previously granted consultation, information, inspection and collective bargaining rights only to trade union organisations. The new Code allowed for employee representation through an elected works council or'works trustee' with negotiation, information and inspection rights, but only in organisations with no trade union presence. In July 2003, an amendment to the Code extended works council and works trustees to organisations where a trade union is present.

The Constitution of the Slovak Republic provides in Article 37 that'every person shall have the right to associate freely with other persons to protect their economic and social interests'. This right is implemented by provisions in the new Labour Code which took effect on 1 April 2002 (SK0207102F). Article 37 of the Constitution is interpreted more widely than solely providing for a right for employees to associate in trade unions in order to protect their economic and social interests. It also entails employee participation, corresponding with the principles of plural democracy, the market economy, plural ownership forms and the'plurality of legal entities'. Employees have a right to express directly or indirectly their opinions at the workplace as regards the scope of work, working conditions and the organisation of the work. The freedom of association laid down in the Constitution, along with the provisions ofInternational Labour Organisation Convention No. 135 on workers' representatives, various EU employment law Directives, theCouncil of Europe'sEuropean Social Charter and theCharter of Fundamental Rights of the European Union, are regarded as providing for the interests of employees vis-à-vis employers to be represented not only by trade unions but also by using other legal forms, such as works councils, health and safety representatives and other employee representatives.

Employee participation and representation is now regulated by part 10 of the SlovakLabour Code, which deals with'collective labour relations'. This part of the Labour Code sets the framework for employee participation through'competent' trade union organisations, works councils,'works trustees' and'employee representatives for safety and protection of health at work'. This part of the Labour Code also lays down employment protection rules applying to employees´ representatives. Furthermore, it stipulates the right of employees of multinational companies covered by the EU Directive (94/45/EC) on European Works Councils (EWCs) to supranational information and consultation, as well as the conditions for the establishment and operation of EWCs.

Background

The development of employee participation in Slovakia dates back to when the country was part of the former Czechoslovakia. Czechoslovakia was one of the first countries in Europe to introduce works councils, doing so in 1920. After the Second World War, elected works councils were re-established in organisations which employed at least 20 employees by Presidential Decree No. 104 of 1945. In the case of employers with fewer than 20 but more than three employees, participation was through a'works trustee'. The main role of the works councils was to protect and promote the economic, social, health and cultural interests of employees, as well as to ensure the involvement of employees in the company's economic policy and to participate in company administration by means of giving advice and making proposals.

Company management was obliged to: negotiate with the works council on all general issues which affected employees; provide the works council with details of employment contracts and organisational standards; and allow the works council’s members to examine wage documentation. Management, in accordance with the company's economic results and social needs of employees, was obliged to finance the activities of the works council, with this financial support amounting to at least 10% of the company's net profits. Works councils were established fully only in the business sector, with some restrictions in the the non-business sector. The 1945 Decree was regarded as progressive in terms of employee participation, because it allowed for wide-ranging participation based on the principle of democratic election of representatives.

In 1946, an Act on Trade Union Organisations was adopted, followed by a Governmental Decree on Works Councils. The main purpose of this Decree was to secure the participation of the trade union representatives in company management through their direct participation in works councils. The election rules for works councils were changed and the unions started to play the main role in the overall management of elections and in the selection and appointment of candidates. In 1959, the participation of employees though works councils was abolished and the socialist-era trade unions became the only representatives of employees. The trade union organisations obtained rights to information, consultation and co-decision and became the only partners for company management. Relations between the trade unions and employers were stipulated by the Labour Code, which entered into force in 1965.

This situation continued until 1988 when the Act on State Companies was adopted. According to this Act, it was obligatory to establish representative bodies, known as'socialist self-administrations'. These were an assembly of all company employees or their representatives, and an elected council of employees representatives. This Act was repealed in 1990. Subsequently, in the newly independent Slovak Republic (created in 1993), employee participation was again restricted to trade unions. This was the case until 2002, when the new Labour Code reintroduced works councils, works trustees and other forms of representation.

Current forms of employee participation

Under the provisions of the current Labour Code (following amendments which came into force in July 2003 - see below), employees participate in the employer’s decision-making process relating to their economic and social interests either directly or via employee representatives. These employee representatives may be trade union organisations, works councils or works trustees. The employer is obliged to allow the operation of trade union organisations at the workplace. If a trade union organisation and a works council both exist at a workplace, the rights to conduct collective bargaining, control the obligations arising from collective agreements and receive information are assigned to the trade union organisation. Employee representatives for safety and protection of health at work are also considered as employee representatives. In cooperatives, a special cooperative body, elected by the members´ assembly, acts as the representative of the employees. In those cooperatives where the employment relation is a part of membership, collective agreements are replaced by resolutions of the members' assembly.

The Labour Code provides that employees are entitled to information on the activities of the employer and on fundamental matters relating to the economic situation and development of the employer. Employees are entitled to voice their comments on such information and on planned decisions, about which they may submit their suggestions. Employees are to participate by means of a competent trade union organisation, works council or works trustee in the creation of just and satisfactory working conditions, through:

• joint decision-making;

• negotiation;

• the right to information; and

• inspection activities.

Joint decision-making by employee representatives relates mainly to the decision-making process over the organisation of the working time.

Negotiation is understood as an exchange of opinions and dialogue between the employee representatives and the employer. The employer must negotiate in advance with employee representatives, mainly on:

• the position, structure and presumed development of employment, and planned measures if employment is threatened,

• fundamental issues of company social policy;

• measures for the improvement of occupational safety and health at work;

• decisions which may lead to basic changes in work organisation;

• organisational changes, such as mergers, takeovers or restrictions in the activities of the employer; and

• measures aimed at avoiding workplace injuries and occupational diseases and at protecting the health of employees.

The right toinformation means that the employer must provide data to the employee representatives on its economic and financial situation and on the expected development of its activities. The employer can refuse to provide such information where to do so might harm it, and can require that information be regarded as confidential.

Theinspection activities of employee representatives include checking adherence to labour regulations, including wage regulations, and obligations arising from collective agreement. In this framework, employee representatives are entitled to:

• enter the workplace;

• demand the necessary information and documentation from managers;

• submit proposals for the improvement of working conditions;

• request that the employer address problems identified;

• suggest to the employer or any other body empowered with managerial control of employment relations to take appropriate measures as regards any managers who breach labour regulations or obligations arising from collective agreements; and

• demand from the employer information on measures taken to remedy problems identified.

With regard to the conditions for employee representatives’ activities and their protection (including health and safety representatives), the Labour Code provides that:

• the activities of employee representatives which are in direct relation to the performance of the employer's tasks are considered as work for which they are entitled to be paid;

• the employer must provide employee representatives with time off work for the performance of their function or for participation in educational activities;

• the employer, to the extent of its'operational possibilities', must provide employee representatives with facilities and technical equipment, free of charge;

• employee representatives may not be disadvantaged or otherwise impeded by the employer in the performance of tasks arising from execution of their function;

• during their term of office and for six months after its expiry, employee representatives are protected against measure which might disadvantage them, including termination of their employment contract;

• the employer many terminate the employment contract of an employee representative only with their previous agreement; and

• employee representatives are obliged to maintain secrecy as regards matters they become aware of during the performance of their functions which are of a confidential nature.

Participation through works councils

The works council is a body which represents all employees of an employing organisation. They can be set up at organisations which employ at least 50 employees. Organisations with fewer than 50 employees but more than five may have a works trustee with identical rights and duties to a works council. Works councils and works trustees have a right to co-determination only where working or employment conditions are not stipulated by a collective agreement.

Works councils and works trustees are elected by the workforce. The employer is obliged to allow the election of works council members if this is requested in writing by at least 10% of employees. The number of works council members depends on the employing organisation's workforce size. In organisations with 50 to 100 employees, the works council has three members. In organisations with between 101 and 500 employees, there is at least one additional member for each 100 employees; while in organisations with 501 to 1,000 employees there is at least one additional member; and, in organisations with more than 1,000 employees there is at least one additional member for each additional 1,000 employees.

All employees with at least three months' service with the employer have the right to vote in elections of members of the works council or works trustees. Those eligible to stand for election are all employees who: are over 18 years of age; have at least three months' service with the employer; have never been convicted of a criminal offence; and are not closely linked to the employer. Works council members are elected directly by secret ballot on the basis of lists of candidates proposed by at least 10% of the workforce or by a competent trade union body. Works council elections are valid if an absolute majority of employees entitled to vote do so. The candidates who receive the greatest number of votes are elected to the council. The number of works council members is determined in advance by an election committee, on the basis of agreement with the employer. If the necessary number of members is not elected, another round of elections is held within three weeks. If this second round is also unsuccessful, no works council is established and no new elections may be held for at least 12 months. The initial election of a works council's members is organised by an election committee made up of between three and seven of the employees who signed the request for the establishment of the council. Works trustees are elected directly by secret ballot, requiring a majority of the employees voting for election.

The expenses incurred in elections for works councils and works trustees are borne by the employer. The term of office of the works council and works trustee is four years. The works council ceases to exist: upon expiry of its term of office; on the resignation of its members; if it is recalled by employees; or if the number of employees falls below 50. Holding office as a works council member or works trustee ceases upon termination of the employment relationship, resignation from the role, or recall by employees.

Commentary

The participation of employees through a trade union organisation developed in the former Czechoslovakia after 1946 and in 1959 it became the main and, in practice, the sole form of employee participation in organisations. In 2002, a fundamental change took place in Slovakia when the new Labour Code introduced works councils and works trustees as representative bodies of employees. This issue had been discussed for a number of years by the Ministry of Labour, Social Affairs and Family (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR), the Confederation of Trade Unions of the Slovak Republic (Konfederácia odborových zvazov Slovenskej republiky, KOZ SR) and the Federation of Employers´ Associations of the Slovak Republic (Asociácia zamestnávatelských zvazov a zdruzení Slovenskej republiky, AZZZ SR). The outcome was a provision in the 2002 Labour Code that works councils could be established only at employers where no trade union organisation was operational.

The implementation of this provision proved problematic for companies from the start, mainly from the practical point of view. Initially, many employers misunderstood their obligation to hold elections of works council members if requested to mean that they have were obliged to create works councils. These misunderstandings were caused by a lack of precise guidelines on the new legal position. Once the correct situation was explained and clarified, less attention was paid to this issue. Indeed, interest was low overall, mainly because the competences of the works council were more limited than those of trade union organisations - eg works councils do not have the right to conclude collective agreements or any other type of agreement with management. Furthermore, the legislation did not introduce any obligation to register or announce the establishment of works councils or works trustees, so there is no official evidence on how many have been elected, where they are located, how they operate etc.

Employers also expressed dissatisfaction with the major role given by the 2002 Labour Code to employee participation through trade union organisations, which they considered as giving unions an excessively privileged position.

In the light of these various concerns, the Labour Code was rapidly amended, following a compromise reached with some difficulty by representatives of the government, employers and trade unions (SK0303101N). Changes were adopted on 21 May 2003 and came into effect on 1 July 2003. This led to the current position as described as above, whereby trade union organisations and other employee representatives - ie works councils and works trustees - essentially have equal status. This has resulted in a certain reduction of the trade unions' position at company level. While trade union organisations have kept the right to collective bargaining, to monitor obligations arising from collective agreements and to information, they have lost their long-held dominant position in terms of participation at company level. The works council now has rights to joint decision-making, negotiation, information and inspection, which means a partial return to the important position it held before 1959. It is not yet possible to assess the impact of the new provisions, given the recent nature of the changes to the law. (Mariana Munková, Bratislava Centre for Work and Family Studies)