2004 Annual Review for Slovenia

This record reviews the main industrial relations developments in Slovenia during 2004.

Political developments

Two major elections were held in Slovenia during 2004. The country's first European Parliament elections were held in June. New Slovenia (Nova Slovenija, NSi) and the Slovenian Democratic Party (Slovenska demokratska stranka, SDS) each won two seats, as did the combined list of the centre-left Liberal Democratic Party (Liberalna demokracija Slovenije, LDS) and the Democratic Party of Retired Persons of Slovenia (Demokratična stranka upokojencev Slovenije, DeSUS), while the United List of Social Democrats (Združena lista socialnih demokratov, ZLSD) won one seat.

A general election was held in October 2004, resulted in the formation of a new centre-right coalition government, replacing the former centre-left coalition. The parties in the new government, which control 49 seats in the 90-seat parliament, are the Slovenian Democrats (Slovenska demokratska stranka, SDS), New Slovenia (Nova Slovenija, NSi), the People's Party (Slovenska ljudska stranka, SLS) and the Pensioners' Party (Demokratična stranka upokojencev Slovenije, DeSUS). The new Prime Minister is Janez Jansa, the leader of the SDS.

During 2004, Slovenia joined both the EU and the North Atlantic Treaty Organisation (NATO). After several years of preparation, accession negotiations lasting from March 1998 until December 2002 and approval in a referendum in March 2003, Slovenian officials signed the Accession Treaty in Athens on 16 April 2004. Parliament ratified the Accession Treaty in February and Slovenia became a fully-fledged member of the EU on 1 May 2004. About a month before joining the EU Slovenia achieved another key foreign policy goal. Ten years after first expressing its desire to join NATO, Slovenia officially became a member on 29 March as part of NATO’s most extensive enlargement to date.

Slovenia took on the one-year presidency of the 55-member Organisation for Security and Cooperation in Europe (OSCE) on 1 January 2005 and it is expected that this will be one of the key challenges for the Slovenian government during 2005. A major EU-related project in 2005 will be the launch of preparations for Slovenia's presidency of the EU, alongside Portugal and Germany, from the beginning of 2007 to mid-2008.

Collective bargaining

In 2003, only one new sectoral collective agreement was concluded, for post and courier activities (SI0401103F). In 2004 overall, 26 sectoral agreements were concluded, or amended as a result of the tripartite 'agreement on pay policy in the private sector for the period 2004-5' of April 2004 (see below), which is widely regarded as a major improvement to the system of wage bargaining in Slovenia. The newly-concluded collective agreements include:

• the collective agreement establishing the civil servants’ pension scheme (30 January 2004);

• the 2004 collective agreement on pay for the metal products and foundry industry, and the metal and electrical industry, and an agreement on drafting a new collective agreement (3 June 2004);

• the collective agreement for banks and savings banks (8 June 2004);

• amendments to the collective agreement for the chemicals and rubber industry (20 May 2004);

• the collective agreement for the utilities sector (29 July 2004); and

• the collective agreement for transport (19 October 2004).

According to information from the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS) around 100 company collective agreements were also concluded in 2004, which represented a significant increase on the number concluded in 2003. This was mainly due to the renewal of expiring collective agreements.

Pay

Trade union protests were staged in the early spring (including a one-hour general warning strike on 25 February) to support demands for new sectoral pay agreements (SI0403101F). The government attempted to ease the situation for the worst paid workers by offering to increase the monthly pay threshold above which employers pay a special payroll tax, in addition to raising the level of general income tax relief (with the condition that the social partners should conclude a new pay policy agreement).

Subsequently, on 28 April 2004, the government, employers' organisations and trade unions concluded the tripartite 'Agreement on pay policy in the private sector for the period 2004-05' (Dogovor o politiki plac v zasebnem sektorju v obdobju 2004-5) (SI0405101N). The agreement lays down the common elements of pay policy: the basic principles for pay increases, percentage increases, the method of increase, a minimum cash payment increase for all workers, the minimum monthly wage - SIT 117,500 (EUR 492) from August 2004 and SIT 122,600 (EUR 513) from August 2005; a 'guaranteed personal income'; the method of monitoring pay movements; and the method for bringing the agreement's provisions into force.

The new formula for calculating pay increases is aimed at helping Slovenia enter the EU's Exchange Rate Mechanism 2 (ERM 2) at the end of 2004 and subsequently to introduce the single European currency (SI0312102F). This formula will result in agreed increases of 3.2% in 2004 and 2.7% in 2005. Although calculations for individual branches should result in monthly increases of less than SIT 5,000 (EUR 21), the partners agreed that the minimum rise in 2004 should be SIT 5,100 and SIT 5,100 (EUR 21.4) in 2005.

Working time

Normal weekly working time stands at 40 hours. A proposal was made by Stojan Petric, a director of Kolektor Group, a Slovenian engineering company, in the autumn of 2004 for changes to current working time legislation so as to allow companies to increase working time by half an hour per day, up to 120 hours a year in total, out of which 60 hours would be paid (but without income taxes and social security contributions on employees' wages) (SI0411301N). However, trade unions expressed their strong opposition to such an extension of working time. They argued that: any increase in working time involves risks, diminishing the quality of work and raising the intensity and possibility of accidents at work; and such a change would be contrary to the EU working time Directive (EU0410205F) (SI0411302F), especially since the proposal did not guarantee the preservation of jobs or the suspension of redundancies, nor lead to any new employment and the creation of jobs.

The Ministry of Labour, Family and Social Affairs (Ministrstvo za delo, družino in socialne zadeve, MDDSZ) commented that any proposal concerning a change to working time legislation must be discussed by the tripartite Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS), while the Slovenian Employers' Association (Zdruzenje delodajalcev Slovenije, ZDS) expressed its interest in discussing such an increase in 2005 during negotiations on a new 'social agreement' (SI0411302F).

Working time is usually defined in newly-concluded collective agreements. For example, in the collective agreement for banks and savings banks there are 13 articles on working time (defined as weekly and daily working time, shift work, afternoon work, being on call at home, part-time and overtime work. In the collective agreement for the utilities sector there are articles on night work, part-time work, overtime work, shift work, and being on call at home.

Job security

While job security provisions were not included in collective agreements concluded in 2004, this topic was included in the government’s 2004 National Action Plan (NAP) for employment. The NAP tackles job security in several areas. Within the guidelines on promoting the development of 'human capital' and lifelong learning, it is declared that the main efforts in this area would be aimed at reducing the number of unemployed people and boosting the ability of employed people to retain jobs in the long term. Special attention will also be given to measures for long-term job preservation within the guidelines on increasing the supply of labour and promoting 'active ageing'.

The following measures are envisaged by the government's active employment policy for 2004: job preservation in accordance with the Act on Assistance for Enterprises in Difficulty; the reimbursement of a share of expenses for preserving jobs; and work funds and employment programmes intended for potentially redundant and redundant workers and employers in labour-intensive activities. It is expected that changes to the law on payroll tax adopted by the National Assembly in 2004 that will lower employers’ expenses will, especially in labour-intensive branches, help to retain jobs.

Equal opportunities and diversity issues

Equal opportunities and diversity provisions are still not included in all collective agreements. However, the collective agreement for banks and savings banks does include two articles on prohibition of discrimination. The tripartite 'social agreement' for 2003-5 (SI0307101F) makes a contribution to gender mainstreaming/gender equality in work and employment. The social partners have committed themselves to the tasks and activities identified in this agreement, such as: developing policies, programmes and measures to ensure and promote the combining of professional and family obligations of women and men; and organising training and using examples of good practice in order to enforce equal opportunities for women and men.

The ZSSS union confederation's committee for equal opportunities was active in 2004 in educating union officials on equal opportunities. It also prepared a draft clause for inclusion in collective agreements that is intended to help victims of all kinds of discrimination, intimidation and sexual harassment (SI0407102F).

In 2004 the Ministry of Labour, Family and Social Affairs started implementation of the EU’s EQUAL programme, which is intended to achieve objectives in the area of equal opportunities and diversity issues. In 2004-6 theme 8 will be implemented, covering 'reducing the gender gap and supporting equality at work'.

In the 2004 NAP for employment the Slovenian government does not envisage any programmes targeted specifically and only at women, but it plans to have the principle of equal opportunities included as a horizontal measure in all programmes and policies and to treat women as a special target group in order to reduce both gender segregation and gender-based pay differentials. The 2004 NAP for employment also envisages the following measures: reimbursement to employers of a share of the wages of people with disabilities and people classed as difficult to employ' and the subsidising of employment under programmes for providing assistance at home and personal assistance and care for people with disabilities.

Training and skills development

Topics related to training are covered in some of the collective agreements concluded in 2004. For example, rights and responsibilities of workers in the area of education are defined in Article 34 of the collective agreement for communal services. Workers have the right to paid leave (for educational courses and exams) and the reimbursement of the costs of education in the employer’s interest at all levels up to a doctoral degree. Workers who embark on education in their own interest have the right to paid and unpaid leave and to use any literature the employer has available. Other provisions concern apprentices who have concluded a training contract with the employer, trainees involved in practical training and students undertaking work experience.

In the collective agreement for banks and saving banks, education is defined as a privilege and an obligation for employees for the purposes of both their employer and for their own needs. Days spent on education course are considered to be working days and the agreement determines in detail the obligations of employers and employees where education is in the employer’s interest and where it is in the employee’s interest.

In 2004, the number of unemployed people participating in education and vocational training programmes and the acquisition of occupational qualifications (under Programme 10,000 ) doubled. The aim stated in the 2004 NAP for employment is that the share of the adult population included in general education will rise to 5% in the period from 2004 to 2006. This objective will be achieved by a range of means, including enterprises’ greater investment in adult education.

Other issues

In November 2004, ZSSS called on employers to award workers a 13th-month payment and, where provided for by an agreement, a Christmas bonus. Around one-fifth of the workforce received a 13th-month payment in 2003. ZSSS expected that in 2004 the level of 13th-month payments would be a little higher than in previous years, leading to an average real pay rise of around 2.5%, which is in accordance with the social agreement's guidelines (SI0412301N).

Legislative developments

A number of new pieces of employment-related legislation were introduced in 2004, many bringing Slovenian law into line with EU legislation.

In May 2004, the Implementation of the Principle of Equal Treatment Act was adopted. The Act obliges the competent minister and other government services within the framework of their competencies to create the conditions for the equal treatment of persons regardless of their personal circumstances.

Also in May, the National Assembly adopted the Act on the Employment-Related Rehabilitation and Employment of People with Disabilities, which aims to improve the labour market position of people with disabilities.

In August, new rules on health and safety requirements for the use of work equipment were adopted by the Ministry of Work, Family and Social Affairs. The rules regulate the responsibilities of workers and employers in this area.

The new Personal Income Tax Act came into force on 21 May 2004, with full legal effect starting 1 January 2005, introducing a new system of taxable income of private individuals. A new Corporate Income Tax Act was passed in March 2004 and also entered into effect on 1 January 2005. It also regulates the field of exemptions regarding employment. The aim of the tax reform, introduced by the former government, was to ease the burden on work and increase taxes on capital gains (these latter taxes were very low and will remain relatively low even after the changes). The new government has already declared its discontent with these tax changes and has announced it will start work on a new tax reform, with the aim of introducing it in the coming year.

The organisation and role of the social partners

There were no important changes in the organisation of the social partners in 2004. A draft Law on Collective Agreements (LCA) that has been undergoing preparation for almost 10 years was not ready to be adopted in 2004. The law would change the position in collective of employers’ associations with compulsory membership bargaining and introduce a voluntary system of collective bargaining based on autonomous employers' organisations and trade unions with voluntary membership. The draft LCA also regulates: the parties to collective agreements; the content of agreements; the procedure for the conclusion of agreements; the form of agreements; their validity and cessation; the peaceful resolution of collective labour disputes; and the recording and publication of agreements.

The issues of the national representativeness of trade unions and employers' confederations and the role of Slovenia's compulsory-membership business organisations were also tackled by an EU Phare project on social dialogue. This was concluded in April 2004 and produced a number of recommendations on a range of controversial questions (SI0411303F).

Industrial action

According to trade unions, 2004 was not characterised by a high number of strike. However, several strikes and protests gained public attention during 2004. A warning strike in February (SI0403101F) and protest meetings in the spring (SI0404102N) were organised by trade unions in order to put pressure on employers' organisations to conclude negotiations on the revision of the pay terms in sectoral collective agreements.

In May 2004, the Trade Union of Doctors and Dentists of Slovenia (Sindikat zdravnikov in zobozdravnikov Slovenije, FIDES) organised a one-hour warning strike to support demands concerning the regulation of its members' working time (SI0406104F), while in October 2004 journalists went on strike for three days, demanding changes to their national collective agreement, including higher pay scales (SI0410302F).

Employee participation

The tripartite social agreement for 2003-5 (SI0307101F) states that it is necessary to speed up the preparation of the Law on the Participation of Employees in Companies’ Profits (LPECP). A draft LPECP was submitted to parliament in 1997 and in 2002, but it has still not been discussed. Recently, both trade unions and employers have intensified debate on the financial participation of employees (SI0412303F). Although there are some differences in employers’ views (calling for voluntary participation) and those of trade unions (demanding the French obligatory model of financial participation), both parties agree on the positive potential of such participation and that is necessary to put pressure on the new government to adopt the LPECP as soon as possible.

EU Directive 94/45/EC on the establishment of European Works Councils (EWCs) was transposed into Slovenian legislation by the Law on European Works Councils (LEWC) (Zakon o Evropskih svetih delavcev, 2002) (SI0208103F), which came into effect when Slovenia joined the EU in May 2004. Before May 2004, some multinational companies with subsidiaries in Slovenia (such as Renault-Revoz, Danfoss and Henkel) decided to include representatives from Slovenia in their EWC or information and consultation procedure (SI0409102F)

Slovenia did not meet the October 2004 implementation deadline for transposing the EU Directive on employee involvement in the European Company Statute. The delays were largely caused by the general election in October 2004 and the preceding election campaign. As of January 2005, the draft law to transpose the Directive had not been published (SI0501303F).

Absence from work

According to analysis by the Health Insurance Institute of Slovenia in November 2004, absence from work due to illness is increasing and represents a serious social, economic and health problem. The analysis calls for urgent measures for reducing absence from work. The analysis finds that lost working days in 2003 represented 4.7% of the total working time of employees. In 2003 there were 804,847 cases of absence from work, of an average duration of 13.7 days.

Due to changes introduced by the Law on Labour Relations, the burden on employers to pay workers during sickness has been reduced and that of the Health Insurance Institute increased. Data for the first half of 2004 show that there was a 0.7% reduction in the number of lost working days, compared with the same period of 2003. The financial obligations for lost working days in terms of the burden on employers dropped by 4% compared with 2003 and rose by 3.3% in terms of the burden on the Health Insurance Institute.

The most common reasons for lost days in 2004 were sickness and accidents outside of the workplace (76.1%), caring for family members (10%), accidents at work (8%), accidents involving third persons (5.1%), and other reasons (0.8%). In 2003, the financial replacement of income due to sick leave represented around 1.48% of GDP.

The analysis concludes that the rate replacement of earnings in the case of illness is too high (and thus does not encourage workers to return to work) for Slovenia’s economic capacity. It also states that the problem of 'absenteeism' must be defined integrally in order to include all factors relevant to the problem so as to result in a redistribution of responsibilities from the Health Insurance Institute, which currently bears most of the burden of absence, to other institutions.

Psychological harassment

Psychological harassment is not a topical issue, neither in public debates nor in collective bargaining. However, rrecently there have been some indications of change in this area. Legislation preventing discrimination, intimidation and harassment in the work environment (SI0407102F) also partially covers these questions. As noted above, the ZSSS committee for equal opportunities has prepared a draft clause for collective agreements aimed at helping victims of discrimination on all grounds, intimidation and sexual harassment (as part of an action programme for promoting equal opportunities for women and men).

Some new collective agreements include provisions relating to psychological harassment. For example, Article 8 of the collective agreement for banks and savings banks declares that 'employers are responsible for the provision of normal psycho-social working conditions and the prevention of psychological, physical and sexual harassment' and it also uses the term 'mobbing'.

Psychological harassment is a stress factor in the work environment. In order to include the issues of work-related stress (in accordance with the EU framework agreement on work-related stress, signed in October 2004 - EU0410206F) in collective bargaining, in November 2004 ZSSS proposed the conclusion of a national collective agreement on stress that would oblige medium-sized and large employers to amend their statements on safety and risk assessment to incorporate a psychological risk assessment before October 2007 (SI0501302N).

In December 2004, the Association of Employees’ Councils in Slovenian Companies (Združenje svetov delavcev, ZSDSP) (SI0312101F) organised a seminar entitled How to prepare a stress management programme in a company.

New forms of work

According to the Statistical Office of the Republic of Slovenia, in September 2004 785,607 people were in work, of whom 705,840 were in paid employment (0.4% more than in August 2004) and 79,767 were self-employed (0.4% more than in August 2004). In the period from April to June 2004, the share of people in employment who were working part time was 9.6% (7.7% in the case of men and 11.7% in the case of women).

According to Cranet data (2004) for organisations with 200 and more employees, the most commonly used non-standard forms of work in Slovenian organisations are fixed-term work, part-time work, shift work and overtime work. The proportion of companies that use fixed-term contracts is 98.1%. The proportion of companies that use part-time work is 98.1%, while 83.1% of companies use shiftwork and 91.2% use overtime work. The following work forms are seldom used: work at home (5.6% of companies); distance work (11.2% of companies); and a compressed working week (13% of companies).

Part-time work and fixed-term contracts are defined by law and in some collective agreements. In the collective agreement for banks and savings banks, several non-standard work forms are defined, including: part-time work (in the case of project work, during parental leave, in the case of a child’s illness or in the case of three or more underage children in a family); work at home; and overtime work. The collective agreement for utilities defines part-time work, night work and work at another location.

The 2004 NAP for employment, based on an analysis of the flexibility of work (work times and locations) and employment (non-standard employment forms), declared that part-time employment will be encouraged as a measure directed at improving the flexibility of the labour market in Slovenia.

Other relevant developments

2004 saw a worsening of problems in the Slovenian textiles industry. As a consequence of a series of redundancies and bankruptcies in 2004, the number of workers in this industry, after nearly halving in the past decade, fell by a further 18% by September 2004. According to trade union data, a total of 1,995 workers (1,513 of whom were women) lost their jobs in textiles and leather companies in 2004.

Outlook

Slovenia has a new government and it remains to be seen how this will influence industrial relations and social partnership in the future. Initial indications are likely to emerge at the first meeting of the newly-composed Economic and Social Council. Prime Minister Janez Janša has announced that he will attend the meeting, which might be seen as a signal of the importance the new government places on social dialogue.

The government has announced that one of the biggest challenges in 2005 is the process of meeting the euro-entry criteria, which will demand a restrictive public spending policy in 2005 and most of 2006. In addition, the government plans to embark on a reform of tax legislation and to put the state budget through its most far-reaching restructuring ever in order to better facilitate the drawing down of EU funds. As the government expects that bankruptcies and job losses in industry will continue, it plans to secure social support for redundant workers, to help companies to save healthy divisions and to support the creation of new jobs in regions severely hit by bankruptcies.

The government has also announced the abolition of bureaucratic obstacles to faster entrepreneurial development. The creation of an economic environment that will facilitate the improved competitiveness of Slovenian companies (with special attention to small companies) is very high on the agenda of employers as well. Besides that, they expect that the internationalisation of the Slovenian economy will be one of the priorities of the next year.

In 2005, trade unions expect that some new legislation will be passed (on strikes, on collective agreements and on the participation of employees in company profits) and that social dialogue will be the basis for achieving the economic strategies that will improve the socio-economic position of workers. Trade unions highlight a number of problems that should be given special attention in 2005 as follows: workers in labour-intensive industries; the need for new models of worker participation (such as financial participation and European Works Councils); the need to improve opportunities for the professional advancement of young women and mothers; and employers’ enhanced responsibility for healthy and safe working conditions. (Aleksandra Kanjuo Mrčela and Barbara Kajič, Organisational and Human Resources Research Centre, OHRC)