New public sector pay law makes collective agreements compulsory

A new law on the pay system in the public sector came into force in Slovenia in July 2005. Several provisions of the law require implementation through collective agreements, thus having the effect of making collective agreements compulsory in the public sector. Experts argue that the new law (along with similar private sector provisions) does not comply with the principle of free collective bargaining, as set out in the European Social Charter (Revised) and International Labour Organisation Convention No. 154.

A Law on the Pay System in the Public Sector (LPSPS) came into force on 1 July 2005. According to the LPSPS, its provisions will start to apply to public sector workers' actual pay no later than three months after the adoption of all executive regulations and collective agreements necessary for calculating pay (these have not yet been concluded and adopted).

Article 5 of the LPSPS (covering 'composition of the pay, basic pay and basic pay adjustment') provides that:

1. pay is composed of basic pay, a part of pay reflecting the effectiveness of the employee's work, and supplements;

2. the amount of the basic pay shall be determined by placement into a particular pay class in the pay scale;

3. the pay scale is to be determined in Appendix 1 of the law; and

4. the level of pay for each pay class shall be adjusted once a year as a rule. The amount of the adjustment shall be agreed in the collective agreement for the public sector. The negotiations over this agreement shall begin no later than 1 May and shall be concluded no later than 30 days before the end of the period determined for the submission of the state budget proposal to the National Assembly (parliament).

Article 13 (on 'the method of placement into pay classes') state that:

1. the placement of posts and job titles into pay classes shall be made by considering the placement (classification) of orientation posts and job titles. The placement of the evaluated orientation posts and job titles into pay classes shall be determined by the collective agreement for the public sector; and

2. posts or job titles in the pay classes C, D, E, F, G, H and J shall be placed into these pay classes by sectoral collective agreements and into pay class I by an ordinance or by collective agreements.

The effect of these provision of the new law is to make the compulsory the conclusion of: an overall collective agreement for the public sector; collective agreements for individual sectors of the public sector; and a special collective agreement for the public Radio and Television of Slovenia (Radio in televizija Slovenije, RTVS).

Compliance with principle of free collective bargaining questioned

Similarly, the former Law on Labour Relations (LLR) laid down the obligatory conclusion of collective agreements in order to regulate specific aspects of workers’ rights (SI0212101F). Regarding these rights, the old LLR required obligatory supplementary regulation in collective agreements, making such agreements obligatory. The two agreements that supplementarily regulated these issues were the general collective agreement for the private sector and the general collective agreement for the public sector, both intersectoral national collective agreements.

According to labour law experts, in order to comply with Article 6 of the Council of Europe's 1996 European Social Charter (Revised) (ESC), which stipulates that 'all workers and employers have the right to bargain collectively', and the 1981 International Labour Organisation (ILO) Convention No. 154 on the promotion of collective bargaining, labour legislation should not provide for the compulsory conclusion of collective agreements in order to regulate specific workers’ rights.

However, the new LLR, which came into force on 1 January 2003 (SI0206101N), still determines obligatory supplementary regulation of several issues in sectoral (branch) collective agreements in Articles 128 and 129 (SI0508303F). Similarly, as seen above, the new LPSPS determines obligatory conclusion of the overall collective agreement for the public sector, collective agreements for individual sectors of the public sector and a special collective agreement for RTVS.

Pay determination in the public sector

The government has proposed a pay adjustment for the public sector in its 'budget manual' for the 2006 and 2007 fiscal years. The Trade Union of State and Societal Bodies of Slovenia (Sindikat drzavnih in druzbenih organov Slovenije, SDDO) (SI0208104F), a member of the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS) (SI0210102F), argues that social dialogue concerning pay determination in the public sector is unsatisfactory. SDDO demands a joint discussion with the government concerning the latter's proposed 2006-7 pay adjustment. The union wants to meet government representatives before the government submits the budget proposal to parliament for approval. So far, all governments have discussed pay policy in the public sector in each particular budget period with public sector trade unions. SDDO and a negotiating group of all public sector trade unions are seeking the conclusion of a special agreement on the amount of the pay and annual leave bonus adjustment for 2006 and 2007.

However, some government experts state that the negotiations on the overall collective agreement for the public sector have been going on for almost a year. Therefore, it was impossible to start talks before 1 May 2005 and conclude them 30 days before the government proposed the abovementioned public sector pay adjustment to the National Assembly.

Commentary

It is obvious that the trade unions in the public sector want compulsory collective agreements. Nevertheless, it is the government’s responsibility that Slovenian labour law should comply with the principle of free collective bargaining. Compulsory collective agreements are not collective agreements at all, by definition, but something else, because the conclusion of any agreement presumes the free will of both parties. In a 1993 article entitled (in Slovenian) 'Why the Law on Collective Agreements?' (Company and Labour No. 3/1993. Ljubljana), P Koncar wrote that at that time collective agreements in Slovenia were 'still more executive rather than autonomous norms' of labour law. This statement is unfortunately still valid today. In addition, the longer the modernisation of the labour legislation is delayed the less the social partners will gain from the delay as the results will not necessarily be positive for them in the long run. The social dialogue concerning pay determination in the public sector is already unsatisfactory and 'practice' differs very much from 'theory' as determined by the LPSPS.

Finally, it should be stressed that in order examine whether Slovenian labour law complies with the principle of free collective bargaining, it is not enough to focus only on the legislation concerning collective agreements but it is also necessary to examine the legislation on individual labour relations. (Stefan Skledar, Institute of Macroeconomic Analysis and Development)