Representativeness of branch employer organisations under debate

Bulgarian legislation does not stipulate clear criteria with regard to defining the national representativeness of branch employer organisations. According to the current legislation, it is enough for a branch organisation to be a member of one of the six nationally representative employer organisations. However, it is often the case that a branch organisation is a member of several employer organisations simultaneously.

Since the beginning of September 2006, a working group headed by the Deputy Minister of Economy and Energy, Lachezar Borisov, and comprising representatives of all employer organisations in Bulgaria, has been working on a draft bill on branch employer organisations. It is estimated that more than 130 branch organisations exist in Bulgaria but an exact figure is unknown for a number of reasons. First, no such statistical data is collected; secondly, a branch organisation may be a member of more than one nationally representative employer organisation; and, thirdly, no restrictions are in place regarding the division or the creation of new branch organisations.

Representativeness of branch organisations

A consensus has not yet been reached on the criteria for representativeness, despite the fact that this is one of the most frequently discussed issues. The larger employer organisations, such as branch federations, have a larger number of members, higher financial turnover and a bigger market share. They are thus willing to accept criteria that would reduce the influence of the smaller employer organisations. These smaller organisations have fewer members, mainly self-employed people and small and medium-sized enterprises (SMEs).

A consensus already exists that more than one branch organisation shall be recognised as representative of the relevant branch, but some employer organisations insist that when they take on some of the state’s functions, such as registration procedures for companies, account should be taken of the relative share in terms of membership, turnover and market presence.

Sectoral councils

The establishment of sectoral councils is a new idea under consideration. Branch employer organisations would be able to discuss any issues at these councils, as well as the legislation in the relevant sectors, together with representatives of the respective state institutions. However, some opposition to this idea has also been raised by the Bulgarian Chamber of Commerce and Industry (BCCI), one of the six representative employer organisations in Bulgaria. BCCI considers that the differences are not clear between the proposed sectoral councils and the existing industry tripartite cooperation councils, established under current legislation as part of the relevant ministries.

Balancing large and small organisations

When the state begins to delegate its functions – for example, with the registration procedures – the expectation is that more restrictive rules will apply. As there may be more than one representative organisation for a given branch, they should be united into confederations, where the power and influence of each organisation will be determined by several criteria. Some of these criteria will include the annual financial turnover of the member companies, the total number of staff and employees with social insurance and an employment contract, as well as the total number of member companies.

Smaller branch organisations will also obtain representativeness but, when functions are delegated, the introduced criteria will allow the larger unions to dominate, according to deputy minister Borisov. The main arguments of the representative employer organisations are expected to pertain to the exact formulation of criteria.

Influence on spending of European structural funds

The Bulgarian employer organisations agree that licensing and permit procedures should not be delegated to employer groups but should remain functions of the state, in order to avoid a conflict of interests and unfair competition. Nevertheless, they want to have a say in the control on the spending of the European structural funds, which will be made available to Bulgaria after its accession to the EU on 1 January 2007. ‘We could be represented in the monitoring commissions,’ suggested the Executive Director of the Confederation of Employers and Industrialists in Bulgaria (CEIBG), Evgeni Ivanov.

Commentary

The representative employer organisations are now discussing the issue of representativeness in branch organisations in Bulgaria for the fourth year in a row. During the previous government’s term from 2001 to 2005, the parliament discussed a similar draft bill, but it was never finalised. The reason was that, to a large extent, the text was the result of lobbying by the Employers Association of Bulgaria (EABG), which was renamed to CEIBG upon its merger with the Bulgarian Industrial Association (BIA) in May 2006 (BG0606019I). EABG was considered to be on close terms with the government, while other employer organisations were not consulted in relation to the text of the draft bill.

Although the Bulgarian employer organisations have found common ground in a number of areas, several issues remain to be resolved during the preparation of the draft bill on branch organisations. Another expert group, established at the beginning of October 2006, will most probably influence the process. This group must prepare, revise, specify and develop new representativeness criteria at national level concerning employer organisations in Bulgaria, as agreed in the Pact on Economic and Social Development, which is effective for 2007–2009. This pact was concluded at national level between representative employer organisations, trade unions and the government on 26 September 2006 (BG0609029I).

Elina Skarby, Balkan Institute for Labour and Social Policy (BILSP)