Collective bargaining rules set to change again

Employee groups and unions in Slovakia have had a long-running dispute over extending existing collective agreements to cover more employees. Over the past 10 years, the rules governing the extension of multi-employer collective agreements have changed several times. The disagreements have centred on whether an employer should have to give consent to the extension of a collective agreement. Employers insist on the need for consent and trade unions want to abolish it.

Disputes about extension of agreements

A long-running dispute in Slovakia has centred on the extension of multi-employer collective agreements, which is regulated by Act No. 2/1991 (in Slovakian, 164 KB PDF) on collective bargaining. The subject has caused friction between representatives of employers and the trade unions.

The trade unions want the collective agreements to be extended to the greatest number of employers performing similar activities, even without consent of the employer. The unions believe that extension would create more equal working conditions, increase wages and help combat wage dumping.

Employers, however, say that extensions of collective agreements, particularly in the areas of working time and wages, will reduce competitiveness and lead to job cuts. Employer groups say any extensions of collective agreements should only go ahead with the consent of company managers.

Changes to legislation

Fundamental differences of opinion on the issue have led to long-term disputes. Changes in legislation have been made as social partners from either side have pressed their cases. New legislation has been brought in depending on the political orientation of the incumbent government.

An amendment requiring an employer’s consent to extension of a collective agreement was introduced by the second government of Mikuláš Dzurinda, leader of the Slovak Democratic and Christian Union – Democratic Party (SDKÚ-DS), which took power on 1 December 2004.

The trade unions’ campaign for the abolition of the amendment was won when a coalition government was formed in 2007 by Robert Fico of the Smer – Social Democratic Party (SMER-SD). The coalition enacted wide-ranging changes to the mechanism of the extension of collective agreements and from 1 September 2007, extensions again became possible without the consent of the employer.

This was reversed by the new coalition sworn in on 8 July 2010, led by Iveta Radičová of the SDKÚ-DS and since 31 December 2010, an employer’s consent to any extension of a collective agreement has once more been needed .

Early elections were called in Slovakia in 2012, and a new government was again formed by SMER-SD. Trade unions reopened discussions about the extension of collective agreements. On 29 October 2013, the Parliament of Slovakia approved amendments to the Act on collective bargaining. Under the new regulations, extension of agreements will again be possible without the consent of the employer concerned from 1 January 2014.

Social partner reaction

Trade unions and the government’s Ministry of Labour, Social Affairs and Family (MPSVR SR), say the changes will improve working conditions and promote fairness in competition between businesses. Employers remain opposed to the change, reiterating their belief that it will have a negative impact on many companies and could threaten jobs.

Markus Halt, Spokesperson for the Slovak and German Chamber of Commerce which represents companies with a total of 94,000 employees, says the new rules will put some businesses in financial trouble and may stop healthy companies investing in future growth because they have higher wage costs.

Joseph Burza, Chair of the Canadian and Slovak Chamber of Commerce, described it as ‘an unfortunate step’.

Proposal briefly returned to parliament

The National Union of Employers (RUZ SR) asked Slovakian President Ivan Gašparovič not to sign the Act. The president decided to send the Act back to the parliament for further discussion. It went back with his comments that the new rules should not apply to enterprises with fewer than 50 employees or those companies which had signed a single-employer collective agreement.

Parliament ignored the president’s comments and approved the original bill, and the new rules will come into effect on 1 January 2014.

Ludovít Cziria, Institute for Labour and Family Research

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