Most public sector unions back pay cuts

More than two thirds of Slovenia’s public sector unions backed government proposals to cut the public sector wage bill by introducing pay cuts of between 2% and 3%. The agreement is part of a package of measures in Slovenia’s Stability Programme that delivers the decreased public sector costs demanded by the European Commission. The agreement was backed by 24 of the country's 34 public sector trade unions.

Background

Early in 2013, Slovenia was on the brink of needing the help of the Troika – the European Commission, the European Central Bank and the International Monetary Fund – to support its ailing national finances. On 20 May 2013, the Slovenian government and public sector trade unions concluded an agreement to cut the public sector wage bill and to help the government fend off a bail-out.

The agreement, which reduced public sector wages by between 2% and 3%, is one of a package of reforms that the government hopes will cut the country's budget deficit. When the agreement was signed, the deficit for 2013 was predicted to be about 7.9% of GDP.

The cuts were expected to deliver savings of €109m in 2013 and €183m in 2014. Combined with the savings offered by an earlier bundle of measures adopted in 2012, the total funds saved were expected to be €190m in 2013, and €260m in 2014.

The public sector unions also agreed to halt a strike that was first called in April 2012, and which was resumed in January 2013 after the previous government re-opened talks on wage cuts.

In 2012, the average nominal gross wage in the private sector was €1,396.84 and it was €1,762.88 in the public sector. For this reason, employers' organisations have always welcomed restrictive measures.

Contents of the agreement

The agreement contains additional measures for the public sector designed to achieve greater fiscal balance from 1 June 2013 through to 31 December 2014. They are also included in the Stability Programme which the Government forwarded to the European Commission.

The measures, to be enforced from 1 June 2013, cover:

  • pay scales for the period between 1 June 2013 and 31 December 2014;
  • contributions to voluntary pension insurance;
  • holiday bonus set in accordance with the pay scale;
  • promotion to higher pay brackets and freezing regular bonuses;
  • the allowance for higher-education qualifications;
  • the sick pay allowance;
  • elimination of the special allowance for women based on how long they have been employed;
  • the public sector staff establishment by 1% a year.

Support from most unions

Only hours before the agreement was signed, the influential Upbringing, Education, Science and Culture Workers Union of Slovenia (SVIZ) endorsed the deal with around 78% support from its members. This ensured sufficient support among public sector trade unions for the deal to be valid. After the internal vote, SVIZ General Secretary Branimir Štrukelj said that the proposed cuts had reached the limit of what was acceptable.

With the backing of 24 of the 34 public sector trade unions, this deal enjoys the broadest union support of all the cuts implemented since the crisis began.

Among the public sector unions that did not sign the agreement were police trade unions, the Trade Union of Doctors and Dentists (FIDES), the Slovenian Union of Journalists (SNS) and the Cultural Workers' Union (GLOSA). Some, including both police trade unions, signed separate agreements with the government because specific conditions were needed for their sectors. However, FIDES opposed the introduction of the new pay scale.

Commentary

It was reported by the Slovenian Press Agency (STA) on 24 May 2013 that Slovenia’s National Assembly mustered the two-thirds majority need to endorse the introduction of a ‘zero-deficits’ fiscal rule into the Constitution. Members of Parliament voted 78-8 in favour of the rule, and it will come into force in 2015.

Štefan Skledar, UMAR

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