Social partners disagree over minimum wage level

The minimum wage level is again a matter of disagreement among the social partners. Despite the economic crisis, the trade unions propose a similar minimum wage increase as in 2008. The employers refuse such an increase, with some even asking for a decrease. As the social partners could not reach agreement, the government has legal power to increase the minimum wage. However, it has not yet negotiated a new level and, due to the crisis, the minimum wage increase might be smaller this year.

Employers oppose higher minimum wage

In terms of Act No. 663/2007 on the minimum wage in force since February 2008, discussion about the minimum wage for 2009 started with the negotiations among the social partners at the peak national level. The economic crisis affected the negotiations and thus they ended without any agreement being reached between the social partners. The Slovakian Confederation of Trade Unions (Konfederácia odborových zväzov Slovenskej republiky, KOZ SR) requested a 9% increase in the minimum wage, which was close to the increase agreed in 2008 (SK0811019I).

The National Union of Employers (Republiková únia zamestnávateľov Slovenskej republiky, RÚZ SR) argued that the trade union proposal would have implications for employment levels, mainly affecting employees with lower wages. According to the employers, higher labour costs will cut workplaces. The Federation of Employers’ Associations (Asociácia zamestnávateľských zväzov a združení Slovenskej republiky, AZZZ SR) also refused to increase the minimum wage, and initially even proposed to decrease it to the level of 2007 – that is, SKK 8,100 (€268.87) a month for full-time employees. According to the employers, there is no real reason to increase the minimum wage. Representatives of both RÚZ SR and AZZZ SR highlighted the seriousness of the current economic situation in the country. This situation is also confirmed by recent data from the Slovakian Statistical Office (Štatistický úrad Slovenskej republiky, ŠÚ SR) showing a 5.3% decline in gross domestic product (GDP) during the second quarter of 2009.

Tripartite negotiations fail to bring compromise

Negotiations among the social partners continued with the participation of the government representatives in the tripartite Economic and Social Council (Hospodárska a sociálna rada Slovenskej republiky, HSR SR) on 17 August 2009. However, the parties still failed to reach a compromise. Employer representatives denied the proposal of the Ministry of Labour, Social Affairs and Family (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR) to increase the minimum wage by 8.1% to €319.50 a month. According to the ministry, its proposal takes into account the economic and social situation in Slovakia over the past two years, including developments in consumer prices, employment, monthly wages and the minimum subsistence level.

While trade union representatives accepted the ministry’s proposal, representatives of the employers demanded that the minimum wage does not increase in Slovakia in 2010. They argued that labour demand is decreasing during the present economic crisis and according to the President of RÚZ SR, Marián Jusko, a higher minimum wage will decrease this demand even further. According to the President of AZZZ SR, Tomáš Malatinský, some employers also requested a decrease of the present minimum wage. Representatives of trade unions and MPSVR SR did not, however, accept such a proposal. According to the State Secretary of MPSVR SR, Emília Kršíková, the impact of the global economic crisis could not be borne only by workers.

Uncertainty over 2010 minimum wage

Representatives of trade unions and employers were not able to reach an acceptable compromise despite two meetings with Prime Minister Robert Fico in September 2009. KOZ SR still demands an 8.1% increase in the minimum wage and RÚZ SR wants to keep the minimum wage at the current level. AZZZ SR would accept a 3%–4% increase as a maximum.

According to the law on the minimum wage, the level of the minimum wage for the following year can be at least the level of the existing minimum wage multiplied by the index of the annual increase of the average monthly nominal wage in the economy in the previous year. In accordance with the law, MPSVR SR proposed to increase the minimum wage for 2010 by 8.1%. However, the government has not yet considered the minimum wage rate for 2009. If the government takes into account the high unemployment rate and the positions of the employers, it may propose an even smaller increase in the minimum wage, which might be accepted at least by some employers.

Margita Barošová, Institute for Labour and Family Research

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