Slovakia: Extension of multi-employer collective agreements marks a turning point

Extension of multi-employer collective agreements has been a long-standing issue in Slovakia. Despite the opposition of employers’ organisations, in 2013 trade unions succeeded in pushing through their demand for legislation that makes extensions possible without the consent of the employers affected. In the second half of 2014, five collective agreements were extended, the first for four years.

Introduction

The possibility of extending multi-employer collective agreements was introduced in Slovakia in 1991, shortly after the change of the political and economic system in Czechoslovakia in late 1989.

Since 2007, each multi-employer collective agreement is marked with the relevant code of the Statistical Classification of Economic Activities in the European Community (NACE) and can be extended to employers whose prevailing activity falls within the respective NACE classification of the sector.

A proposal to extend a collective agreement is reviewed by a tripartite committee established by the Ministry of Labour, Social Affairs and Family (MPSVR SR). The need for the employers concerned to consent to the extension, required from 2004, was abolished in 2007 but reintroduced at the end of 2010.

Because of the various changes in the extension regulation, extensions of multi-employer collective agreements were rarely applied in Slovakia. For instance, there were only two extensions in 2008 and five  in 2009. Between 2010 and 2013, no multi-employer collective agreement was extended, the employers rejecting any proposals to do so because of the increase in their costs.

The government's attitude to extending multi-employer collective agreements has depended on its political composition. The right-wing government between 2010 and 2012 supported the employers' position, while the current left-wing government supports the trade unions' position. 

In October 2013, Parliament approved the latest amendment to Act no. 2/1991 on collective bargaining and the need for the consent of employers affected by the extension was again abolished. The new rules were effective from 1 January 2014 and unions proposed several extensions in the first half of 2014.

The unions are expected to use the opportunity provided by the new law to propose the extension of more multi-employer collective agreements in the near future. However, any extensions without the consent of all social partners could be difficult to achieve.

Extensions in 2014

The Metal Trade Union Association (OZ KOVO) and the Integrated Trade Union Association (IOZ) proposed the extension of five multi-employer collective agreements to employers active in parts of the sectors as defined in NACE Rev. 2 codes.

In accordance with the law, the tripartite commission established by MPSVR SR, which has equal trade union and employer representation, assessed the proposals submitted for extensions. MPSVR SR subsequently signed decrees on extending the agreements (Table 1).

Table 1: Details of decrees implementing the five extended multi-employer collective agreements

date of decree sector date effective
26 July 2014 Inland transport 1 August 2014
26 July 2014 Metallurgy, geology and mining 1 September 2014
12 August 2014 Mechanical engineering 1 September 2014
19 September 2014 Construction 1 October 2014
19 September 2014 Electrical engineering 1 October 2014

 

 

 

 

 

 

 

 

 

Arguments supporting extensions

According to the trade unionists, the main reason for extending multi-employer collective agreements is to secure an increase in employees' average wages to the level in those enterprises originally covered by the agreement while balancing regional disparities in the labour market in individual sectors or parts of these sectors.  

Wage increases agreed in multi-employer collective agreements directly influence the wages of employees in individual enterprises covered by the agreement. Thus, the trade unionists want multi-employer collective agreements to cover as many companies in a particular sector as possible. They consider the extension of multi-employer collective agreements to be:

  • a significant factor in making the working environment more human;
  • a key step towards the standardisation of working conditions of employees, including the prevention of unfair competition by employers (for example, by social dumping).

The decrees issued by MPSVR SR on the extension of the five multi-employer collective agreements (Table 1) define conditions of employment and remuneration of all employees working in the enterprises covered by the extended agreements. For example, they improve their wages, terms and conditions of their employment and working conditions, including entitlement to compensation for dismissal, occupational safety and health, and various forms of leave.

The provisions of the extended multi-employer collective agreement in the electrical engineering sector also limit the number of temporary agency employees. Such workers can only be used where there is lack of suitable workers in the region or in positions that require initial training.

In the multi-employer collective agreements extended in the metallurgy, geology and mining industry sector, and the inland transport sector, employees' claims also deal with the development of social plans for employees made redundant. For instance, employees who are within five years of retirement age or whose spouses are have greater protection against redundancy and will not be made redundant if at all possible.

The extended multi-employer collective agreements in the mechanical engineering and electrical engineering industries also make it possible to increase the basic social fund by 1.5% in individual enterprise collective agreements.

Impacts of extensions

Originally, only those employers who signed the multi-employer collective agreement were committed to honour the agreed benefits in their enterprises. When the agreements were extended, the agreed benefits applied to a wider range of employers and their employees (Table 2). A significantly higher number of employees can now take advantage of the benefits set out in the extended multi-employer collective agreements.  The estimated additional cost to employers is €11.4 million per year (439 KB PDF, in Slovakian).

Table 2: Coverage of companies and employees before and after the extensions

Sector

Number of covered companies

Number of covered employees

Before the extension

After the extension

Before the extension

After the extension

Inland transport

27

42

16,036

20,966

Mechanical engineering

7

82

2,250

12,984

Metallurgy, geology and mining

12

162

13,284

24,379

Electrical engineering

14

35

6,300

12,885

Construction  

104

Not available

7,956

35,828

Source: Data provided by OZ KOVO and IOZ

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Komentuoti