The government setting a minimum wage without any social dialogue, the signed public sector wage agreement and a general strike for higher wages in the private sector are the main topics of interest in this article. This country update reports on the latest developments in working life in Slovenia in the fourth quarter of 2018.

Minimum wage increase set without dialogue with social partners

In September 2018, Slovenia’s new coalition government was elected. One of the main pre-election promises of Levica, a party that is providing parliamentary support to the new government, was an increase in the minimum wage and the abolition of all allowances attached to it. In the autumn, Levica prepared the Minimum Wage Act Amendment and this act was adopted in the National Assembly on 13 December. The act stipulates that the minimum wage for full-time work will increase from €638 to €667 net from 1 January 2019 (€842.79 to €886.63 gross) and to €700 net from 1 January 2020 (€940.58 gross). The beginning of January 2020 will also see the exclusion of all allowances from the minimum wage (e.g. for seniority, work and business performance, and difficult working conditions).

The main employer organisations disagreed with the fact that the new minimum wage had been defined and agreed without any dialogue with social partners. The reaction of trade unions was less noticeable.

The way in which the new minimum wage was defined deviated from common practice in a number of ways.

• The minimum wage is usually set for a single year, but this time it has been set for two.
• From 2021 onwards, a new formula for a regular annual adjustment will be used, predominantly linked to minimum living costs: the minimum wage should surpass the level of living costs by at least 20%, but not more than 40%.
• From January 2020, all allowances will be excluded from the minimum wage.
• The midterm target level was set by members of parliament.
• The level of the increase was unilaterally brought into effect by the government and not debated with social partners, as was the established practice.

€300 million wage increase in public sector

In December 2018, the ninth agreement between the government and public sector trade unions since the onset of the global financial crisis was signed. Two austerity measures from that period were prolonged: performance bonuses will not be paid out until July 2020 and promotion payments will be paid in December (before the crisis they were paid in April). On the other hand, the agreement brings a wage increase of around €300 million for public servants in the next three years (excluding doctors, directors, principals and officials).

• Employees ranked up to the 26th grade will receive a 4% wage increase in January 2019.
• Employees ranked above the 26th grade will receive an 8% wage increase (and an additional 4% from November 2019 onwards).
• Employees in roles that require a Masters degree or PhD will receive a 12% wage increase (and an additional 4% from September 2020 onwards).

Alongside these upcoming changes, police officers are still negotiating with the government for additional benefits.

Social partners have not expressed any opinions on this issue so far.

General strike over higher wages for all

On 5 December, two of the largest private sector trade union confederations in Slovenia – the Association of Free Trade Unions of Slovenia (ZSSS) and the Confederation of Trade Unions of Slovenia PERGAM (KSS PERGAM) – organised a general strike in front of the offices of the largest employer organisation, the Chamber of Commerce and Industry of Slovenia (GZS), to urge employers to increase wages for all employees. ^[1]

The rally included more than 1,500 protestors, representatives of 25 private sector trade unions covering a range of industries and representatives of 4 other major trade union confederations (the Confederation of Public Sector Trade Unions (KSJS), the Confederation of New Trade Unions of Slovenia ‘Independence’, Alternativa and the Trade Union Confederation 90 (KS-90)). The protestors called for a new general private sector collective agreement, a new agreement on higher wages in the economy and intensive negotiations for new sectoral collective agreements.

By the end of December, two important sectoral collective agreements that cover more than 20,000 employees in the crafts and entrepreneurship sectors and more than 30,000 employees in the road transport sector are due to expire. If the employer organisations are not willing to negotiate new agreements, the trade union confederations have warned that they will continue with strike activities.

GZS ^[2] was the only employer organisation to respond to the strike demands. Boštjan Gorjup, President of GZS, stated that the organisation supports the conclusion of a social agreement that covers a longer period of time (to be established), where social partners would define the evolution of wages and the regulation of tariffs relating to economic productivity themselves.

Commentary

2018 was a politically turbulent year, with the resignation of Prime Minister Miro Cerar in mid-March and the election of the coalition government in September. One of the main tasks for the new government was to address the public sector wage agreement and minimum wage increase, and it accomplished both by the end of 2018. With the wage agreement, the government prevented the strikes that civil servants had previously announced.

Private sector social dialogue was less successful, since social partners did not reach an agreement on wage increases or negotiate new sectoral collective agreements. Instead, KSS PERGAM and ZSSS organised a general strike, which is likely to continue in 2019 if the employer organisations remain unresponsive. ^[3] GZS sees a solution in the conclusion of a new social agreement, which would define a new wage model and address key future challenges such as lifelong learning, an ageing workforce and digitalisation.