Economic and Social Council examined

In April 2002, the Economic and Social Council of Slovenia (ESSS), the country's central body for tripartite cooperation, held its 100th session since its establishment in 1994. We take this opportunity to review the ESSS's scope, powers and operation, finding that it has substantially contributed to the successful implementation of basic economic and social reforms, and that the quality of its work and its importance have increased over time. However, forthcoming changes in the Slovene industrial relations system raise the question of reform of the ESSS.

On 4 April 2002, the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS) held its 100th session. ESSS was established by the April 1994 tripartite agreement on pay policy in the private sector (SI0206102F). Through this accord, the government, employers' organisations and trade unions established a central body for tripartite cooperation in Slovenia. During the eight years of its existence, ESSS has substantially contributed to the successful implementation of basic economic and social reforms and the process of transition, as well as rapprochement with the European Union and integration into the international economy. Moreover, it has helped with the enforcement of social justice and social peace, which are seen as crucial for successful economic development.

Before the institutionalisation of central-level tripartite cooperation in the ESSS, informal and ad hoc cooperation already existed at this level. For example, in drawing up draft laws the government set up preparation groups, which included employer and trade union representatives. Furthermore, there were other tripartite or 'multipartite' bodies, for example at the sector level, and certain institutions included employer and trade union representatives. The establishment of the ESSS meant the formalisation and institutionalisation of cooperation, in order to give it stronger role.

Scope

The ESSS's field of activity is limited and concerns mainly industrial relations, conditions of work, labour legislation, social rights and employment policy, as well as other broader economic and social issues which concern the interests of workers and their families, employers' interests and government policy.

The agenda of the 100th session of the ESSS in April 2002, which illustrates its field of activity, was as follows:

  • a draft Law on the Pay System in the Public Sector;
  • the situation of the construction industry in Slovenia, covering restructuring and diminishing employment in this sector (SI0207102N);
  • a report on the adoption of legislation in the social field, which is being adjusted in line with the EU legal order; and
  • a proposal for the starting-points for the work of the Slovene tripartite delegation at the 90th International Labour Conference, held in Geneva on 3-20 June 2002.

Powers

First, the ESSS has a consultative function. This means that it takes an active part in the preparation of legislation (SI0206101N) and other documents. It can also issue its own standpoints and opinions on different matters, such as working and draft documents (eg the state budget and budget memorandum).

Second, the ESSS has a 'quasi-bargaining' function (though not collective bargaining in its proper sense). This means that 'social agreements', pay policy agreements (SI0206102F) and other tripartite accords are negotiated within its framework.

Structure

The ESSS has 15 members. Each member has a deputy, who has the same rights and powers as the members. According to the ESSS rules of conduct (or standing orders - the ESSS operates according to commonly adopted rules), the structure of the ESSS must assure the equality of each of the three parties. Therefore each party - the government, employers and employees - has the same number of members (five) and deputies (five). The term of office of members and deputies is three years. Substitute member can also be nominated.

ESSS nominates its president and a deputy for a one-year term. Each year, a different grouping (the government, employers or employees) nominates the president and deputy from amongst its members and deputies. During each term of office, the president and its deputy are from the same grouping. The first president and deputy were nominated by the government and since their mandate expired these posts have rotated. In March 2002, the mandate passed to the employers and in March 2003 it will switch to the trade unions. The representatives within each group of members can agree to divide the term of office between them into shorter periods. Thus, the four trade union organisations represented in the ESSS divide the mandate into four three-month periods, with the president and deputy nominated by different organisation.

Working groups consisting of representatives of all three groupings, and sometimes independent experts, are established to deal with the main issues on the ESSS's agenda, such as the drafting of proposals for a law on the ESSS and the Law on Labour Relations, pensions and disability insurance reform, and the evaluation and implementation of various tripartite agreements.

The ESSS has a secretary, who is not a member of the ESSS and has the status of a higher administration employee in the government administration. The government is responsible for organising the ESSS secretariat and the secretary is currently from the general secretariat of the Slovene government. The functioning of the ESSS is financed from the state budget.

ESSS adopts its decisions unanimously. Each grouping has one vote. If no consensus can be reached between the three parties on a particular issue, the ESSS cannot adopt a common position. As a rule each grouping nominates a rapporteur who represents the common standpoint of its members.

Adopting the International Labour Organisation (ILO) model, ESSS has a strictly tripartite structure which is in line with its function and its scope. As mentioned above, in addition to a consultative role the ESSS has a quasi-bargaining function, with 'social agreements', pay policy agreements and other tripartite accords negotiated within its framework. Therefore it includes representatives of the government. Given its scope - industrial relations, conditions of work, labour legislation etc and broader issues affecting workers, employers and government policy - the ESSS includes representatives of employers and trade unions only. If the ESSS discusses issues which also concern other interest groups - such as pensions reform - representatives of these groups' organisations -such as pensioners' organisations - are invited to participate in the discussions.

Regarding the procedure for preparation and adoption of laws and other documents, the ESSS participates in their preparation and gives opinions before the government endorses them and sends them to parliament. In this way, the ESSS is more 'operational' than those bodies in certain EU Member States, which do not include government representatives and where numerous other interest groups besides employers and workers are represented. Such bodies act more as discussion forums and deal with a wide array of topics.

Government representatives and organisations represented on the ESSS

The government

The government representatives on the ESSS are currently:

  • Vlado Dimovski, Minister for Labour, Family and Social Affairs;
  • Tone Rop, Minister for Finances;
  • Tea Petrin, Minister for the Economy,
  • Barbara Fakin of the Office of the Prime Minister; and
  • Dušan Kidrič, chief of the Department of Social Analysis and Development, Institute of Macroeconomic Analysis and Development (Urad RS zamakroekonomske analize in razvoj, UMAR).

There are thus several ministries represented on the ESSS. This reflects the breath of its scope and tends to increase its effectiveness when dealing with issues such as the impact of structural adjustment on labour relations and employment etc. In principle, when a certain issue is discussed, the representative of the ministry responsible for this issue, often the minister, participates in the discussion.

Employers

The term 'entrepreneur' is not new in Slovenia, but it is not synonymous with the term 'employer'. 'Real' employers have only begun to emerge with the emergence of real owners - with the transformation of old socialist-era enterprises and to a lesser extent the emergence of new enterprises. The same is true of employers' organisations. Slovenia has retained a system whereby all enterprises and craftworkers are organised in 'chambers' (para-statal organisation) of which membership is obligatory. After the change in the country's socio-economic system, the mandates of these chambers were extended and they still function as employers' organisations, alongside 'authentic' employers' organisations. The chambers have two basic functions - employer functions (negotiating) and promotional functions (trade and business). This is contrary to ILO Conventions, which provide for freedom of association of employers and workers.

Because there is no legislation regulating the representativeness of employers' organisations, there are no clear rules on which employers' organisations are eligible to be represented on the ESSS. For the moment, three organisations represent employers' interests in the ESSS:

  • the Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS), of which membership is obligatory, has two members on the ESSS. At the beginning of the period of socio-economic transition, GZS was the only organisation representing employers and enterprises;
  • the Slovenian Employers' Association (Združenje delodajalcev Slovenije, ZDS) has two members on the ESSS. ZDS was founded on 22 February 1994, when, on the advice of the ILO and the International Organisation of Employers (IOE), GZS came to the conclusion that a separate organisation for employers was the best solution. At the beginning of 1997, it had 1,618 member enterprises, which employed around 60% of the private sector labour force and represented 49% of overall company equity; and
  • the Chamber of Crafts of Slovenia (Obrtna zbornica Slovenije, OZS) has one member in the ESSS. This organisation, of which membership is obligatory, is an offshoot of GZS which represents independent craftworkers and small enterprises.

The Slovenian Employers' Association of Crafts (Združenje delodajalcev obrtnih dejavnosti Slovenije, ZDODS) is not represented in the ESSS. Following the example of GZS's establishment of ZDS, ZDODS was established - then under the name Employers' Association OGISTTA- on 23 June 1994. At the beginning of 1997, it had 2,730 members.

All the abovementioned organisations have their headquarters in Ljubljana.

A further small new employers' organisation has been founded, subsequently registered as the Employers' Organisation of Slovenia (Delodajalska organizacija Slovenije, DOS). It has no representative on the ESSS and has its headquarters in Maribor, the second-largest city in Slovenia.

Pursuant to the 1991 Law on Labour Relations, which will cease to be in force on 1 January 2003, collective agreements relating to the whole of Slovenia and for selected economic activities may be concluded between trade unions and GZS, or any other general association or organisation of employers. General and sectoral collective agreements are thus currently concluded on the employers' side by GZS, OZS, ZDS and ZDODS. Tripartite agreements on pay policy are also signed by these four organisations. According to a proposal for a new Law on Collective Agreements issued in 1995, which is currently proceeding through parliament, the conclusion of collective agreements will in future be possible only for individual employers or their representative associations. Until the adoption of the new law determining the representativeness of employers (in the similar way that the representativeness of trade unions is already regulated - see below), the GZS and OZS chambers remain legitimate employers' representatives.

Discussion is currently underway whether the GZS and OZS will in the future be allowed to have representatives on the ESSS. GZS and OZS agree that they will no longer be parties to collective agreements, but they want to remain represented on the ESSS. On the other hand, the trade unions believe that this will mean certain employers being represented twice by two separate organisations. Additionally, claim the unions, the imbalance of power between employers and workers will remain, with trade unions remaining the weaker party in terms of negotiating power and resources. Membership of trade unions is a matter of free choice, but membership of GZS and OZS is obligatory.

Another question is when, and under what criteria, the new employers' organisations will be allowed to have representatives on the ESSS - especially because the number of representatives is limited. It may be that more than five organisations will fulfil the criteria for representation. The Confederation of Trade Unions of Slovenia Pergam (Konfederacija sindikatov Pergam Slovenije, Pergam) argues that GZS and OZS should not be entitled in future to take part in the ESSS's negotiating activities, but should be allowed to take part in discussions.

Trade unions

According to the 1993 Law on the Representativeness of Trade Unions, only the central umbrella trade union organisations officially recognised as representative at the highest national level (ie the most representative organisations) may have representatives on the ESSS. There are four such trade union organisations represented on the ESSS. Their membership is organised in various affiliated branch trade unions in different sectors. The four are:

  • the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS) - the largest union organisation - has two members on the ESSS. According to a telephone survey conducted in September 1994 ('Public opinion images of trade unions'[in Slovene], M Stanojevič and M Omerzu, in Trade unions and corporativism in Slovenia, Social science discussions No. 17-18/1994, Ljubljana) it represented 48.2% of all trade union members in Slovenia. ZSSS is a reformed organisation, originating in the Slovene section of the former Yugoslav trade union. Following reconstitution, it leans to the left of the political spectrum. The democratisation of ZSSS's functioning has involved changes in organisational structure in terms of decentralisation of decision-making within the umbrella organisation. Branch trade unions, which were formerly only parts of the organisational structure of a unified union, have become more independent as part of a confederal organisation. ZSSS has its headquarters in Ljubljana;
  • KNSS - Independence, Confederation of New Trade Unions of Slovenia (KNSS - Neodvisnost, Konfederacija novih sindikatov Slovenije, KNSS) has one member on the ESSS. According to the abovementioned 1994 survey, it was the second largest union organisation, representing 10% of all trade union members. KNSS is a new trade union organisation set up since the change of regime, and its founding congress was held in 30 March 1990. Its headquarters are in Ljubljana and it leans to the right of the political spectrum. In the first years of its existence, KNSS's main problem was setting up a firm organisational structure and rules of functioning;
  • the Confederation of Trade Unions of Slovenia Pergam (Konfederacija sindikatov Pergam Slovenije, Pergam) has one member on the ESSS. Its membership is found mainly in the pulp/paper and printing industries. It was created following a split from ZSSS and its headquarters are in Ljubljana; and
  • the Confederation of Trade Unions ΄90 of Slovenia (Konfederacija sindikatov '90 Slovenije, Konfederacija '90) has one member on the ESSS. Its membership is mainly in the coastal region (municipalities along the Adriatic coast, such as Koper-Capodistria, Izola, Piran and other parts of this region bordering with Italy and Croatia). Its headquarters are in Koper-Capodistria and it was created following a split from ZSSS.

Beyond these four organisations, in specific sectors and occupations there is a larger group of strong and autonomous, mainly white-collar trade unions, in particular in the public social services sector (healthcare, education etc), transport and banking. Many of these originate in splits from ZSSS.

According to the ESSS rules of conduct, the composition of the three five-member groupings in the ESSS must ensure that all interest groups within each area (government, employers and employees) are adequately represented. However, the abovementioned public sector trade unions do not have a representative on the ESSS. They have organised a Coordination of Public Sector Trade Unions, which is not a trade union organisation proper and serves only for the coordination of negotiations at the national multisectoral national level. Because only confederations can have members on the ESSS, this coordinating structure does not have a member, but a representative is always invited to participate at ESSS sessions. On certain topics of common interest to all trade unions, it would be useful for these public sector unions to be represented on the ESSS. However this can be more problematic in cases where the interests of public sector and private sector trade unions may diverge (such as public sector pay). Furthermore, the question remains of how the new trade union organisations will be represented on the ESSS if more than five organisations fulfil the criteria for representation.

Other bodies with tripartite or 'multipartite' structure

Besides the ESSS, there are many other institutions whose governing bodies have a tripartite or 'multipartite' structure, or include employers' and trade union representatives. The most important are those running social security schemes, such as agencies for employment and unemployment insurance, pensions and disability insurance, and heath insurance.

One of the bodies with a multipartite structure is the National Council (Državni Svet, DS). This is the second chamber of parliament, but has relatively weak powers. According to the Constitution of the Republic of Slovenia, the DS it is the representative body for social, economic, professional and local interests and has 40 members. It is composed of:

  • four representatives of employers;
  • four representatives of employees;
  • four representatives of farmers, crafts and trades, and independent professions;
  • six representatives of non-commercial fields; and
  • 22 representatives of local interests.

The DS may:

  • require the National Assembly (Državni Zbor, DZ) to reconsider a law prior to its promulgation (this postpones the passing of a law for one week, and is the DS's strongest power); and
  • convey to the DZ its opinion on all matters within the competence of the DZ.

Commentary

Some time ago, both employers and trade unions were of opinion that a law needed to be adopted in order to strengthen the ESSS's position in areas such as adequate expert and technical support. The argument is that ESSS cannot operate efficiently without adequate support, and sufficient budgetary funds should be provided for its operation. Some trade unions even wanted the ESSS to have the power to propose the adoption of laws to the DZ. However, this is not possible since it is not foreseen in the Slovene Constitution, and the ESSS is not regulated by law.

Now the enthusiasm for a legal basis for the ESSS is diminishing, probably because many other difficult questions need to be resolved, such as the question of the representativeness of employers' organisations. For example, it is not necessary that each party should have an equal number of members on the ESSS, if its decisions must be reached by consensus. Because the number of members in each grouping is limited to five, it is difficult for new organisations to obtain a member in the ESSS. It would be good at least to renew the ESSS rules of conduct, because these rules were drawn up when ESSS began to function. Over time, many parts of these rules have become outdated and should be changed.

It can be observed that over time ESSS's functioning has improved in terms of increased quality and breadth, and thereby its importance has increased too. This is reflected in the contents and the thoroughness of its discussions. At first, the discussions related only to wages and certain short-term matters. Nowadays, the ESSS deals with more fundamental and strategic problems too, such as pensions reform. (Stefan Skledar, on behalf of the Institute for Labour Law, University of Ljublana)

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

Eurofound welcomes feedback and updates on this regulation

Reactie toevoegen