Intersectoral collective agreement on pay concluded in private sector

In May 2008, following lengthy negotiations, the social partners finally concluded the national intersectoral collective agreement on pay adjustment for the private sector for the period 2007–2009. Despite the consensus reached, some trade unions view the agreement as a defeat, as it only determined the rise of the lowest possible basic pay instead of all basic pay for 2008 and 2009.

On 30 May 2008, after long negotiations and considerable conflict (SI0712049I, SI0803019I, SI0803039I, SI0804019I), the social partners in the private sector finally concluded the national private sector intersectoral agreement – entitled the ‘Collective agreement on extraordinary pay adjustment for 2007 and the method of pay adjustment, the refund of work-related expenses and other personal incomes for 2008 and 2009’ (CAMPA). The CAMPA will remain in force until 31 December 2009.

General provisions of CAMPA

For the period 2007–2009, the CAMPA covers employers in the private sector who are not covered by any sectoral collective agreement. For those employers who are covered by a sectoral collective agreement, only the provisions which concern rights and duties not regulated by a relevant sectoral collective agreement will apply.

Regarding the pay provision, the employer and company trade union may agree in writing on a lower amount than that set by the CAMPA for a maximum period of six months, if this contributes to the preservation of jobs. Moreover, the employer and company trade union may agree to prolong this measure.

Pay provisions

Pay determined by an employment contract is composed of the basic pay, part of the pay for job performance and extra payments – in line with Article 126 of the Law on Labour Relations (SI0206101N). A constituent element of pay is the remuneration for business performance, if laid down by a collective agreement or employment contract. On this basis, the following pay provisions have been stipulated by the CAMPA.

Extraordinary one-off basic pay adjustment

The pay increase for 2007 must amount to 5.2%. Companies where the pay increase was lower must increase the pay by the difference between 5.2% and the actual percentage pay increase. Therefore, according to the CAMPA, basic pay for May 2008 must be increased by the difference between 5.2% and the actual percentage pay increase in the company in 2007 (see commentary).

If the employer has already increased the basic pay for the period January 2008 to April 2008 due to unexpectedly high inflation in 2007, this increase is taken into account when calculating the actual pay increase.

Companies must also pay workers the aforementioned basic pay increase for the months of January to April 2008.

Pay adjustment for 2008

The lowest basic pay determined by the collective agreements is to be increased for August 2008 by 3.9%. Therefore, the new monthly amounts of the lowest basic pay for nine tariff classes are as follows (see Table).

New lowest basic pay amounts for nine tariff classes, 2008
Tariff class New basic pay amount (monthly)
1 €356.51
2 €389.10
3 €431.47
4 €477.08
5 €535.74
6 €633.48
7 €714.94
8 €845.28
9 €1,008.20

Source: CAMPA, 2007–2009

If the average annual inflation in the period January to December 2008 exceeds 4.55%, compared with the period January to December 2007, the lowest basic pay determined by the collective agreement should be additionally increased for January 2009 by the difference between 4.55% and the actual average annual inflation.

Pay adjustment for 2009

The lowest basic pay for August 2009, as determined by the CAMPA, is to be increased by 2.3%. If the average annual inflation in the period January to December 2009, compared with the period January to December 2008, exceeds 2.7%, the lowest basic pay determined by the CAMPA is to be additionally increased for January 2010 by the difference between 2.7% and the actual average annual inflation.

Pay adjustment on basis of 2008 and 2009 productivity

The social partners may agree in the sectoral collective agreement on the part of the pay rise which is related to productivity.

Accordingly, if the added value per employee increases in a sector, the companies in the sector are obliged to examine the possibilities of increasing pay in line with the productivity rise in the previous year – according to their profit and loss accounts.

Other issues regulated by CAMPA

Supplements for night work and overtime should amount to at least 30% of basic pay, while supplements for work on Sundays and bank holidays should total at least 50%.

The CAMPA also determines the refund amounts for work-related expenses for 2008 and 2009: more specifically, for meals at work, transport to and from work and business travel. At the same time, the agreement determines the amounts for annual holiday allowances, jubilee rewards and solidarity help.

In terms of the rights and duties of the parties concerned and the method of resolution for disputes, the most important provision relates to the Commission for the Interpretation of the CAMPA, which has six members. Each party must nominate three members and their substitutes, which decide on issues by consensus.

Employers’ response

The employers have reacted far more positively to the CAMPA than the trade unions. The Slovenian Employers’ Association (Zdruzenje delodajalcev Slovenije, ZDS) believes that the CAMPA will contribute to lowering the country’s inflation. At the same time, ZDS is satisfied that the basic pay adjustment due to the unexpectedly high inflation in 2007 remains an extraordinary one-off measure, and that in 2008 and 2009, the existing system of pay adjustment of the lowest basic pay for a proportion of the inflation forecast remains in use. This was the most contentious issue during the negotiations.

Trade union position

The trade unions offered little feedback on the conclusion of the CAMPA. However, as the agreement only determines the rise in the lowest possible basic pay for 2008 and 2009, the KNSS - Independence, Confederation of New Trade Unions of Slovenia (KNSS - Neodvisnost, Konfederacija novih sindikatov Slovenije, KNSS) claimed that the CAMPA constituted a defeat for the trade unions, even though it had signed the agreement.

The trade unions are demanding a rise in all basic pay which is part of the pay determined by the employment contract received by the worker. An increase in the lowest possible basic pay only, as determined by the collective agreements, would mean no real pay rise for workers with the lowest pay rates who are most affected by the currently high inflation levels. These workers would continue to get the statutory minimum wage, despite an increase in the lowest possible basic pay, which remains below the level of the statutory minimum wage (see Commentary).

This is probably why the CAMPA allows for this level to be amended, especially in the case of a substantial change in the inflation levels forecast for 2009.

Commentary

In Slovenia, all of the private sector collective agreements stipulate the pay categories of jobs – of which there are usually nine – on the basis of their requirements, so that differences in pay reflect differences in job requirements. The latter are determined on the basis of the level of education required to perform a certain job. These nine categories are known as ‘tariff classes’.

The collective agreements determine the lowest possible basic pay amounts for each tariff class, in order to safeguard basic pay (see Table). The first tariff class applies to jobs involving simple tasks, which do not even require a completed primary education and which have the lowest starting pay. The ninth tariff class applies to high-demanding jobs with a lot of responsibility, which require doctoral degrees as a rule. In each company, the various jobs are classified according to these nine tariff classes.

The problem with the pay scales determined by the private sector collective agreements is that the statutory minimum wage (SI0608019I) is higher than the first three or four lowest basic pay rates, which are therefore useless as a safeguard for basic pay. On 2 April 2008, the Law Amending the Law on the Determination of Minimum Wage was adopted. It determined the extraordinary increase of the minimum wage, which then amounted to €566.53 and was higher than as many as five of the lowest basic pay rates determined by the CAMPA for August 2008 (see above).

Štefan Skledar, Institute of Macroeconomic Analysis and Development

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