Slovenia: Latest working life developments – Q4 2016
An agreement on public sector wages, union representation for precarious workers, better income tax legislation for minimum wage recipients and companies, plus new rules for social dialogue, are the main topics of interest in this article. This country update reports on the latest developments in working life in Slovenia in the last quarter of 2016.
Public sector wage deal reached for 2017–2019
A wage agreement for the central public sector, covering 2017–2019, was concluded on 16 December 2016 between the government and public sector unions. Some austerity measures will be further implemented in 2017, which will entail giving public servants an annual leave bonus based on their position on the wage scale and giving them premiums of collective supplementary pension insurance according to their age. Some austerity measures will also be prolonged until the end of 2018, including the absence of performance-related bonuses and lower workload-related bonuses. Regular promotions will be, as in 2015, paid each year from December. The anomalies between different occupational groups of public servants will also be eliminated in 2017.
The latest agreement means the public sector wage bill will increase in 2017 by €56 million (1.3%) year on year; combined with the effects of the 2015 agreement, this will mean an increase of €166 million (3.8%).
New trade union for precarious workers established
In October 2016, one of the largest trade union confederations, the Association of Free Trade Unions of Slovenia (ZSSS) established a new trade union, the Trade Union of Precarious Workers (SP). This will represent the most vulnerable workers, such as taxi drivers, newspaper deliverers, call centre employees and students. The union also wants to represent translators, architects, designers and anyone else in precarious employment. Most precarious workers in Slovenia are young.
The new union’s main aim is to fight precarious employment and the further flexibilisation of work. Its representatives warn that even reputable and family-friendly companies that pay good wages are breaching labour legislation on precarious employment. The union will offer its members:
- legal representation and advice;
- information on their employers’ solvency;
- assistance with enforcing the law.
It also plans to educate workers about their rights and how to collect any money they are owed. Its mission is to achieve decent pay for decent work and equality for all workers.
Income tax legislation amendments adopted
In October 2016, an amendment to income tax legislation was published. This will mean some substantial changes to wage taxation from January 2017.
First, the income threshold for eligibility for higher additional general tax relief is increased by €300. The tax legislation follows one year on from the change in the minimum wage legislation (since 2016, three allowances for unfavourable working hours have been excluded from the minimum wage – those for night work, Sunday work and work on public holidays). Recipients of the minimum wage, who often work unfavourable hours, will again be in a tax neutral position compared with the period before 2016.
Secondly, tax relief for performance bonuses paid once a year has been approved. Part of the remuneration for business performance bonuses (as well as Christmas bonuses and 13th month salaries) – up to 70% of the average monthly earnings in Slovenia – will once in each calendar year be excluded from the taxable income from employment (only social security contributions will be paid for that part of the bonuses).
New rules for social dialogue
In December 2016, the Slovenian government and social partners signed new rules on the functioning of the main national body for social dialogue, the Economic and Social Council of Slovenia (ESSS). The council’s jurisdiction is limited to strategic issues, systemic legislation and key documents. The ESSS relies, for its day-to-day work, on the current president and two representatives of the social partners but, for specific matters, the ESSS can organise a negotiation group and three expert committees, which can deal independently with social dialogue issues, different opinions, recommendations and attitudes on the issues discussed. The ESSS is tripartite, composed equally of government representatives, employers and workers.
Lifelong living society strategy in preparation
Slovenia’s lifelong living strategy (Strategija-dolgožive-družbe) is being prepared. An ageing population will have a major impact on Slovenian society and the strategy will address topics which are of particular importance in terms of the debate on demographic ageing – labour market adjustments, attracting a foreign labour force and lifelong learning. The education and training system, in addition, will have to respond to changes in the labour market because people’s longer working lives require that they improve their skills to increase their flexibility and employability. The final date for the adoption of strategy by the government is April 2017.
Improvements in working conditions and industrial relations are expected soon, in line with recent developments in Slovenia in the areas of social dialogue, trade union representation, wage negotiations and income tax legislation. After employer organisations withdrew from social dialogue at the beginning of 2016, communication and social dialogue capacity-building between the social partners remained limited. Now that the new rules of social dialogue have been redefined, improvements are expected in collective bargaining as well as in working conditions.