Industrial relations

Slovenia: Latest developments in working life Q4 2019

An increase in the minimum wage and a new collective agreement for the construction 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 2019.

Companies prepare for new minimum wage

As of 2020, the monthly minimum wage will increase to €700 net, excluding any bonuses. This follows on from the 2019 minimum wage rise to €667 (from €638 net).

Companies are preparing for the 2020 minimum wage increase in different ways, with some planning to optimise their operations and others considering moving production abroad. To help companies mitigate the impact of the minimum wage reform, the Chamber of Commerce and Industry of Slovenia (GZS) has prepared a set of recommendations with an emphasis on ‘structural change of pay and reasonable preservation of pay ratios’. Another of the proposed recommendations is the inclusion of bonuses (for shift work, part-time shifts, stand-by time, employee performance, difficult or risky working conditions and the overall years of service) in the basic pay for specific jobs. This would allow companies to extract bonuses from the minimum wage without negatively affecting employees. Trade unions are sceptical of these recommendations and warn that many employees may be disappointed with the level of their pay at the beginning of 2020. Lidija Jerkič, head of the Association of Free Trade Unions of Slovenia (ZSSS) said that ‘employers have been quick to start changing pay models, not at the level of sectors, but at the level of companies, where they are applying options to cut or scrap bonuses’. [1]

Sonja Šmuc, leader of GZS stated that the purpose of the recommendations was not to reduce or limit the rights of employees regarding the statutory minimum wage, but to find a legitimate win–win solution for both sides in a bilateral social dialogue at sectoral and company level. [2] Metka Penko Natlačen, legal adviser at the GZS, stated that a logical ‘follow-up’ to the minimum wage increase would be a change in the pay model with a focus on bonuses. [3]

Collective agreement signed for construction sector

Social partners negotiated a new collective agreement for the construction sector at the end of 2019, involving an increase in work allowances for remote construction sites, meal reimbursements, annual leave pay and jubilee awards (for length of service at 10, 20, 30 or 40 years). [4]

However, employers and unions warn that minimum basic wages remain unchanged and incentives for young people to work in the construction industry are lacking. In addition, they state that opening up the market to other countries is also a problem. There are 67,500 people working in the construction sector, but the main challenges are that the workforce is rapidly ageing, the work is demanding, wages are not encouraging and the value added in this sector is one of the lowest in Slovenia.

Oskar Komac, Secretary of the Trade Union of Construction Industry Workers (SDGD), stated that while changes to the wage rate will improve the situation of employees, the union's request for the lowest basic wage to become the minimum wage – which would mean a 100% increase – was not accepted by the employers. This means there is still a large gap between the what the company pays its employees and the minimum basic wage. Trade unions are also concerned about social dumping, since construction workers are often imported from the countries where wages are even lower.

In March 2020, social partners will continue negotiations on wages after the effects of the new minimum wage can be seen. As part of these discussions, there will be an opportunity to negotiate on the extended validity of the sectoral collective agreement and the establishment of parity funds, [5] which would provide additional stability in the construction market. Extended validity of the collective agreement would oblige all companies working in the construction sector in Slovenia to operate under the same minimum conditions.


Footnotes

  1. ^ The Slovenia Times (2019), Companies gearing up to adapt to new minimum wage rules 18 November.
  2. ^ GZS (2019), Priprave na uveljavitev zakona o minimalni plači – GZS poziva k oblikovanju zakonitih rešitev na ravni dejavnosti , 2 December.
  3. ^ The Slovenia Times (2020), Wage compression calls for wage reform , 5 January.
  4. ^ GZS (2019), Gradbenikom povečali povračila stroškov za malico, regres za letni dopust in jubilejne nagrade , 19 December.
  5. ^ Zveza Svobodnih Sindikatov Slovenije (2019), Spremembe v gradbeni dejavnosti: Aneks podpisan, toda boj se nadaljuje 19 December.

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