Slovenia: Representativeness of the European social partner organisations – Personal services sector

  • Observatory: EurWORK
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  • Published on: 20 Styczeń 2010



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The aim of this representativeness study is to identify the respective national and supranational actors (i.e. trade unions and employer organisations) in the field of industrial relations in the personal services sector in Slovenia. In order to determine their relative importance in the sector’s industrial relations, this study will, in particular, focus on their representational quality as well as on their role in collective bargaining.

Introduction

The personal services sector is very small in Slovenia. The nature of companies in the sector varies significantly, from large chains to small salons that are usually family-run. For the most part, however, firms are usually small or very small. There is no collective bargaining at the level of the sector, but all workers in the sector are covered by the collective agreements concluded by the Chamber of Craft and Small Business of Slovenia with obligatory membership for companies and sole proprietors conducting craft or craft-like activities. There is one trade union that covers craft workers, including personal services, and one company-level trade union.

1. Sectoral properties

The personal services sector covers almost 5,000 workers. The sector has a large majority of women workers (90.1%) and a significant number of self-employed workers. The number of employees in the hairdressing sector amounts to 88% of all workers. An increase in the level of male employment within the last 10 years has been made in hairdressing services, while the number of male workers in the field of beauty treatment has remained the same. Many of the employees work part-time and only stay in the sector for a short time. The sector has a significant number of self-employed workers and undeclared work is common.

Employment in beauty treatment increased by 40% between 1995 and 2006 as the number of pedicure workers doubled. The nature of companies in the sector varies significantly from large domestic chains to small salons that are usually family-run. For the most part, however, firms are usually small or very small. At the beginning of 1995 there were still some big companies (e.g. Lassana, Frizerstvo Maribor) in existence, some of them were liquidated and some have successfully transformed (e.g. Lassana). In the meantime, new successful companies emerged (e.g. Mic Styling). One of the biggest companies, Lassana Hairdressing Company, is a joint-stock company established in 1993 after a reorganisation of the public company Brivsko frizersko podjetje Ljubljana. The company operates 16 salons and offers hairdressing services as well as pedicures, manicure and make-up. Their shareholders are mainly members of the staff, which makes them reliable co-workers. The company employs 165 hairdressers. Among the new successful companies the most visible is Sojer d.o.o., with two independent brand names Mic Styling and Simple operating more than 40 salons and employing about 150 people.

The sector is defined by law as craft or craft-like activity according to the Decree Determining Craft Activities and Master Craftsman Titles and Craft-Like Activities (OJ RS, No. 117/2004) and by the Small Business Act (OJ RS, No. 40/2004). The characteristics of craft activities are: they are production or service activities (usually based on individual orders), production is small scale, mass production is not a major part of the activities and they do not have conveyor belts or automated processes. A craft-like activity is a gainful activity which is traditionally linked to a craft activity. The interests of companies (legal persons) and sole proprietors are totally different (e.g. regarding VAT, rules of operating, hiring, educating workers etc.) and any compromise within the Chamber of Craft and Small Business is hard to find. This is especially true if the fee paid by a big company is the same as the fee paid by an individual.

One of the main characteristics is seasonal and daily peaks and lows, and the need to adjust the workforce and opening hours to clients’ needs.

  1995 2006**
Number of employers 38 138 companies individual private entrepreneurs 2100
Aggregate employment* 4,123 4,923
Male employment* 251 451
Female employment* 3,872 4,472
Aggregate employees    
Male employees    
Female employees    
Aggregate sectoral employment as a % of total employment in the economy 0.55 0.61
Aggregate sectoral employees as a % of the total number of employees in the economy 0.55 0.61

Source: Statistical Office of the Republic of Slovenia (SORS), Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES).

* employees plus self-employed persons and agency workers

** or most recent data

2. The sector’s trade unions and employer associations

This section includes the following trade unions and employer associations:

1. trade unions which are party to sector-related collective bargaining (in line with the conceptual remarks outlined in the accompanying briefing note, we understand sector-related collective bargaining as any kind of collective bargaining within the sector, i.e. single-employer bargaining as well as multi-employer bargaining. For a definition of single- and multi-employer bargaining, see 4.2)

As most of the workers in the sector are employees and employers at the same time there is only one trade union, the Trade Union of Craft Employers (Sindikat Obrtnih Delavcev Slovenije, SODS) which is a member of the Association of Free Trade Unions of Slovenia (Zveza Svobodnih Sindikatov Slovenije, ZSSS).

2. trade unions which are members of the sector-related European Union Federation (i.e. UNI-EUROPA – Hair and Beauty),

3. employer associations which are a party to sector-related collective bargaining,

The Slovenian Chamber of Craft and Small Business (Obrtno-podjetniška zbornica Slovenije, OZS) has 30 professional sections (among them hairdressers and cosmetics) covering the sector that monitor the working conditions and business operations of their members as well as perform numerous activities designed to improve business operations (e.g. quality, standardisation, introduction of modern technologies etc.). They also propose legislative changes, represent the interests of their members when concluding collective branch agreement within the bodies of the Chamber of Craft and Small Business of Slovenia and other institutions, as well as take care of the regular and additional professional education of their members. They also organise common promotional activities for their members and try to achieve respect of good business practices; they support rational use of energy and protection of the environment. The Chamber of Craft and Small Business of Slovenia, as well as the 62 Regional Chambers, are led by voluntary craft functionaries.

Association of Employers in Craft and Small Business of Slovenia (Združenje delodajalcev obrti in podjetništva Slovenije, ZDOPS)

The Chamber of Small Business and Trade (until 1 January 2008 called The Small Business Association) was founded in 1975 as part of the Chamber of Commerce and Industry of Slovenia. Given that SMEs are more vulnerable than other enterprises its main mission is to assist and support SMEs in various ways. Currently there are around 6,500 members engaged in 80 different business activities, of which around 30 are in the personal services sector.

4. employer associations (business associations) which are members of the sector-related European Business Federation (i.e. COIFFURE EU),

Please see the list of UNI-EUROPA – Hair and Beauty affiliates section in the accompanying ANNEX F or the notion of ‘sector-related’, see the conceptual remarks in the accompanying background briefing note. Please be reminded that trade unions and employer associations should be excluded where their domain covers, for instance, only physical well-being activities according to NACE 93.04, but not any part of hairdressing and other beauty treatment activities according to NACE 93.02!

OZS, Hairdressers Section, is a member of COIFFURE EU. The section has 2,500 members. Membership is obligatory for every company and craftsman engaged in hairdressing.

OZS, Cosmetics Section, is also a member of CIDESCO. According to the section data it has about 770 members, companies and sole proprietors dealing with one of the NACE activities: 93.022 and 93.023.

2a Data on trade unions

Trade Union of Craft Employers

2a.1 Type of membership (voluntary vs. compulsory)

Voluntary.

2a.2 Formal demarcation of membership domain (e.g. white-collar workers, private-sector workers, personal services employees, etc.)

Employees in the craft sector.

2a.3 Number of union members (i.e. the total number of members of the union as a whole)

15,000

2a.4 Number of union members in the sector

No data.

2a.5 Female union members as a percentage of total union membership

50%

2a.6 Domain density: total number of members of the union in relation to the number of potential members as demarcated by the union domain (see 2a.2)

12%

2a.7 Sectoral density: total number of members of the union in the sector in relation to the number of employees in the sector, as demarcated by the NACE definition

No data.

2a.8 Sectoral domain density: total number of members of the union in the sector in relation to the number of employees which work in that part of the sector as covered by the union domain

2a.9 Does the union conclude collective agreements?

Yes.

2a.10 For each association, list their affiliation to higher-level national, European and international interest associations (including cross-sectoral associations)

The SODS is a member of the Free Trade Union of Slovenia (Zveza Svobodnih Sindikatov Slovenije, ZSSS). ZSSS is a member of UNI-Europa.

2b Data on employer associations

2b.1 Type of membership (voluntary vs. compulsory)

  • OZS, Hairdressers Section, has 2,500 members and membership is obligatory. The cosmetics sector has about 770 members. The total number of OZS members is over 50,000. The association will be representative till May 2009.
  • The Association of Craft Employers has voluntary membership and about 2,700 members; there is no data on membership from the personal services sector. There is currently a big campaign to increase membership.
  • Some 35 companies and sole entrepreneurs are members of the The Chamber of Small Business and Trade, Slovenian Chamber of Commerce (GZS). Membership is voluntary.

2b.2 Formal demarcation of the membership domain (e.g. SMEs, small-scale crafts/industry, personal services enterprises, etc.)

The membership domain is in accordance with the provisions of the Craft Act

2b.3 Number of member companies (i.e. the total number of members of the association as a whole)

  • OZS :more than 50,000
  • ZDOPS : 2,700
  • GZS :18,600

2b.4 Number of member companies in the sector

  • As membership is obligatory, all companies are members of OZS, 2,500 from hairdressing and 770 from the cosmetics sector.
  • No data for ZDOPS is available.
  • The GZS has 30 members.

2b.5 Number of employees working in member companies (i.e. the total number of the association as a whole)

  • OZS: 140,000 employees.
  • No data for ZDOPS is available.
  • GZS: Around 200 employees (E).

2b.6 Number of employees working in member companies in the sector

  • OZS: 140,000 employees.
  • No data for ZDOPS is available.
  • GZS: Around 200 employees (E).

2b.7 Domain density in terms of companies: total number of member companies of the association in relation to the number of potential member companies as demarcated by the association’s domain (see 2b.2)

  • OZS: 100%
  • GZS: 16.7%

2b.8 Sectoral density in terms of companies: total number of member companies of the association in the sector in relation to the number of companies in the sector, as demarcated by the NACE definition

  • OZS: 100%
  • GZS: 1.4%

2b.9 Sectoral domain density in terms of companies: total number of member companies of the association in the sector in relation to the number of companies which operate in that part of the sector as covered by the association’s domain

2b.10 Domain density in terms of employees represented: total number of employees working in the association’s member companies in relation to the number of employees working in potential member companies, as demarcated by the association’s domain (see 2b.2)

  • OZS: 100%
  • GZS: 40%

2b.11 Sectoral density in terms of employees represented: total number of employees working in the association’s member companies in the sector in relation to the number of employees in the sector, as demarcated by the NACE definition

  • OZS: 100%
  • GZS: 3.5%

2b.12 Sectoral domain density in terms of employees represented: total number of employees working in the association’s member companies in the sector in relation to the number of employees working in companies which operate in that part of the sector as covered by the association’s domain

2b.13 Does the employer association conclude collective agreements?

Yes, OZS, ZDOD ZDOPS and GZS conclude collective agreements.

2b.14 For each association, list their affiliation to the higher-level national, European and international interest associations (including cross-sectoral associations).

  • OZS is a member of UEAPME.
  • OZS, Hairdressers Section, is a member of COIFFURE EU. The section has 2500 members. Membership is obligatory for every company and craftsman conducting activities within the field of hairdressing.
  • OZS, Cosmetics Section, is also a member of CIDESCO. According to the section data it has about 770 members, companies and sole proprietors dealing with one of the NACE activities: 93.022 and 93.023.

3. Inter-associational relationships

3.1. Please list all trade unions covered by this study whose domains overlap.

n.a.

3.2. Do rivalries and competition exist among the trade unions, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?

No, there is no rivalry or competition between the trade unions in the sector.

3.3. If yes, are certain trade unions excluded from these rights?

At the national level only the SODS is representative and able to sign sector collective agreements. There are no other trade unions covering that sector.

3.4. Same question for employer associations as 3.1.

OZS, ZDOPS and Chamber of Small Business and Trade, GZS.

3.5. Same question for employer associations as 3.2.

Up to now the sector covered all employer associations and there was no rivalry or competition. There is some competition as a result of the changed status of the Chamber of Commerce and Industry of Slovenia and the competencies of OZS and ZDOPS, as the OZS has the right to conclude CA only till 1 of May of 2009 (due to obligatory membership).

3.6. Same question for employer associations as 3.3.

No. In accordance with the new Collective Agreements Act (Zakon o kolektivnih pogodbah), only associations with voluntary membership have the right to conclude collective agreements (from May 2009).

3.7. Are there large companies or employer associations which refuse to recognise the trade unions and refuse to enter into collective bargaining?

No.

4. The system of collective bargaining

Collective agreements are defined in line with national labour law regardless of whether they are negotiated under a peace obligation.

The collective agreement on craft and small business was concluded after three years of negotiation (after the renunciation of the collective agreement by the employers’ organisation and the trade union’s refusal to accept it) and has been effective since 1 August 2008. It was signed by all social partners and concerns the companies and sole proprietors employing workers in the craft and small business (including personal services) sector. The collective agrement lays down eight pay categories of jobs on the basis of their requirements, so that differences in pay relate to differences in job requirements. Job requirements are determined in relation to the level of education required to perform a certain job. These eight categories are known as 'tariff classes'. The first tariff class (simple tasks or work) represents those jobs that do not even require completed primary education and have the lowest starting pay. In each company, the various jobs are classified into these eight tariff classes. For each tariff class the starting pay – the lowest possible basic pay – is determined as a safeguard. Basic pay is a part of the pay determined by an employment contract. According to Article 126 of the Law on Labour Relations (LLR) (SI0206101N), pay determined by an employment contract is composed of the basic pay, a part of the pay for job performance and extra payments. A constituent element of the pay is remuneration for business performance, if laid down by a collective agreement or employment contract. The cost of the collective agreement is determined at the level of €4 per year per employee, divided among the trade union and the association of employers.

The social partners are also signatory parties of the collective agreement on the special wage adjustment for the year 2007 and the collective agreement on the wage adjustment method, reimbursement of work-related expenses and other personal income for the period 2008 - 2009. The collective agreement brings the previously known framework of work-related expenses for the current and the next year to the employers; as far as this year is concerned it has implemented the already negotiated solution, the Agreement on a Special Wage Adjustment (as a response to unexpectedly high inflation). The reimbursement of work-related expenses such as food and work-related travel, holiday bonuses, birthday premiums and payments in time of need will also be provided in the next two years.

4.1. Estimate the sector’s rate of collective bargaining coverage (i.e. the ratio of the number of employees covered by any kind of collective agreement to the total number of employees in the sector).

An important characteristic of collective agreements in Slovenia is that they apply to all employees, regardless of whether the workers are members of a trade union. This advantage is guaranteed to them by the fact that collective agreements on a national level (activities and general) are concluded only by the representative organisations of trade unions. The effect of a representative trade union’s actions is valid for all employees. For employers in the personal services sector this representation is guaranteed by a provision of the law granting obligatory membership and consequently the authority of the Chamber of Craft and Small Business of Slovenia to conclude collective agreements. The legal effect of such collective agreements is binding for all employers. In the case of personal services, as there is no sectoral agreement the employer uses the general (cover) collective agreement which, together with the law, sets out the guaranteed minimum rights. Consequently the coverage ratio is 100%.

4.2. Estimate the relative importance of multi-employer agreements and of single-employer agreements as a percentage of the total number of employees covered. (Multi-employer bargaining is defined as being conducted by an employer association on behalf of the employer side. In the case of single-employer bargaining, it is the company or its subunit(s) which is the party to the agreement. This includes cases where two or more companies jointly negotiate an agreement.)

There are no multi-employer agreements in the personal services sector at the moment. A single-employer agreement exists only for the hairdressing company Cesalnice Ljubljana, which is, according to the trade union representative, the only Slovene company with a company trade union. The company employs 60 people who are all covered by the company agreement and this represents 1.2% of all employees in the sector who are covered by any kind of collective agreement.

4.2.1. Is there a practice of extending multi-employer agreements to employers who are not affiliated to signatory employer associations?

No, because until recently the signed agreements have had a general validity.

4.2.2. If there is a practice of extending collective agreements, is this practice pervasive or rather limited and exceptional?

The new Collective Agreements Act stipulates that only the signatories of the collective agreements are covered by the collective agreements, but it also envisages general validity. This means that a collective agreement covers all workers employed by the employer or employers for whom a collective agreement is valid, if the collective agreement has been concluded by one or more representative trade unions.

A collective agreement for one or more branches - signed by one or more representative associations of trade unions and one or more representative associations of employers - could be extended by the Minister for Labour, at the request of one of the parties to the collective agreement. The Minister decides on the extension of the collective agreement or some part, if the collective agreement was signed by one or more representative associations of trade unions and one or more representative associations of employers – which represent more than half the workers employed in the companies that would be affected by the extension of the collective agreement.

4.3. List all sector-related multi-employer wage agreements* valid in 2006 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered.

* Only wage agreements which are (re)negotiated on a reiterated basis.

For the notion of ‘sector-related’, see the conceptual remarks in the accompanying briefing note. Please be reminded that agreements should be excluded where their purview covers, for instance, only physical well-being activities according to NACE 93.04, but not any part of hairdressing and other beauty treatment activities according to NACE 93.02. In the case of regionally differentiated, parallel agreements, an aggregate answer explaining the pattern may be given.

There are no sector-related multi-employer wage agreements in Slovenia, since no sector collective agreement for the personal services sector exists at present, only the Collective Agreement for Craft and Small Business, as mentioned above.

At the national level there is a collective agreement on the special wage adjustment for the year 2007 and a collective agreement on the wage adjustment method, reimbursement of work-related expenses and other personal income for the period 2008 - 2009, signed in June 2008 (Kolektivna pogodba o načinu usklajevanja plač, povračilu stroškov v zvezi z delom in regres za letni dopust) which also covers employees in the personal services sector.

At the company level there is a valid sector-related single-employer wage agreement, signed by the company trade union of Cesalnice Ljubljana, the only company trade union that exists (Sindikat Cesalnice Ljubljana), and by the company representative of Cesalnice Ljubljana. The company wage agreement was signed, along with the company collective agreement, in 2002 and exceeds the pay, participation in profit, holiday bonuses and reimbursement of work-related expenses of the national collective agreement.

Sector-related multi-employer wage agreements
Bargaining parties Purview of the sector-related multi-employer wage agreements
  Sectoral Type of employees Territorial
       
       

4.4. List the sector’s four most important collective agreements (single-employer or multi-employer agreements) valid in 2006 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered. Importance is measured in terms of employees covered.

The four most important agreements in terms of employees covered
Bargaining parties Purview of the agreements
  Sectoral Type of employees Territorial
       
       
       
       

5. Formulation and implementation of sector-specific public policies

5.1. Are the sector’s employer associations and trade unions usually consulted by the authorities in sector-specific matters? If yes, which associations?

According to our sources in trade unions and employer associations, they are not consulted by the authorities in sector-specific matters.

5.2. Do tripartite bodies dealing with sector-specific issues exist? If yes, please indicate their domain of activity (for instance, health and safety, equal opportunities, labour market, social security and pensions etc.), their origin (agreement/statutory) and the interest organisations having representatives in them:

Sector-specific public policies*
Name of the body and scope of activity Bipartite/tripartite Origin: agreement/statutory Trade unions having representatives (reps) Employer associations having reps.
         
         

* Sector-specific policies specifically target and affect the sector under consideration.

6. Statutory regulations of representativeness

6.1. In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.

The Collective Agreements Act defines general rules for concluding collective agreements and does not limit the right to conclude collective agreements only to the representative trade unions. However, parties who are representative may be seen as more serious partners in the bargaining procedures, be more respected and have greater influence.

The Law on Representative Trade Unions (LRTU) (SI0210102F) stipulates that the representative trade unions shall sign contracts with general validity. Furthermore, it defines representative trade unions as those which are democratic, have open membership, ensure functional freedom of the union, and put into effect membership rights and obligations; have been operating without interruption for at least the last six months; are independent of state organs and employers; finance themselves primarily through union dues and their own sources; and have a certain number of members.

An association or confederation of trade unions – which covers the territory of the state and which includes trade unions from different branches, activities or professions – has to represent at least 10% of the workers from individual branches, activities or professions. While those trade unions which are not members of an association or confederation shall also be representative, they should represent at least 15% of the workers in individual branches, activities, professions, municipalities or wider local communities. The same applies to a trade union within an organisation.

6.1. In the case of the trade unions, do statutory regulations exist which establish criteria of tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.

In order for social partners to participate in the tripartite Economic Social Council (SI0207103F) and to be entitled to be consulted in matters of public policy, trade unions must meet the criteria of representativeness.

The representative trade union confederations are as follows: the Association of Free Trade Unions of Slovenia (ZSSS), the Confederation of New Trade Unions of Slovenia (KNSS ), the Confederation of Trade Unions of Slovenia Pergam (Pergam), the Trade Union Confederation 90 of Slovenia (KS 90), the Union of Workers` Solidarity (Zveza delavskih sindikatov Slovenije - Solidarnost), the Slovene Association of Trade Unions - Alternativa (Slovenska zveza sindikatov Alternativa) and the Confederation of Trade Unions of the Public Sector of Slovenia (Konfederacija sindikatov Javnega sektorja Slovenije). (SI0712029I)

6.3. Are elections for a certain representational body (e.g. works councils) established as criteria for trade union representativeness? If yes, please report the most recent electoral outcome for the sector.

No.

6.4. Same question for employer associations as 6.1.

The Chambers of Commerce Act defines the criteria of representativeness of Chambers of Commerce: a chamber of commerce is representative when it has members whose sales amount to at least 10% of sales of the whole economy for the last fiscal year and that has members which represent at least 5% of companies that could be members of the chamber of commerce.

6.5. Same question for employer associations as 6.2.

In order for social partners to participate in the tripartite Economic Social Committee and to be entitled to be consulted in matters of public policy, employer organisations must meet the criteria of representativeness.

The representative employer associations are as follows: the Chamber of Commerce and Industry of Slovenia (GZS), the Association of Employers of Slovenia (ZDS) and the Chamber of Craft and Small Business of Slovenia (Obrtno-podjetniška zbornica Slovenije, OZS), the Chamber of Trade (Trgovinska Zbornica Slovenije) and the Association of Employers in Craft and Small Business of Slovenia (ZDOPS). (SI0712029I)

6.6. Are elections for a certain representational body established as criteria for the representativeness of employer associations? If yes, please report the most recent outcome for the sector.

No.

7. Commentary

Personal services maintain many of the trends that have traditionally differentiated it from other industries and services: a predominance of small businesses, a high percentage of women and young workers, and extensive part-time work. These trends also explain the traditional low trade union density in the sector and the weakness of collective bargaining in terms of effective regulation of employment conditions.

According to representatives of trade union and employer associations the social dialogue in the sector has deteriorated, there are some tensions and a low level of cooperation amongst members themselves - being employers and employees at the same time.

The main issues of the dialogue in the sector concentrate on health and safety at the work place. It is an important topic given that individuals working in hairdressing may experience problems in several areas: regular contact with chemical products, frequent non-ergonomic postures, training and lifelong learning and working conditions (i.e. information and consultation, fair wages and decent benefits, the reconciliation of private and professional life and the censure of undeclared work).

Another major organisational change is currently taking place in the Association of Employers in Craft and Small Business of Slovenia, which will in May 2009 be the only partner to conclude a collective agreement in the name of craft employers. Membership is very low (2700 members), there is also some conflict between the OZS and ZDOPS relating to financing (OZS reduced the financing of ZODDS by 50% in 2008) and ZDOPS fears losing representativeness.

There may also be serious conflicts of interest between companies (obligatory members of OZS and voluntary members of ZDS and GZS as better suited to represent their interests) and craftsmen. The companies claim that their interests are very poorly represented.

Samo Pavlin and Bogumila Plachtej, Centre for Organisational and Human Resources Research, University of Ljubljana

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