Tripartism examined

In 2003, tripartite dialogue between trade unions, employers and the state has been operational in Slovakia for more than a decade. At national level, the main forum for tripartism is the Tripartite Economic and Social Concertation Council, whose main activity is issuing opinions on measures proposed by the government in the field of economic and social policy, and on occasion concluding'general agreements' on such issues. There are also some efforts to support tripartism at regional level, while public labour market bodies have a tripartite structure. Although national-level tripartism is operational again after a two-year break during 1997-8, and was given a legal framework in 1999, the social partners and the government have not been able to reach on a new general agreement since 2000.

Since 1990, the relationships between the social partners and the state have played an important role in the process of economic and social transformation in Slovakia. Although the transformation process was not entirely without conflicts during the 1990s and early 2000s, disputes between the social partners did not result in any serious industrial action. Indeed, after Slovakia became independent in 1993, no genuine strikes were recorded until January-February 2003, when railway workers held two stoppages (SK0306101F). Over this period, as a result of privatisation and the development of a market economy, the role of the state in the economy has been redefined. This new role has manifested itself in a reduction of direct interventions by the state authorities in the activities of individual sectors, enterprises and plants, and in efforts to influence the economy more indirectly through the tools of tax and fiscal policy. In the industrial relations area, the state has restricted itself to setting the legal framework for the labour market and social policy, including the rules for collective bargaining (SK0210102F) - though it should be noted that the state is still a significant employer in the public services (eg education, healthcare and railways). The main role of the state in the social dialogue which has developed in Slovakia is the fulfilment of various tasks within the tripartite'concertation' process, involving the employers and the employees representatives at the top level or, in some cases, at sector level.

Tripartite concertation

Tripartite concertation was established in the early 1990s, after the 1989 revolution in the former Czechoslovakia. In late 1990, the federal government decided in cooperation with the Czech and Slovak national governments and representatives of newly-formed employers' organisations and trade unions to establish federal, Czech and Slovak Tripartite Economic and Social Concertation Councils (Rada hospodárskej a sociálnej dohody, RHSD). Tripartism was established with the aim of allowing the government to carry out the transformation process in cooperation with the newly formed social partner organisations. At the same time, it aimed to achieve consensus on the goals of economic and social development in order to avoid social tension and create the conditions for preserving'social peace' as far as possible. Although the idea of tripartism was quite new, all parties involved soon reached such a consensus and a federal-level'general agreement' (Generálna dohoda) was signed for 1991, followed by separate Czech and Slovak general agreements. Similar general social pacts were signed for 1992.

From 1993, the government of the independent Slovak Republic also adopted the idea of tripartism. The Slovak Tripartite Economic and Social Concertation Council (RHSD) has continued its operation in a practically unchanged form, with seven representatives each from trade unions, employers' organisations and the government, plus a secretariat supported by the government. The social partners (SK0208102F) are represented by the Confederation of Trade Unions of the Slovak Republic (Konfederácia odborových zvazov Slovenskej republiky, KOZ SR) and the Federation of Employers´ Associations of the Slovak Republic (Asociácia zamestnávatelských zvazov a zdruzení Slovenskej republiky, AZZZ SR). For employers' organisations and trade unions, membership of the RHSD is based on their representativeness, with a requirement that they be influential in the economy, represent at least 10% of the active population and be active in at least five of the country's eight regions.

According to its agreed rules, the RHSD is entitled to draw up statements on all important measures proposed by the government in the area of economic and social policy, and its operation may result in the conclusion of general social agreements. The RHSD thus deals with and gives opinions on those issues on the government agenda which relate to negotiations among the parties, and on proposed legislation with implications for employment, industrial relations, working conditions and other important economic and social issues. Some outcomes of the RHSD's tripartite concertation may also form the starting point for sectoral collective bargaining - for example, RHSD agreements on the national minimum wage (SK0210101N) play this role. The outcomes of tripartite concertation do not have legally binding status. The RHSD establishes permanent and temporary tripartite committees to deal with particular topics.

General agreements

The Slovak government has signed five general social agreements with the social partners, for 1993, 1994, 1995, 1996 and 2000. The agreed measures related mainly to the duties of the government and the implementation of the necessary economic and social reforms. However, the application of these measures did not always respond appropriately to the rapid increase in unemployment and decrease in real wages in the mid-1990s. This fact contributed to increased tension between the three parties. Disagreements culminated in 1996-7 when the government proposed a new wage regulation. Although the social partners did not agree with the proposal, the government took action anyway and the social partners, especially the trade unions, refused to sign a general agreement for 1997. They also broke off the usual tripartite negotiations at the RHSD, though the government tried to maintain cooperation with the social partners outside the tripartite RHSD, eg by asking for their opinions on government proposals. Official tripartism did not operate during 1997 and 1998 but the social peace was not broken and the transformation process continued.

In 1999, when a new government came into power, tripartite negotiations at the RHSD resumed. Trade union representatives initiated discussions on amending the'gentlemen's agreement' basis for tripartism and making tripartite agreements more binding on the parties involved. The outcome of this discussion was the adoption of a law on tripartism in 1999, when parliament approved Act No. 106 of 1999 on Economic and Social Partnership. According to this Act, the government is obliged to submit for tripartite negotiations in the RHSD all proposals for measures which have a significant impact on the living standards of the population. Nevertheless, the new Act did not result in completely new rules for tripartite concertation and mostly incorporated the previous operational guidelines into law.

General agreement for 2000

After a three-year break, the parties signed a new tripartite general agreement for 2000. The agreement covered four main policy areas - the economy, employment, incomes and social policy. The majority of commitments laid down in the agreement related to the government, which declared its willingness to consult with the social partners on all relevant measures in economic and social policy. The general agreement for 2000 is the most recent tripartite social pact signed in Slovakia - nevertheless, some of its goals are still relevant.

Economic policy

The agreement provided that, in terms of economic policy, the duties of the government were to improve the institutional and legal framework for the effective operation of private businesses. These duties involved: increasing company competitiveness; supporting and developing small and medium-sized enterprises; restructuring the banking sector and the state monopolies; attracting foreign investment; and reducing the taxation burden. Special attention was paid to regional development plans, including facilitating the access of social partners to relevant information on potential business development activities.

Employment policy

Employment policy was, and remains, a fundamental issue because of the high unemployment rate (in the past 20%, and currently close to 18% on average and 30% and above in some regions). According to the general agreement for 2000, the government, in cooperation with the employers, was to implement measures to decrease the unemployment rate by at least 3 percentage points by the end of 2000. The highest priority was given to regions with unemployment above 25%. In an attempt to combat unemployment effectively, the National Labour Office (Národný úrad práce, NUP) implemented special development programmes for young unemployed people. In order to reduce long-term unemployment, the government provided for special supplementary funding from the state budget for'publicly useful' jobs. Other employment measures included combating illegal work, more effective protection of working conditions and occupational health and safety, and better reflection of labour market demands by the educational system.

Incomes policy

Incomes policy was always a sensitive issue in tripartite general agreements and it remained an important topic in the 2000 accord. The government promised to adopt measures aimed at supporting a real wage increase in both the public sector and business sector. In this respect, the government agreed to adopt a new wage framework for the civil and public services, to develop the taxation system and not to apply wage restraint in the business sector. The government also promised not to introduce any proposals which would increase prices and the taxation burden, without prior consultations with the social partners. Trade union and employers' organisations at sector/branch level promised to negotiate wage increases which would, at least, prevent the negative impact of the inflation on real wages.

Social policy

In terms of social policy, the government promised to reform the social insurance system. In this respect it promised, from 2001, to ensure a more effective supplementary retirement insurance and healthcare insurance, based on individual personal accounts, as well as to ensure that child benefit would be paid in respect of all children, regardless of family net income.

Evaluation

In spring 2001, the parties evaluated the tasks agreed in the pact for 2000 and the trade unions made several critical comments. Some commitments were met, such as some reduction in the taxation burden, but others, such as increasing the real wages or reducing unemployment, were not. Therefore, the KOZ SR union confederation declared its dissatisfaction with the fulfilment of its tasks by the government and refused to negotiate a general agreement for 2001. No new tripartite general agreement has been signed since.

Other forms of tripartism

The National Labour Office, established by Act No. 387 of 1996 on Employment, is governed by tripartite bodies, including its supervisory board and the governing committees of regional and district labour offices. Members of these governing bodies are elected for four-year terms of office and represent employers, trade unions and the state. The supervisory board consists of nine members, representing equally employees, employers and the state. Its members are appointed and recalled by the National Council of the Slovak Republic (Národná rada Slovenskej republiky, NR SR), based on proposals submitted by the representative organisation of employees and employers and by the government. The board is quorate when at least three representatives of employees, three representatives of employers and three representatives of the state attend its meetings. The governing bodies elect from among their members a chair and two vice-chairs, with one each representing employees, employers and the state (usually the chair). The tripartite governing bodies approve the implementation of active labour market policy measures, including taking decisions on allocation of the necessary financial resources. However, the Ministry of Labour, Social Affairs and Family (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR) has recently prepared a new bill on employment services, which would significantly amend the current Act on Employment, including the abolition of the National Labour Office's tripartite management.

Tripartism has also been developed at regional level. Regional tripartism started to operate in Slovakia's new regional structures in 1998 when Regional Economic and Social Concertation Councils were established in four of the eight regions. To assist this process, an EU PHARE project supporting the development of regional tripartite social dialogue in Slovakia was implemented in four regions in 1998-9. The social partners involved evaluated the outcomes of this project very positively and it contributed to a good start for tripartite social dialogue in the selected regions. However, commentators are of the opinion that, since finishing the project, representatives of the state and, to some extent, of the employers have not engaged effectively in further development of the regional social dialogue. The activities of the regional RHSDs in the selected regions have been mostly formal and have not achieved the real involvement of the regional social partners in solving the actual problems of the regions.

The National Plan for Regional Development, adopted in 2001, strengthened the role of the social partners in regional development, providing for their participation in preparing regional development plans and projects. In late 2001, for the first time, regional governments were elected, and they took over responsibility for regional development in 2002. It is hoped that these developments will have a positive impact on both the preparation of regional development projects seeking support from EU funds, and the development of regional tripartism in Slovakia.

Commentary

After an optimistic restart in 1999, tripartism again ran into trouble during 2001 when the outcomes of the 2000 general agreement were evaluated. Several agreed measures were implemented but two socially sensitive goals - increasing real wages and reducing the high unemployment rate - were not achieved. Since then, several government commitments under the agreement have been successfully accomplished - average real wages increased in 2001 and 2002 (SK0207101N), real wages in the public sector increased in 2002, restructuring of the banking sector and some state monopolies is almost finished, and child benefits are provided for all children. At the same time, several employment policy measures have implemented and the unemployment rate has been reduced progressively and is currently less than 18%, which is the lowest rate since 1998.

Another example of recent tripartite negotiations related to the most recent minimum wage increase. The minimum wage increase in 2002 (from SKK 4,920 to SKK 5,570 per month) had to be decided by the government because the social partners could not come to a commonly accepted agreement (SK0210101N). In 2003, they are again unable to agree on a new minimum wage.

After the introduction of the new Act on Economic and Social Partnership in 1999, tripartite negotiations became more demanding due to their wider agenda, though tripartite agreements were not made legally binding on the signatories. Therefore, employers’ representatives are looking for a more selective approach to issues discussed at the RHSD and would prefer some reduction of the tripartite negotiation agenda.

Currently, national tripartite concertation is continuing regularly and several issues are discussed each month. The most important recent achievement is the approval of new labour legislation in 2001 - the new Labour Code (SK0207102F) and the new Acts on the Civil Service and Public Service (SK0206102F) - and an agreement on new amendments to the Labour Code in 2003 (SK0303101N) (though in the latter case some additional amendments more in favour of employers than of trade unions were adopted during parliamentary debate). However, disagreements between the trade unions and the government over the latter's proposed changes to social policy and labour legislation are at present marking tripartite negotiations in the RHSD. Trade union representatives have declared a'state of crisis' over the proposals and are not interested in negotiations over a general agreement for 2003. Representatives of employers and the government also do not seem particularly interested in starting such negotiations.

As a result of this situation, no general agreement has been concluded in the past three years. In response to current trade union demands and positions, radical views have recently been expressed in some quarters, calling into question the existence and operation of the unions and of tripartism at national level. (for example, an article entitled'Time to revoke tripartism' appeared in theSME daily newspaper on 14 June 2003). (Ludovit Cziria, RILSAF)

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