2003 Annual Review for Slovakia
This record reviews 2003's main developments in industrial relations in Slovakia.
The government elected in September 2002 - a coalition of the Slovak Democratic and Christian Union (Slovenská Demokratická a Krestanská Únia, SDKÚ), the Hungarian Coalition Party (Magyar Koalíció Pártja/Strana Madarskej Koalície, MKP/SMK), the Christian-Democratic Movement (Krestansko Demokratické Hnutie, KDH) and the New Civic Alliance (Aliancia Nového Obcana, ANO) - continued in office during 2003.
The government began the year by implementing a number of major reforms in the economic and social field. Many of these measures had negative effects on the population's standard of living and the government was repeatedly criticised by the political opposition and the trade unions. There were several unsuccessful attempts in parliament to oust ministers. Internal relations among the coalition parties also proved problematic, with some MPs leaving the SDKÚ and ANO parties and the Minister of Defence removed from office, along with leading representatives of some important state security institutions. The departure of some MPs from SDKÚ and ANO resulted in the governing coalition losing its narrow majority in parliament. In spite of these problems, the government coalition was able to have all its main reform legislation adopted, including laws on taxation, pensions and the 2004 state budget.
During the year, Slovakia signed its European Union accession Treaty and citizens voted in favour of EU membership in a referendum.
There was a gradual increase in trade union criticism of the government’s actions during 2003 and they organised a number of protest actions (see below under 'Industrial action'). To some extent, the unions entered the political arena and, at the end of the year, they organised a petition calling for a referendum on early parliamentary elections.
There were no significant changes in the area of collective bargaining during 2003. The sector remains the key level of bargaining, with around 40% of the workforce covered by agreements concluded at this level. In total, 53 sectoral collective agreements, including amendments to such agreements, were registered by the Ministry of Labour, Social Affairs and Family of the Slovak Republic (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR). This was down on the 62 agreements signed in 2002, but this kind of variation is normal and it is based on the differing duration of agreements. Highlights of the year included the conclusion of a new sectoral collective agreement for public service employees, covering 2004 (SK0401109N).
The focus of collective bargaining in 2003 was pay - sectoral collective agreements provided for an average nominal wage increase of between 7% and 8%. According to preliminary data from the Statistical Office of the Slovak Republic ( Statistický úrad Slovenskej republiky , SÚ SR) for the third quarter of 2003, in comparison with the same period in 2002 the average monthly wage increased by 7% to SKK 14,066. However, as a consequence of inflation, real wages decreased by 1.9%. The highest wages were in financial and insurance services, public administration and defence, and the lowest in social services, education and agriculture.
From 1 October 2003, the minimum wage was increased by 9.2% from SKK 5,570 to SKK 6,080 a month ( SK0312101N ) - a fact that influenced wage negotiations for 2004. The government unilaterally introduced this increase because the social partners were unable to reach agreement through tripartite concertation.
Average collectively agreed weekly working time stood at 38.48 hours in 2003 for workers in single-shift operations, a decrease on the 2002 figure of 38.98 hours. The average weekly working time of employees working part time fell from 23.3 hours to 21.9 hours.
The 2003 and 2004 collective agreements for public services provide that, in individual organisations within the sector, it may be agreed to reduce working time from the norm of 40 hours to 37.5 a week. In two-shift operations, weekly hours may be reduced to 36.25, while in three-shift or continuous operations working time cannot exceed 35 hours.
The incidence of flexible forms of working time, as provided for by collective agreements, was virtually the same in 2003 as in the previous year. The flexible organisation of working time applies to 30% of employees.
There were a number of instances of restructuring and collective redundancies over the course of 2003, though there is no information on the extent to which job security was an issue in collective bargaining. For example, at Slovak Television ( Slovenská televízia , STV), to deal with long-term financial problems, production of TV programmes was cut and over 1,100 employees (60% of the workforce) were made redundant despite trade union opposition ( SK0308101N ).
Equal opportunities and diversity issues
In general, no specific attention was paid to equal opportunities and diversity issues by the negotiators of collective agreements in 2003. Data from the Statistical Office of the Slovak Republic indicate that pay inequality is increasing ( SK0401106F ). While in 1996 women's gross average monthly pay was 74.5% of that of men, by 2002 this had fallen below 72%. Wage differentials are greater at higher income levels, while a larger proportion of women than men are clustered in the lower wage brackets. Recently, efforts by the government to address this problem have been stepped up. While the social partners still give relatively little attention to equal pay, trade unions have begun to take an interest, stimulated by a commission for equal opportunities for men and women established by the Trade Union Confederation of the Slovak Republic ( Konfederácia odborových zvazov Slovenskej republiky , KOZ SR ). The commission held its first meeting in June 2003 and in October it organised a meeting of representatives of KOZ SR, the Federation of Employers´ Associations of the Slovak Republic ( Asociácia zamestnávatelských zvazov a zdruzení Slovenskej republiky , AZZZ SR ), the Ministry of Labour, Social Affairs and the Family, and the National Labour Inspectorate ( Národný inspektorát práce , NIP ). One of the topics discussed was gender wage inequality and ways of addressing it.
Training and skills development
There is no information on the extent to which training and skills development was an issue in collective bargaining in 2003. In June 2003, the government approved a report examining the extent to which the goals and priorities set out in a joint assessment of employment priorities agreed with the European Commission were met in 2002 ( SK0311101N ). According to the report, there were positive developments in active labour market policy in 2002. Twice as much was spent on retraining measures in comparison with 2001, and more than one-third of those undergoing retraining found a job.
In July, significant and extensive amendments were made to the Labour Code (SK0312103F), little more than a year after it came into force in April 2002 (SK0207102F). The changes, which resulted from employers' complaints about some of the Code's provisions (SK0303101N) - notably the rights given to trade unions at company level - aim to to achieve a higher level of flexibility in employment relations by reducing the number of regulations and creating better conditions for autonomous collective bargaining. The areas affected include works council and trade union rights (see below under 'Employee participation'), termination of employment (SK0401111F), overtime, paid leave, working time, discrimination and harassment, and fixed-term contracts (see below under 'New forms of work').
More stringent conditions on the registration of unemployed people entered into effect on 1 January 2003. Various items of legislation were adopted in 2003 and will come into force in 2004, including:
- amendments to the sickness insurance system (SK0401102N). The main change is that employers will take over responsibility for sick pay during the first 10 days of an employee's sickness absence;
- a reform of the state pension system (SK0401101N). The changes affect areas such as contributions, pension calculation and the retirement age, which will be increased;
- new employment conditions affecting both the civil and the public services (SK0405102F). Many privileges will be abolished, while employee responsibility and obligations will be increased and the wage system changed;
- a new taxation system. Employees' incomes and employers´ profits will be taxed at a flat rate of 19%.
The organisation and role of the social partners
There were no significant changes to the organisational structure and role of the social partners (SK0208102F) during 2003. The main trade union centre remained the Confederation of Trade Unions of the Slovak Republic (KOZ SR), with 34 affiliated sectoral trade unions. The Federation of Employers' Associations of the Slovak Republic (AZZZ SR), which has 34 affiliated employers' organisations, remained the main social partner on the employers' side.
In 2003, as usual, there were no strikes held over the conclusion of collective agreements or the fulfilment of commitments under such agreements. However, there were signs of increasing conflict between trade unions, employers and/or the government. Indeed 2003 saw the first genuine strikes in the history of the independent Slovak Republic when railway workers' trade unions organised two strikes in January and February (SK0306101F). These resulted from disputes between the unions and the management of the railway companies and the Ministry of Transport, Post and Telecommunications over plans to close 25 regional lines and reduce services on main lines. The first strike took place on 29 January, from 03.00 to 09.00, halting all passenger and freight trains. More than 70% of rail employees (approximately 30,000) participated in the strike. As the unions did not achieve their demands, they decided to continue their action and an indefinite strike started at 23.00 on 31 January. The participation rate among railway workers was similar to that for the first strike. On 3 February, three days after the beginning of the strike, the District Court in Bratislava - which had been asked by the employers to rule on the legality of the strike - ordered workers to stop their action until a ruling was made on the strike's legality. The trade unions observed the court order and ended the strike. Seven months later, a higher court issued its decision in the case, finding that the strike was not illegal and overruling the Bratislava court's preliminary decision.
During 2003, the KOZ SR union confederation called on the government to postpone or repeal a number of planned economic and social policy reforms . As the government did not accept all of the trade unions’ demands, KOZ SR organised a nationwide one-hour warning strike from 08.00 to 09.00 on 26 September (SK0312102N). The action received most support among workers in education institutions, healthcare, construction, mining, metalworking and the energy sector - for example, some 70,000 trade unionists in 260 industrial companies stopped working for one hour. Some commentators stated that the strike did not have the expected impact, though the KOZ SR leadership assessed the strike as very successful, fulfilling and even exceeding their expectations.
Some protest actions were also organised by employers in 2003. An example was a conflict between pharmacists and a healthcare insurance company, resulting in pharmacists temporarily closing their shops due to significant delays in financial reimbursements from the insurance company.
The amendments to the Labour Code that came into effect on 1 July 2003 (see above under 'Legislative developments') included changes in the area of employee participation (SK0308102F). Before the new Labour Code first came into force in 2002, the law had granted information, consultation, inspection and collective bargaining rights only to trade union organisations. The 2002 Code introduced employee representation through an elected works council (which may be set up at organisations with at least 50 employees) or 'works trustee' (who may be elected in organisations with more than five but fewer than 50 employees) with negotiation, information and inspection rights, but only in organisations with no trade union presence. The July 2003 amendment to the Code extended works councils and works trustees to organisations where a trade union is present. The change is seen as weakening the trade unions' position in the company in favour of other employee representatives.
In 2003, the Ministry of Justice of the Slovak Republic, in cooperation with the Ministry of Labour, Social Affairs and Family, was working on amendments to national legislation in order to transpose the employee involvement Directive (2001/86/EC) linked to the European Company Statute (EU0206202F). No information is available on any moves to implement the EU information and consultation Directive (2002/14/EC) (EU0204207F). The European Works Councils (EWCs) Directive (94/45/EC) was implemented in 2002 by the new Labour Code, and these provisions will come into force when Slovakia joins the EU in May 2004. Some multinationals with operations in Slovakia have established EWCs and in some cases representatives of Slovak employees, usually trade union representatives, attend EWC meetings.
Stress at work
A range of activities related to stress at work were organised during the course of 2003, aimed at increasing public awareness. For example, the Research and Training Institute on Health and Safety at Work (Výskumný a vzdelávací ústav bezpecnosti práce, VVUBP) disseminated a publication entitled 'training programme on stress at work'. This contained basic information on stress at work, a description of selected stress factors and options for their elimination. It is aimed primarily at company health and safety delegates. In addition, relevant research findings were published by VVUBP and incorporated into guidelines on health and safety management in companies.
There were no specific legislative initiatives in this area in 2003, with the topic of stress at work having been included in health and safety legislation in 2001. Stress at work was also the subject of activity by the National Labour Inspectorate, which increased its resources dedicated to the issue.
Particular attention was paid to the issue of undeclared work during 2003 by the government, and especially the Ministry of Labour, Social Affairs and Family in cooperation with the National Labour Inspectorate (NIP), taxation offices and other organisations. Several measures were taken, including a change to the Act on employment from 1 January 2003: in the framework of a general tightening of the conditions for registering as unemployed and obtaining unemployment benefit, unemployed people are now obliged to prove to the labour office that they are looking for a job every two weeks instead of once a month, as was previously the case. The powers of labour inspectors to enter workplaces have recently been strengthened. The NIP continued to monitor undeclared work at workplaces during 2003, finding a relatively small number of cases.
The total number of people involved in undeclared work is not known. According to different estimates, numbers could vary between 70,000 and 140,000. Undeclared work is most common in construction, retail and transport.
New forms of work
According to the labour force sample survey for the second quarter of 2003, 48,600 employees worked on a part-time basis in their main job, which is less than 2.5 % of the total number of employees. It is mainly women that work on a part-time basis - 3.7% of all employed women work part time in their main job. A total of 105,100 employees were engaged in temporary work, seasonal work and casual work. This was less than 5% of all employees, virtually the same figure as in 2002. Women made up around 45% of all employees employed on a temporary, seasonal and casual basis. Some 2.7% of employees were engaged in regular home work. Specific data regarding temporary agency work and teleworking are not available.
With the aim of increasing employment flexibility, the amendments to the Labour Code that came into effect on 1 July 2003 (see above under 'Legislative developments') permit fixed-term employment contracts up to a maximum of three years. In special cases, these can be prolonged or renewed. The permissible grounds on which fixed-term employment contracts may be prolonged or renewed for a maximum of three years have been broadened. Furthermore, the possibilities for prolongation or renewal of fixed-term employment without giving a reason have also been increased, because their earlier restriction was seen as causing problems. Furthermore, the employer is now obliged to inform employees on fixed-term employment contracts, along with employees' representatives, about open-ended job vacancies. Moreover, working at home was specifically permitted by new legislation in 2003.
The accession of Slovakia to the European Union on 1 May will be the main event of 2004. It will allow Slovak workers to look for employment in other EU Member States, though most of the 'old' 15 Member States have imposed transitional restrictions on free movement from the new central and eastern European members, and it is expected that a limited number of Slovak people will use the new opportunities during 2004.
In terms of economic development, GDP is expected to rise by around 4% in 2004, similar to the increase in 2003. The introduction of a single 19% rate of VAT, as well as an increase in energy costs, is expected to lead to consumer price increases and inflation at a similar level as the increase in nominal wages. This means that real wages are not likely to increase in 2004. It is also expected that disagreements and protest actions staged by trade unions will continue.
The current trend towards increasing foreign direct investment is likely to continue during 2004, as a consequence of greater flexibility of labour legislation and new taxation rules. It is hoped that this will contribute to cutting unemployment, which remains high. Changes in the system of employment services institutions will take place in 2004 when joint offices for social and employment services take over the operations of the National Labour Office. Finally new legislation on pensions, sickness insurance and public employment will come into force. (Ludovít Cziria, Bratislava Centre for Work and Family Studies)