New central employers' organisation established

2004 has seen a split in the Federation of Employers' Associations of the Slovak Republic (AZZZ SR), formerly the country's only central employers' organisation. Dissatisfied members have established a new organisation, the National Union of Employers of the Slovak Republic (RUZ SR), with the aim of better defending employers' interests, which by August had grown to around the same size as AZZZ SR . The split has raised problems concerning employers' representation in tripartite bodies and in international organisations.

The Federation of Employers' Associations of the Slovak Republic (Asociácia zamestnávatelských zväzov a združení Slovenskej republiky, AZZZ SR) was established in 1991 and from 1995 operated as the sole top-level employers' representative body (SK0208102F). It also represented the employers in tripartite bodies (SK0307102F). However, at the end of March 2004 the organisation split: employers that were not satisfied with how AZZZ SR was being run established a new organisation, the National Union of Employers of the Slovak Republic (Republiková únia zamestnávateľov Slovenskej republiky, RUZ SR).

Internal tensions seem to have been present in AZZZ SR for a long time. However, it appears that these problems were not addressed by either an AZZZ SR meeting in October 2003 or the management. The president of the new employers' organisation, and vice-president of theUS Steel plant in Košice, Anton Jura (a former member of the AZZZ SR presidium) justified the founding of RUZ SR as follows: 'It was no longer possible to reform the federation internally. AZZZ did not function properly and pursued contradictory goals' (quoted in the SME newspaper on 31 March 2004. A founder and chief executive of AZZZ SR, František Bruckmayer, commented on the creation of RUZ SR: 'If people do not get what they want within a democratic framework, they found a new organisation. All I can do is to wish them bon voyage. In my view, personal and political ambitions are behind it so far' (quoted in SME on 31 March 2004). The management of RUZ SR has declared that it wishes to improve the defence and advocacy of employers' interests.

RUZ SR membership

Approximately half the members of the original AZZZ SR were reportedly due to go over to the new organisation immediately; however, a number of problems arose concerning membership of RUZ SR. AZZZ SR had no intention of surrendering its position easily: Its president, Michal Ľach, said that he considered current AZZZ SR members to be committed until the end of 2004, and that 'the situation will be different after 1 January 2005' (quoted in TREND on 8 April 2004). This problem was not resolved for three months. A new presidium was elected at the AZZZ SR general assembly and there were some management changes. Amendments were also adopted to the AZZZ SR statutes, making it possible for those interested in becoming members of the new employers' organisation to leave the association without having to wait until the end of 2004. This speeded up the establishment of the new body.

According to RUZ SR, 19 employers' associations and seven individual member firms from the private sector founded the new top-level employer representative organisation, employing around 270,000 people. These include many large and strong employers' associations, such as: the Association of Employers in Transport, Posts and Telecommunications (Zväz zamestnávateľov dopravy, pôšt a telekomunikácií) with almost 78,000 employees; the Slovak Council of Industrial Associations (Združenie priemyselných zväzov Slovenskej republiky) with almost 58,000 employees; and the Association of Metallurgy, Mining Industry and Geology of the Slovak Republic (Zväz hutníctva, ťažobného priemyslu a geológie Slovenskej republiky) with approximately 30,000 employees. RUZ SR now represents employers employing almost 25% of private sector workers.

Employer representation

The establishment of the new top-level employers' organisation has affected employers' representation in terms of tripartite concertation. Employers have been unhappy about the functioning of tripartism in recent years (SK0307102F), especially what they regard as the inflated agenda and the sheer number of issues which (according to the legislation on economic and social partnership) have to be negotiated in the tripartite Economic and Social Concertation Council (Rada hospodárskej a sociálnej dohody, RHSD). Ivan Mikloš, the Deputy Prime Minister and Minister of Finance, admits that the functioning of tripartism is not optimal, discussing far too many issues which are beyond its scope. The new National Union of Employers wishes to be represented the RHSD alongside AZZZ SR. The government is trying to be impartial and its representatives have participated in meetings with both organisations. However, after a large number of AZZZ SR members went over to RUZ SR, the issue of representativeness has arisen. Pavol Rusko, the Minister of the Economy and chair of the RHSD, considers this to be a legitimate question that is an internal matter for the employers. In his view, tripartism needs strong employers' representation and it would be beneficial if the employers were united.

Recently, both central employers' organisations have provided documentation concerning their membership since the split. The data will be used to evaluate their representativeness with a view to determining participation in tripartite forums. However, this problem is not the only one currently affecting the operation of tripartism. Tripartite concertation has, in the view of commentators, not been functioning properly since June 2004, when the government decided to change the RHSD's operating procedures. 'The government is not interested in and does not have the political will to continue the tripartite social dialogue in [the current] way', said Minister Rusko (quoted in SME on 17 May 2004). The government is working on a draft bill to amend Act 106 of 1999 on economic and social partnership. Some initial comments indicated that it was even considering abolishing this law. According to government representatives, its position has also been influenced by the more open recent political involvement of the trade unions represented in the RHSD, illustrated by an initiative to hold a referendum on early parliamentary elections (SK0401105F) and union support for criticisms of government reforms made by the political opposition.

The representativeness of RUZ SR and AZZZ SR is also important with regard to membership of international employers' organisations, such as the International Organisation of Employers (IOE) and the Union of Industrial and Employers' Confederations of Europe (UNICE). AZZZ SR seems to want to retain its membership of these organisations. However, RUZ SR also wants to be represented there. As matters stand, no decision has yet been taken on this issue, though some commentators suggest that RUZ SR membership of UNICE appears likely to be granted, as all its members represent private entrepreneurs.

Current activities

RUZ SR states that it wants to cooperate with state bodies and regional governments, representative trade union organisations, the media, other organisations representing entrepreneurs and employers both in Slovakia and abroad, and commercial and industrial chambers. RUZ SR has been developing its activities intensively since its formation: for example, it has developed a proposal to establish a forum for national bipartite social dialogue in which the social partners would discuss topical issues. RUZ SR has already consulted representatives of the Confederation of Trade Unions of the Slovak Republic (Konfederácia odborových zväzov Slovenskej republiky, KOZ SR). RUZ SR has also developed statements and proposals on planned amendments of the Act on collective bargaining and the abovementioned Act on economic and social partnership. It is also playing an active role in preparing a new mechanism for determining the minimum wage.

Commentary

The establishment of RUZ SR as a national-level employers' representative organisation has introduced a new element into Slovak industrial relations, bringing about pluralist top-level representation after a decade of a single peak organisation. According to some employers’ representatives, the new organisation's split from AZZZ SR was the result of a long drawn out process. According to a representative of RUZ SR, it is important for the new organisation to remain non-political in relation to the government and to focus on employers' direct interests. In this way it can avoid internal problems arising as a result of governmental change.

The employers' associations that have gone over to RUZ SR are primarily the powerful and influential ones, and their departure is likely to affect AZZZ SR financially. At present, RUZ SR represents only private sector employers, whereas AZZZ SR also includes employers from both the public and the cooperative sectors. This may play an important role in RUZ SR's application for membership of UNICE and subsequently may also influence AZZZ SR's participation in this organisation.

The emergence of pluralism in top-level employers' representation has also given rise to a new situation as regards relations with the trade unions. In addition to the employers' associations that have gone over from AZZZ SR to RUZ SR intact, other employers' associations in particular branches have split. Some companies in the chemicals industry have remained in AZZZ SR, whereas others have gone over to RUZ SR. Furthermore, unlike AZZR SR the new organisation also has individual - ie single enterprise - members. The existence of two top-level employers' organisations has also changed the position of employers' representatives as national-level social partners. The two organisations are similar in size (about half the AZZZ SR membership left to join RUZ SR). It remains to be seen how much power they will have in negotiations with the KOZ SR trade union confederation and the government within tripartite concertation. At present, relations between the two organisations seem to have stabilised after initial AZZZ SR hostility. (Ludovít Cziria, Bratislava Centre for Work and Family Studies)

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