2004 Annual Review for Slovakia

This record reviews the main industrial relations developments in Slovakia during 2004.

Political developments

The government elected in September 2002 - a coalition of the Slovak Democratic and Christian Union (Slovenská Demokratická a Kresťanská Únia, SDKÚ), the Hungarian Coalition Party (Magyar Koalíció Pártja/Strana Maďarskej Koalície, MKP/SMK), the Christian-Democratic Movement (Kresťansko Demokratické Hnutie, KDH) and the New Civic Alliance (Aliancia Nového Občana, ANO) - continued in office during 2004, but lost its overall majority in parliament. Nevertheless, it was able to push through the remainder of its pension reform and a full reform of the healthcare system in 2004. The government also succeeded in gaining parliamentary approval for the 2005 state budget. Despite political disputes and some instability in the coalition parties, the composition of the government remained unchanged throughout the year. Trade unions displayed their dissatisfaction with the reforms implemented by the government in the economic and social sphere (SK0406101N), (SK0406102N) and initiated a referendum to recall the current government. The referendum took place in April, although it was not valid because the participation rate of citizens eligible to vote was too low. The participation rate was around 35%, whereas to be valid, a referendum requires a participation rate of more than 50%.

The Slovak Republic became an EU Member State on 1 May 2004, elections to the European Parliament took place for the first time in June and the country became a member of the North Atlantic Treaty Organisation (NATO).

In April, the election of the President of the Slovak Republic took place, resulting in victory for Ivan Gašparovič, who assumed his role in July.

Collective bargaining

There were no significant changes to the collective bargaining system during 2004. Sectoral negotiations continued to play an important role in bargaining. According to the Trexima (Trexima Bratislava spol sro) sample survey for 2004, about 37% of organisations are covered by collective agreements concluded at sectoral level. According to the same source, 842 company-level collective agreements were concluded for 2004.

In total, 46 sectoral collective agreements, including supplements to the 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).

Since January 2004, collective bargaining in the civil service has been permitted at both sectoral and local levels. The opportunity to bargain collectively at the local level in civil service organisations stems from the amended Act No. 551/2003 on the Civil Service, which also amended the Act on Collective Bargaining (SK0412102S). However, the scope of local-level bargaining in civil service organisations is specified by sectoral collective agreement and is relatively very narrow.

Pay

The focus of collective bargaining in 2004 was, as usual, on pay. Sectoral collective agreements provided for an average nominal wage increase of 7%. The highest sectoral wage increases were agreed by the trade unions in communication (OZ SPOJE) (13%) and in metalworking (Metalurg) (9%). The lowest wage increase (3%) was agreed by the trade union representing employees of the Slovak Academy of Science (OZ pracovníkov Slovenskej akadémie vied).

The national minimum wage of SKK 6,080 a month was the basis for 2004 wage bargaining. According to the available information, in about 80% of sectoral collective agreements a higher monthly minimum wage was agreed. As of 1 October 2004, the minimum wage was increased by 6.2%, to SKK 6,500 a month (SK0411101N) - a fact that influenced wage negotiations for 2005. The government had to introduce this increase unilaterally because the social partners were once more unable to reach agreement through tripartite concertation. According to preliminary data from the Statistical Office of the Slovak Republic (Štatistický úrad Slovenskej republiky, ŠÚ SR) for the third quarter of 2004, in comparison with the same period in 2003, the average nominal monthly wage increased by 8.8%, to SKK 15,299. At the same time, real wages increased by 1.2%.

Working time

According to the Trexima 2004 survey results, average collectively- greed weekly working time stood at 38.73 hours in 2004 for workers in single-shift operations, an increase on the 2003 figure of 38.48 hours. The 2004 sectoral collective agreements brought no changes in weekly working hours, neither in public service organisations (SK0401109N) nor in civil service organisations (SK0405101N), compared with 2003.

Job security

Collective agreements usually include consultation provisions in situations involving the collective dismissal of employees caused by organisational changes. They provide that these consultations must be held with the employees’ representatives, mostly trade unions. Nevertheless, these provisions are of a very general nature (they do not relate to concrete cases of organisational change) and usually copy the employers´ obligations regarding dismissals that are stipulated in the Labour Code (SK0409102T). 2003 amendments to the Labour Code implemented more flexible terms and conditions of employment and decreased the previous level of employee job security.

Equal opportunities and diversity issues

Equal opportunity issues have been included in collective agreements in a rather narrow way, mostly concerning the working conditions of pregnant women and employees taking care of young children. The Confederation of Trade Unions of the Slovak Republic (Konfederácia odborových zväzov Slovenskej republiky, KOZ SR) has prepared and implemented a project on 'equal opportunities policy for women and men in trade unions'. The goal of this is to enforce the gender equality principle in the activities of the trade unions and at all levels of the collective bargaining process (SK0407103F).

Training and skills development

Framework provisions on training and skills development are usually included in collective agreements. However, the provisions in this field are of a general nature and mostly copy the relevant regulations of the Labour Code. Collective agreements usually stipulate the conditions for employees’ participation in vocational education and training, including providing the employees with time off during their participation in training and skill development courses (SK0406103S).

Legislative developments

According to the most recent amendment to the Act on Collective Bargaining, the consent of the employer affected by the extension of a collective agreement has been a necessary precondition for a decision to extend an agreement, as of 1 December 2004. Previous legislation did not require the opinion of the relevant employer to be considered in decisions on extending collective agreements.

Act No. 453/2003 on State Administration Bodies in the Area of Social Affairs, Family and Employment Services has created a legal framework for the establishment of new institutions in the area of the labour market and social affairs since 1 January 2004. Further, Act No. 5/2004 on Employment Services and on Changes and Supplement of Some Laws has implemented new employment services as of 1 February 2004 (SK0411103F).

Other legislation adopted or coming into force in 2004 is detailed in other sections of this article.

The organisation and role of the social partners

The Federation of Employers’ Associations of the Slovak Republic (Asociácia zamestnávateľských zväzov a združení Slovenskej republiky, AZZZ SR), the only peak-level employer representative body, split during 2004, resulting in the formation of a new peak employers’ organisation - the National Union of Employers of the Slovak Republic (Republiková únia zamestnávateľov Slovenskej republiky, RUZ SR) in late March 2004 (SK0408102F). Approximately half of the members of the original AZZZ SR moved over to the RUZ SR. The foundation of the RUZ SR introduced a new feature into industrial relations in Slovakia - the employers now have plural peak-level representation after a decade of unitary representation. The split in the AZZZ SR and the foundation of the RUZ SR has presented a challenge for the representation of employers in national tripartite concertation and in international employers’ organisations.

Industrial action

No significant strikes or lock-outs took place during 2004. However, some local protests, including short-term interruptions of work, were organised in few companies by local trade unions. These actions were caused mostly by wage problems and lack of financial resources (SK0410101N). A national warning strike staged by workers in regional bus transport (Slovenská autobusová doprava, SAD), which took place on 15 November, was the most prominent example of industrial action during the year.

Employee participation

The EU Directive on national information and consultation rules (EU0204207F) was implemented in the new Labour Code, which now also permits the establishment of works councils in companies where trade union organisations are present. According to the Trexima 2004 sample survey, works councils are already present in 219 companies in Slovakia.

As of 1 May 2004, the Labour Code has regulated the implementation of European Works Councils (EWCs). Slovakian employee representatives in between 140 and 150 multinational companies operational in Slovakia are eligible to participate in EWCs (SK0409101F).

The European Company Statute (EU0206202F) was implemented in Slovakia through Act No. 562/2004 on the European Company and Changes and Amendments to Some Acts, which entered into force on 1 November 2004. No information is available yet on how many companies intend to use the European Company Statute to incorporate as a European Company.

Absence from work

Labour Code provisions define unauthorised absence from work as a reason for termination of the employment contract. Absence from work is not particularly widespread, however, and therefore not usually a priority issue in collective bargaining. Nevertheless, in order to reduce absence from work due to sickness, the MPSVR SR has initiated some changes in the social insurance system (SK0401102N). Since 1 January 2004, employers have taken over responsibility for sick pay during the first 10 days of sickness absence. 

Psychological harassment

The Labour Code contains rules to protect employees against any form of discrimination at work. According to Act No. 365/2004 on Equal Treatment in Some Areas, and on the Protection Against Discrimination, and on the Amendments to Some Acts (the 'anti-discrimination' Act), since 1 July 2004 psychological harassment, also known as bullying, mobbing or moral harassment, has been treated as a form of discrimination at work and therefore prohibited. In general, employers and trade unions support the implementation of the anti-discrimination legislation. In practice, however, these issues were not explicitly included in collective agreements concluded for 2004.

New forms of work

According to the Trexima 2004 sample survey results, the proportion of employees working part-time increased from 2.8% in 2003 to 4.3% in 2004. A flexible organisation of working time applies to about 34% of organisations. The incidence of flexible working time, as provided for by collective agreements, increased by about 1 percentage point in comparison with 2003. Concrete provisions related to the flexible organisation of working time are relatively rarely included in collective agreements. Where they exist, such provisions are of general nature and relate mostly to daily or weekly flexible working time.

The Labour Code regulates teleworking and on-call work. Telework is treated as homeworking; it is not particularly widespread and is usually not dealt with in collective agreements. On-call work is mostly concentrated in particular occupations and professions and is regulated by collective agreements.

Act No.5/2004 on Employment Services and on Changes and Supplement of Some Laws has regulated temporary agency work since 1 February 2004. Any organisation that wants to act as a temporary employment agency must have a licence from the Centre of Labour, Social Affairs and Family (Ústredie práce, sociálnych vecí a rodiny Slovenskej republiky, ÚPSVR SR). The licence is provided for a fee and is valid for a maximum of five years. About 45 temporary employment agencies are currently operating in the Slovak Republic. The conditions of use of agency workers are also regulated by other labour legislation, such as the Labour Code and the Act on Occupational Health and Safety, which practically ensures the same employment conditions for agency workers as for employees of user companies. Employers are interested in employing agency workers. However, trade unions criticise the use of agency workers due to the fact that these workers often suffer unequal employment terms and conditions.

Outlook

Two issues are likely to dominate industrial relations and social policy in Slovakia in 2005. The first is the issue of undeclared work. In 2001, undeclared work estimated to involve about 140,000 persons, more than 5% of the workforce (SK0406105T) It is expected that new legislation aimed at combating undeclared work will be issued at some point during 2005.

The second is unemployment. High levels of unemployment are a continuing problem. Despite a number of positive employment trends, the country still has a high unemployment rate, including long-term unemployment and youth unemployment. Over the course of 2003 and 2004 a set of new active labour market policy measures - including preventive action and efforts to enhance employability - was introduced to help tackle the problem, while public employment services were reformed (SK0411103F). Further measures are expected during 2005, including a focus on the effective implementation of the Slovak National Action Plan (NAP) for employment (within the framework of the EU employment strategy) and the implementation of new active labour market policy measures. Further, new foreign direct investments will be encouraged, creating new jobs mostly in the automotive industry. (Ludovit Czíria, Bratislava Centre for Work and Family Studies)

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