Thematic feature - collective agreements on changes in work organisation
This article gives a brief overview of collective bargaining on changes in work organisation in Slovakia, as of September 2004. It looks at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands, flexibility and security in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future.
The EU’s European employment strategy was revised in 2003 (EU0308205F), following demands for a more results-oriented strategy contributing successfully to the targets for more and better jobs and an inclusive labour market set at the Lisbon European Council in 2000 (EU0004241F). To support the three objectives of full employment, quality and productivity at work and cohesion and an inclusive labour market, the current employment guidelines identify 10 priorities ('commandments'), including one on 'promoting adaptability of workers and firms to change'. This identifies work organisation (alongside skills, lifelong learning and career development, gender equality, health and safety at work, flexibility and security, inclusion and access to the labour market, work-life balance, social dialogue and worker involvement, diversity and non-discrimination, and overall work performance) as an element in improved quality at work, which should be pursued through a concerted effort between all actors and particularly through social dialogue.
The 2004 Council Recommendation on the implementation of Member States’ employment policies provides for four priorities:
- increasing adaptability of workers and enterprises;
- attracting more people to enter and remain on the labour market, making work a real option for all;
- investing more and more effectively in human capital and lifelong learning; and
- ensuring effective implementation of reforms through better governance.
The Recommendation refers to promoting flexibility combined with security in the labour market, by modernising and broadening the concept of job security, maximising job creation and raising productivity. As defined in the employment guidelines, 'job security' refers not only to employment protection but also to building people’s ability to remain and progress in work. Changes in work organisation thus appear to be seen as a main vehicle for increasing the adaptability of workers and enterprises. Related to this issue is flexibility and security in the labour market and the relative attractiveness of 'standard' and 'non-standard' employment relationships (with the aim of avoiding a 'two-tier' labour market).
With work organisation playing an increasingly important role in European employment policy, in September 2004 the EIRO national centres were asked, in response to a questionnaire, to give a brief overview of the industrial relations aspects of the topic, looking at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands and flexibility and security at the workplace in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future. The Slovak responses are set out below (along with the questions asked).
Recent agreements on changes in work organisation
Please provide information on recent developments (over the last three-five years) in collective agreements on work organisation that introduce changes in flexibility, security and productivity in an integrated way. The kind of issues that such agreements might cover include: introducing autonomous (or semi-autonomous work) teams; reducing the number of hierarchical layers; new forms of employee involvement; reorganising work functions; moving away from product-based structures to business unit; flexible working hours; multiskilling; job rotation; improving training (eg making it more systematic, ensuring wider participation, or changing the focus); new pay systems (eg performance-based pay, profit-sharing, share ownership schemes), and new financial and non-financial performance measures; or new appraisal systems.
The kind of agreements that we are interested in here are those that deal with a number of the issues listed above as an overall 'package'. Please provide any overall information available on this kind of development, if possible, and brief details of three or four agreements (at company and/or sectoral level) that you consider particularly innovative and interesting. Below is an indicative list of the kind of information we are seeking.
What are the main aims of bargaining on work organisation - eg increasing productivity? Increasing personnel flexibility? Improving the company’s position in the market? Avoiding redundancies and lay-offs?
Usually, changes in work organisation that influence flexibility and security in employment are not themes in collective bargaining. Collective agreements concluded at company level do not usually contain concrete provisions regarding work organisation issues. According to the Labour Code, it is possible to deal with concrete aspects of work organisation in collective agreements. Nevertheless, this opportunity is used only partially and agreed provisions on work organisation are traditionally aimed at increasing the flexibility of employment conditions, often in relation to flexible working time. Collective agreements also include provisions on consultations with employees’ representatives, mostly trade unions, over collective redundancies caused by organisational changes. The issue of productivity is not explicitly a theme to be discussed within collective bargaining. However, it can be included in collective agreements indirectly, ie in the part of the agreement that deals with wage increases. During the collective bargaining process, many employers seek primarily to achieve agreements that provide for improvement of the company’s position and its competitiveness on the market.
What is the extent of bargaining on work organisation - how many agreements are there? How many companies/employees are covered?
At present, according to the available information, collective agreements regulate pay and employment conditions for 25%- 30% of all employees, mainly in the public sector. In general, company collective agreements do not contain specific provisions that deal with changes in work organisation. There are no overall statistics available that allow the scope of collective agreements' provisions that may relate to work organisation issues to be gauged. However, according to some surveys collective agreements include provisions only on certain aspects of work organisation. The majority of such cases deal with the length of working time and wage increases. The issue of flexible working time is seldom negotiated, and such provisions depend on the technology and nature of work in sectors - eg flexible working time is more often agreed in the field of administration than in production processes. In industry, flexible working time is usually used in mechanical engineering, chemistry and construction.
What are the main areas in which changes are being introduced - eg new organisational structures, new more flexible and less hierarchical methods, new corporate cultures, new business practices, more training, new performance measurement techniques, new reward systems?
A quick survey of collective agreements in mechanical engineering, chemistry, construction, railways and the civil and public services confirms that the issue of work organisation is rarely included in these agreements. When some relevant provisions are included, they are usually traditional rather than innovative. The few collective agreements that contain provisions on work organisation issues include company agreements concluded in the construction sector (eg at Holcim Rohožník and Pozemné stavby Bardejov) chemicals (eg at Slovnaft MOL Bratislava and Duslo Šala) and mechanical engineering companies (eg at Volkswagen Bratislava and SIPOX Tatra Bánovce and Bebravou).
Elements of modern work organisation specified in the question above can be identified in the company agreements examined as follows.
- Collective agreements usually contain provisions on remuneration based on work performance, payment of special bonuses and payment of '13th' and '14th' months' wages to employees depending on the company's finances. In some companies, minimum and maximum limits are set up for wage rates and fixed rates are no longer used.
- Collective agreements usually contain provisions on consultations with employee representatives over the dismissal of employees (mainly mass redundancies) on the grounds of organisational change. Nevertheless, these provisions are of very general nature (they do not relate to specific organisational changes) and usually copy the employers´ obligations stipulated in the Labour Code.
- Collective agreements often contain provisions aimed at retaining employees in the company in the longer term. A very frequent motivation mechanism is an employer's contribution to the employees' complementary pension insurance. Payment of various bonuses is also used as a motivation tool for the employees, with the level usually depending on the employee’s length of service in the company. Also used are special financial contributions to paid leave, for Christmas holidays, to find housing and in the event of unemployment.
- Provisions related to flexible working time are relatively rare in the collective agreements. Such provisions are of general nature and relate only to particular groups of employees. The concrete application of flexible working time is individually negotiated with the employee outside of the scope of collective agreements. This relates to flexible working time on a daily or weekly basis. Support for the improvement of vocational education and training is also seldom included in collective agreements. Again, provisions in this field are of general nature and mostly copy the relevant regulations of the Labour Code. Collective agreements usually stipulate the conditions for employees to receive authorisation to take part in vocational education and training. According to trade unions, an exception to the general rule and a good example of dealing with this issue is provided by collective agreements concluded by Siemens group companies.
- Collective agreements only very exceptionally contain provisions on the introduction of autonomous or semi-autonomous work teams, or the implementation of new assessment systems for employees - the rare cases include collective agreements in Slovnaft MOL and Volkswagen Bratislava. In these cases, the assessment relates to the employees´ professional careers and remuneration.
- The collective agreements examined do not contain any provisions on reducing the number of hierarchical layers, moving away from product-based structures to business units, multiskilling or job rotation.
Nevertheless, the above does not mean that modern elements of work organisation are not implemented in practice. They are used in some companies but are not subject to collective bargaining. In most cases, management considers practical enforcement of modern work organisation elements as its exclusive competence. Some exceptions exist - for example in the construction sector there have been negotiations on the conditions for transfer of employees to another workplace, including working abroad.
In the context of the introduction of work organisation changes, what kind of contractual and working time arrangements are provided - ie how is the flexibility and security issue being addressed?
In general, employers try as far as possible to increase the flexibility of employment conditions for their employees, and this often leads to a decrease in employees' previous job security. Therefore, trade unions often have objections about such employers' efforts. The Labour Code provides a framework for working time and its scheduling as a basis for collective bargaining. At present, the Labour Code allows for overtime work of up to 150 working hours yearly without the agreement of the employee or negotiation with trade unions. In general, the involvement of unions in the implementation of variable distribution of working time has decreased. The most recent amendment to the Labour Code (see below) enlarged the scope of reasons whereby employers can easily dismiss employees, eg without stating the reason for the dismissal and without severance payment. This is the case when the employee has a fixed-term contract or is on a probation period.
Trade unions accept a need to increase flexibility of employment conditions, but employers do not usually have an obligation to negotiate this issue with them. Trade unions are looking for their own strategy and policy in order to ensure reconciliation between the increasing need for implementation of flexible forms of employment and the maintenance of job security at work. Collective redundancies are only the theme on which the employer, according to the Labour Code, must consult with the representatives of employees. In this respect, measures aimed at reducing the impact of organisational changes on employees must be discussed with the employees' representatives. This obligation is usually included in collective agreements.
In the context of work organisation changes introduced with a view to improving productivity, what specific measures have been agreed?
Employers do not consider increasing productivity as a separate theme to be discussed within collective bargaining. Concrete measures in relation to boosting productivity are usually not included in collective agreements. Nevertheless, concrete measures to increase productivity have an impact on labour costs and wages. Therefore the productivity issue is indirectly included in collective agreements in the framework of provisions on wage increases.
What are the motives of the parties in concluding such agreements - please indicate the motives of each side (management and workforce), such as reducing costs, promoting flexibility, securing employment, preventing compulsory redundancy, or improving terms and conditions.
According to information provided by trade union representatives, management usually tries not to include in bargaining concrete provisions concerning changes in work organisation. In cases where certain provisions are agreed, their goal is to decrease costs, increase flexibility of the labour force and of employment conditions, and improve the company’s position and competitiveness in the market. Trade unions primarily seek to negotiate the highest possible increase in wages and greatest job security for employees.
What have been the results of collective agreements introducing work organisation changes? Drawing on assessments/evaluations made by researchers or the parties to agreements (employers, trade unions, works councils etc) or other sources, please provide information on issues such as the following:
- whether agreements have been successes or failures, and the reasons why in both cases;
- the impacts on flexibility and security (eg are there any successful examples of collective agreements addressing this issue as part of work organisation changes?);
- the impacts on productivity (has productivity been improved as a result of the work organisation changes introduced?); and
- the impacts on collective bargaining - are such deals broadly considered as concession bargaining, or as 'zero-sum' or 'positive-sum' situations? What are the implications for the structure, process or nature of collective bargaining (eg company versus sectoral? workplace representatives versus trade union? from “distributive” to “integrative” bargaining [with mutual gains for both sides]) and the role of management?
Where significant differences of interpretation exist in assessments on these questions - notably between the social partners - please report on the differing views.
There is currently no special research or surveys dealing with collective agreements on changes in work organisation. It is possible to provide estimates based on the views of representatives of trade unions and employers. As noted above, the issue of work organisation, changes in this area and the impact on productivity are very seldom included in collective agreements. It seems that this is because of the scope of collective bargaining, within which organisational changes are not at the centre of the social partners' attention. Collective agreements deal with this issue only through provisions that impose on the employer an obligation to consult with employees´ representatives on organisational changes that lead to the dismissal of employees, especially collective redundancies. In this respect, the issue of employment security is dealt with in collective agreements.
According trade unionists, employers are willing to agree on provisions that are, in the first instance, to their own benefit. The work organisation-related provisions that are most frequently negotiated relate to performance-related remuneration, the implementation of various mechanisms to retain employees and the use of flexible working time. If collective agreements include some elements linked to work organisation, they are formulated in a very general manner. It can be anticipated that the implementation of such general provisions in practice is unlikely to cause problems. Trade union representatives report no problems in relation to the fulfilment of such provisions included in collective agreements. Also, the available statistics do not reveal any cases of collective disputes concerning fulfilment of agreed provisions on work organisation.
Concrete measures on the implementation of modern work organisation were included in Slovakia's 2003 National Action Plan (NAP) for employment (SK0401110F) within the 'pillar' on 'encouraging adaptability of businesses and their employees'. The NAP contains three guidelines aimed at:
- modernising work organisation;
- cooperation among the social partners in improving work quality and safety, and flexibility of employment conditions; and
- supporting adaptability in enterprises as a component of lifelong learning.
In the process of setting priorities for implementing this pillar, emphasis has been put on support for collective bargaining at all levels on modernisation of work organisation, flexibility of working conditions and organisation of working time. Also a need has been underlined for support of lifelong learning as a tool for adaptation and the renewal of qualifications and skills of employees, especially in the area of information and communication technologies, in order to increase the competitiveness of companies. At present, there are no official data available on the extent to which the social partners concerned have fulfilled their planned tasks under this part of the NAP. However, the findings of the above review of selected sectoral and company collective agreements indicate they have not achieved much in this respect.
Debate and prospects
What impact has the kind of agreement referred to above had in your country, and what impact might such agreements have in future? What is the current debate on the topic? Please provide an assessment of prospects for the future in terms of work organisation bargaining in your country (differentiating by sector, if relevant).
Employers' representatives have frequently asked the government to change labour legislation in order to increase the flexibility of employment conditions. In 2003, one year after the adoption of a new Labour Code (SK0207102F), this theme was again the subject of intensive social dialogue and even dispute between the trade union representatives on one side and employers and the Ministry of Labour, Social Affairs and Family (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR) on the other. The trade unions had fundamental objections to planned amendments of the new Labour Code and they organised several protest actions. In the end, after lengthy tripartite discussions, trade unions accepted a compromise. Based on this, the Ministry submitted to parliament a draft amendment of the Labour Code. Parliament adopted these changes and from 1 July 2003 employers have more scope to increase employment flexibility (SK0312103F). On the other hand, trade unions can negotiate with a wider scope than before on concrete employment conditions within collective agreements.
Under these most recent changes in labour law, the scope of regulatory provisions has been reduced. At the same time, the role of collective bargaining has been increased, as there are now opportunities to negotiate on more or less any employment and working conditions issues, including work organisation. However, in practical terms, this opportunity has so far seldom been used in collective bargaining. Especially, the implementation of organisational changes is not dealt with and this fact can be perceived as significant weakness of the current collective bargaining process.
Trade unionists state that this situation exists because of employers´ lack of interest in including in collective agreements concrete tasks regarding work organisation that they can consequently be obliged to implement. Employers state that this issue is a very dynamic one and, therefore, they cannot precisely and in advance set concrete tasks for management in this field. At the same time, employers consider this area as very specific and demanding for trade unions, which need competent negotiators to deal with this issue. Trade unions discuss at sectoral level and in some cases at company level the possibility of negotiating on changes in work organisation. Although this theme is not currently a major one in collective bargaining, the unions consider negotiation on the issue of changes in work organisation to be important. They see work organisation as an important issue not only because of its influence on productivity and wages but also from the point of view of health and safety at work. (Ludovít Cziria, Bratislava Centre for Work and Family Studies)