Employers oppose new collective agreement extension rules

Recent amendments to the Act on collective bargaining have meant that employers’ consent no longer has to be necessarily obtained for the extension of multi-employer agreements. Employers are strongly opposed to the new rules and have rallied the support of opposition party members, who have asked the Constitutional Court to assess if the adopted changes comply with the country’s Constitution. Although the court has accepted their appeal, it has yet to make a decision on the matter.

New extension provisions

Amendments to Act No. 328/2007 on collective bargaining changed the rules for the extension of multi-employer collective agreements (SK0708019I). Under the previous provisions, the extension of collective agreements required the consent of the employer concerned. In many cases, employers did not agree to the extension and, as a result, the number of extended multi-employer collective agreements has been extremely small in Slovakia in the last four years. However, the amended law provides that each multi-employer collective agreement should be categorised in line with the Statistical Classification of Economic Activities in the European Community (NACE Rev 1 (523Kb PDF) and that its extension may be applied to employers whose prevailing business activity falls within the respective NACE code.

The proposal to extend the respective collective agreements is reviewed by a working group established by the Ministry of Labour, Social Affairs and Family (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR) for this purpose. Representatives of employers as well as trade unions participate in the decision-making process regarding the extension. Although the employer concerned can express their viewpoint in relation to the proposed extension, they cannot block the extension. Nevertheless, some exemptions do exist in this respect, whereby the extension cannot be applied: for example, on an employer that is already covered by another collective agreement, in small enterprises with less than 20 employees, or in companies where people with a disability constitute more than 10% of the workforce. According to a representative of the Metal Trade Union Association (Odborový zväz KOVO, OZ KOVO), Stanislav Tarnovský, a similar extension model was applied in Slovakia from 1991 to 2004, without raising any serious objections from employers.

Employers reject new rules

Employers have strongly criticised the provision allowing for the extension of multi-employer collective agreements without the consent of the employers concerned. According to representatives of the National Union of Employers (Republiková únia zamestnávateľov, RUZ SR), the new rules for the extension of collective agreements do not comply with the Constitution of the Slovak Republic. At present, a multi-employer collective agreement can be imposed on employers that do not agree with its provisions. Employers are concerned that the adopted changes in relation to extensions will force them to accept collective agreements, in turn increasing their operational costs.

As a result, employer representatives lobbied against the adoption of new rules proposed in the collective agreement act in parliament. However, they failed to succeed in their aim and the proposed changes entered into effect on 1 September 2007. Nevertheless, the employer representatives did not abandon their cause and rallied the support of a group of opposition members of parliament; the latter asked the Constitutional Court of the Slovak Republic (Ústavny Súd Slovenskej Republiky) to review whether the new legal provisions concerning the extension of collective agreements are in compliance with the country’s Constitution. Although the court accepted their appeal, it has yet to make a decision on the matter.

Commentary

While employer representatives have expressed their opposition to the current provisions regarding the extension of collective agreements, the reactions of individual employers are not necessarily homogenous. For example, a multi-employer collective agreement concluded by OZ KOVO in the machine and electrical industries for 2008 was recently extended to several employers. While some of the employers protested against the extension as it increased their operational costs, others had no objections to the extension. The latter mainly comprised employers which had already provided their employees with higher wages and better working conditions than those stipulated under the extended multi-employer collective agreement. Although the economic aspects of extensions are very important for employers, a central question still remains: that is, whether the new rules regarding the extension of multi-employer collective agreements in Slovakia comply with the country’s Constitution.

Ludovit Cziria, Institute for Labour and Family Research

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