Shortened working time at largest steel company

U.S. Steel Košice, the biggest steel company in Slovakia, responded to a drop in orders, primarily from the construction sector, by agreeing with trade unions to introduce a four-day working week for two months from January 2012. Employees would receive 60% of their wages for the lost day of work. Management wanted to preserve jobs and be more flexible in reacting to actual customer demand and the economic situation. But the company resumed normal hours after only one month, as their economic situation had improved.

Decline in advance orders

U.S. Steel Košice, the biggest steel company in Slovakia, has introduced a four-day working week to enable the company to respond to a drop in orders in Europe without job losses. Company management decided to introduce the shortened working week from January 2012.

The company used shortened working time before, in 2009, when the economic crisis significantly affected the Slovak economy. Management and trade unions agreed to introduce a four-day working week in February 2009 for about six months, and again in December 2009. In addition, about 400 white-collar workers were dismissed.

The metal industry is the second largest economic sector in Slovakia and production depends heavily on orders from car manufacturers and the construction industry. Investment in construction has been declining for a long time but so far demand for Slovakian steel from the automotive industry has not decreased.

Before the global economic crisis in the second half of 2008, orders for metal products used to be placed well in advance, as much as half a year ahead. As a result, the effects of the crisis on the Slovak economy were only fully reflected some six months later in 2009. Since then, car producers have appeared to be reluctant to place advance metal orders, wanting first to process existing material held in stock.

Company moves to four-day working week

U.S. Steel Košice’s Public Affairs Department Director Ján Bača commented that shortening working time by one day for two months would allow the company to adjust its operational costs in order to adapt to the complicated economic situation in Europe.

According to a report in the daily Hospodárske noviny on 16 December 2011, the company believed this measure would minimise the impact on employees and allow it to react flexibly to customer demands.

The company management discussed the firm’s economic situation with local trade unions and they agreed on a four-day working week to begin in January 2012 for a period of two months. In line with the provisions of the Labour Code, workers were to receive 60% of their usual wage for the day they did not work.

The new working hours were not likely to apply to the approximately 13,000 employees, but only to those directly involved in production.

According to the Chair of the company’s trade union council, Mikuláš Hintoš, the agreement with management would prevent the company having to adopt even less popular measures such as dismissals. Spokesman Ján Bača confirmed this to the daily Pravda, as reported on 16 December 2011.

Nonetheless, the company and the trade unions decided to return to the standard workweek after only one month, stating that the economic situation had improved.

Commentary

U.S. Steel Košice is the first big company in Slovakia to respond to the expected economic developments this year in Europe with concrete employment measures.

Another important company in the Slovak steel industry, Železiarne Podbrezová (ŽP), has not registered a drop in orders so far. ŽP Board President Vladimír Soták said: ‘We are working to full capacity and Železiarne Podbrezová is not considering the dismissal of employees.’

The Chair of ZP’s local trade unions, Pavol Koštial, was quoted in the daily Pravda as saying: ‘We do have orders at the moment, but people are starting to have concerns about whether we will also be successful in the future.’

Ludovít Cziria, Institute for Labour and Family Research

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