Workers win pay rise in compromise deal at US Steel Košice

Slovakia’s biggest steel company, US Steele Košice, has agreed a deal which will see workers’ pay increase by 4% in return for a two-hour increase in the working week and a 12% reduction in the workforce. The compromise comes after four months of negotiations and paves the way for the company to cut 1,650 jobs by 2015 as it strives to compete in the European and global steel markets. In late 2011, a fall in orders had forced unions to agree to the company temporarily cutting hours.

Unions accept restructuring

The biggest steel company in Slovakia, US Steel Košice, which has around 13,000 employees, has negotiated with trade unions to strike a deal which it hopes will improve efficiency and productivity.

Late in 2011, the company’s management agreed with unions on a shortened working week for a period of two months following a decrease in orders (SK1202019I). Later, unions agreed on the implementation of a streamlining plan which will reduce the total number of jobs at the company by 1,650 between August 2012 and the end of 2015.

The trade unions have accepted a voluntary redundancy scheme to reduce jobs, and have agreed that workers who leave will not be replaced – several hundred workers leave the company each year when they reach retirement age. The company has guaranteed that there will be no compulsory redundancies.

Tough collective agreement negotiations

In March 2012, trade unions and management were locked in tough negotiations on a new collective agreement.

Mikuláš Hintoš, Chair of the company’s trade unions, reported that management would only agree to wage increases if unions and workers would agree to extended working hours. The company wanted to extend weekly working hours in its continuous operations by four hours, from 33.5 to 37.5 hours, and to reduce the number of shifts, even though the unions claimed that 99% of the employees affected were opposed to the proposal.

The unions argued that employees’ wages had not gone up in line with increases in their skills.

Management at US Steel Košice also wanted the option to cut around 300 administrative jobs by the end of June 2012 – approximately 10% of the company’s white collar workers. According to Hintoš, management submitted this proposal during the collective bargaining negotiations.

The company’s spokesman Ján Bača said the priority was for the company to remain competitive in the future

Compromise on wages and working hours

Discussions continued between management and unions for four months, completing 11 rounds of negotiations – the longest in the history of the company.

The final deal was based on compromise from both sides. The new collective agreement is valid until the end of 2014 and includes an increase in wages by 4% a year, with the average wage in the company reaching almost €1,300 per month. At the same time, the flexible component of wages – expected to be equal to 7% of the company profits – will still be paid to each employee. The working hours in continuous operations will, however, increase by two hours per week, from the current 33.5 to 35.5 hours.

In addition, the social partners agreed that planned cuts in staff numbers would be achieved through the natural retirement of employees, and through an attractive cash settlement offered by management to those willing to take voluntary redundancy.

US Steel Košice’s Ján Bača has said that the new collective agreement reflects the management’s desire to create conditions in the company which would enable it to effectively compete both in European and global steel markets.

Ludovit Cziria, Institute for Labour and Family Research

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