Slovakia: Latest working life developments – Q1 2018
A restart of collective agreement extensions, a successful wage negotiation for the mechanical engineering sector, and some difficult wage negotiations for leading companies in other sectors are the main topics of interest in this article. This country update reports on the latest developments in working life in Slovakia in the first quarter of 2018.
Extension of collective agreements restarted
After an interruption of almost two years, the extension of collective agreements was once again allowed in Slovakia from 1 September 2017.
Extensions are based on the ‘representative collective agreement’ defined by law. Within a sector defined by NACE (the classification of economic activities in the EU), they cover more employees than other multi-employer collective agreements. Contracting trade unions should be present in at least 30% of companies active in the sector.
Contracting parties should notify the Ministry of Labour, Social Affair and Family (MPSVR SR) when they conclude a representative collective agreement. In contrast to previous decisions on the extension, the MPSVR SR only validates the representativeness of collective agreement and informs about the result by legal notice.
Social partners in the glass and construction sectors took advantage of this opportunity and informed the MPSVR SR when they had concluded representative collective agreements. Their extensions entered into effect on 1 February 2018.
Wage increase in mechanical engineering sector
The metalworkers’ federation OZ Kovo, together with the Association of Mechanical Engineering, have agreed on an average wage increase of 5.22% (which equates to around €31 per person) for the mechanical engineering sector, effective from 1 February 2018. Negotiations took only two rounds and the agreement covers more than 20,000 employees. According to OZ Kovo, negotiation of higher wages at all levels is a priority for the union, and the increase agreed in this latest deal is the highest seen in any sectoral agreement in the last few years.
Tough wage bargaining in large companies
On 8 January 2018, trade unions for Embraco Slovakia, a manufacturing company with about 2,300 employees based in Spisska Nova Ves, announced their intention to strike if wage negotiations could not be concluded satisfactorily. Unions demanded a 10% wage increase and payment of so-called 13th and 14th wage (bonuses paid in the summer and Christmas holiday periods). After some difficult negotiations, the trade unions and the management reached a compromising agreement, and on 22 January 2018, social partners concluded the collective agreement for 2018–2022. Both trade unions and management are satisfied with the wage increases for 2018–2019, which are higher than the regional average. According to the Embraco CEO, Marcelo Borba, employees’ average wages will increase by 11% in 2018 and by 6% in 2019. Employees will also receive annual bonuses: €700 in 2018 and €800 in 2019. While wage negotiations in 2016–2017 took almost four months, this agreement was arrived at in less than a month.
Trade unions' demand for higher wages has also led to disagreements and long-term negotiations in two leading automotive companies: PSA Peugeot Citroën Slovakia, in Trnava, and KIA Motors in Zilina.
Wage negotiations in 2018 indicate that the dwindling work force in the Slovak labour market has enhanced the position of trade unions. This can be illustrated by the wage increase agreed as part of a notable multi-employer collective agreement in the mechanical engineering sector, and some difficult wage negotiations in the manufacturing and automotive sectors.