Slovenia: The impact of the information and consultation Directive

  • Observatory: EurWORK
  • Topic:
  • Published on: 08 March 2009



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Country:
Slovenia
Author:
Samo Pavlin
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Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The Slovenian government took the view that existing legislation already met the requirements of the information and consultation Directive, and that no specific implementation measures were required. However, subsequently it made a number of minor adjustments to the law in the light of the Directive in 2007. Trade unions do not agree that the Slovenian legislation fully meets the Directive’s requirements, while employers take the opposite view. Implementation has not had any significant effects on Slovenian industrial relations.

Question 1: National implementation of the Directive

Has the information and consultation Directive been implemented in your country? If so, did this require:

(i) extensive reform or major new legislation?(ii) an extension or relatively minor adaptation of pre-existing provisions (e.g. on national works councils or similar bodies)?

or

(iii) no new measures?

Slovenian workers had a wide range of participation rights, based on the German model, before Directive 2002/14/EC on information and consultation was adopted. Employee participation is based on Article 75 of the 1991 Slovenian Constitution, which guarantees workers the right of codetermination. With this as the starting point, the Law on the Participation of Workers in Management (LPWM) was passed in 1993. It provides two channels of workers’ participation: a) workers’ representation on the supervisory and management boards of companies; and b) an employees’ council elected by workers in large companies, or a workers’ trustee elected in smaller companies (SI0311102F). While Slovenia’s legislation on workers’ participation is advanced, in reality the implementation of the LPWM , in the view of trade unions, has been slow: infringements of workers’ rights still occur, while workers are often unaware of both their rights and of the enforcement mechanisms.

The government took the view that Slovenia’s existing provisions on information and consultation in the LPWM met the requirements of the Directive, and that no implementing measures were required (a view that was not uncontested – see answer to question 3). However, in 2007, the LPWM was amended, largely to harmonise its provisions on workers’ board-level participation with a new Company Law (CL) (2006). The new CL introduced the option for companies to have a single board of directors instead of a two-tier structure involving both a management board and the supervisory board. The LPWM was amended to deal with workers’ representation on boards of directors where companies opt for this single structure. The amendments to the LPWM, which were was passed on 8 March 2007 and entered into force on 7 April 2007, also made a number of minor changes to implement Directive 2002/14/EC more completely. These amendments extended some information and consultation rights, added provisions on members of employees’ councils and board-level employee representatives, and inserted a direct declaration that the LPWN implemented Directive 2002/14/EC (and Directive 2001/23/EC on business transfers).

Under the LPWM, information and consultation rights apply at undertaking level and also at establishment level if establishments have legal form. There is generally no workforce-size threshold for application of the law, but there are several exceptions (article 2 of the LPWM), notably for ‘physical persons’ (ie sole entrepreneurs), which are covered only if they employ 50 or more workers (a contentious point – see answer to question 3). The Directive itself does not make any differentiation as to the legal form of undertaking or establishments

According to the Article 3 of the LPWM, information and consultation rights are exercised by workers individually or collectively through employees’ councils, workers’ trustees or board-level employee representatives.

Implementation of the provisions of the LPWM is a’ facultative possibility’ and not a duty. This means that an initiative from the workers’ side (usually from a trade union) is required to ‘activate’ the participation rights.

The scope of agreement-based information and consultation arrangements may differ to a large extent from the minimum requirement of the LPWM. According to Article 5 of the LPWM, further regulation of participation may be fixed by agreement between the employer and the employees determining rights to participation in more detail and laying down extra rights and other types of participation on top of those determined by the legislation (SI0311102F).

Question 2: Infringement proceedings

If yours is one of the countries against which the European Commission instituted infringement proceedings for non-compliance with the Directive (see above), on what grounds was this done? What accounts for the government’s inaction or delay? How has the government reacted to the infringement proceedings? And has the matter now been resolved?

No infringement proceedings have been launched against Slovenia for non-compliance with the Directive. According to an report on the Directive’s implementation (ETUI-REHS Implementation Report, Slovenia), the European Commission sent a reminder to Slovenia about notifying the Commission of implementation of the Directive in 2005, whereupon the government informed the Commission that it considered that existing legislation met the Directive’s requirements.

Question 3: Views of the social partners

(a) How did national employers’ groups and trade unions react to the Directive when it was adopted and what were their views on how it should be implemented in your country? If there was debate and controversy, on which aspects of the Directive did it focus? How and to what extent were the social partners involved in the implementation process and to what extent did they influence your government’s response to the Directive?

Slovenia was not involved in the process of drawing up the Directive, which preceded its EU accession in 2004. It was generally believed that Slovenia’s existing statutory workers’ participation rights were more advanced than those in the Directive.

The biggest trade union confederation, the Union of Free Trade Unions of Slovenia (Zveza Svobodnih Sindikatov Slovenije, ZSSS), claimed that the transposition of the Directive was not conducted in a satisfactory way. The ZSSS stated that the proper procedure was not followed, with a lack of involvement of the ZSSS or other trade union organisations.

ZSSS argued that the LPWM’s definition of the content of information and consultation is obsolete - especially in cases of relocations, take-overs, acquisitions of new companies in other countries and the establishment of subsidiary companies - and should be revised in order to comply fully with the Directive.

In the view of the ZSSS, the main problem with Slovenian transposition is that it limits the Directive’s application by differentiating between employers on the basis of their legal form. The LPWM excludes companies with the legal status of a ‘physical person’ and employing fewer than 50 employees. This exclusion has been the subject of argument in the Constitutional Court of the Republic of Slovenia ( Ustavno sodisce Republike Slovenije, US RS)

Neodvisnost, the Confederation of New Trade Unions of Slovenia (Neodvisnost, Konfederacija novih sindikatov Slovenije, KNSS) was not involved in the 2007 amendments of the LPWM and was not active in the related parliamentary procedures. The Confederation of Trade Unions of Slovenia PERGAM (Konfederacija sindikatov Slovenije Pergam, PERGAM) was not active in the parliamentary procedures, however it was active in debate on the CL (2006) and took similar standpoints to the ZSSS.

The Association of Employees’ Councils of Slovenian Companies (Zdruzenje svetov delavcev slovenskih podjetij, ZSDSP), which is organised within the Study Centre for Industrial Democracy (SI0312101F), is an organisation that brings together the employees’ councils of the biggest Slovenian companies. Although not an ‘official’ social partner, it contributed to the parliamentary debate with several notes on the first draft of the amended LPWM, which were later taken into account. It also made representations through the parliamentary group of the Slovenian Social Democratic Party (Socialni demokrati, SD) and as a result the ZSDSP was invited to participate in the discussion. This unusual development was a result of the ‘dual channel’ employee representation (unions and employees’ councils) within Slovenian companies ( SI0311102F). According to some Slovenian experts, the issue of who is the proper interlocutor in debates concerning workers’ participation is unclear. Trade unions, whose membership is voluntary and contribution-based, are believed by some to be less suitable employee representatives than employees’ councils, through which all the employees are represented.

The employers’ representatives were very satisfied with the debate on the 2007 amendment of the LPWM. From their point of view, the main debate took place during adoption of the CL (2006). The draft of the CL (2006) was discussed at the 139th session of the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS), the country’s central body for tripartite social dialogue. This was the first step in amending the LPWM, which had to be harmonised with the new company law regulations. The formal procedure of revising the LPWM started in September 2006 without a prior discussion in the Economic and Social Council, as the government sent the draft amendments directly to the Parliament. According to the employers’ representatives, there were no new issues to be discussed. The trade unions disagreed with this, s position supported during the parliamentary debate.

The Employers’ Association of Slovenian Companies (Združenje Delodajalcev Slovenije, ZDS) together with the Chamber of Commerce and Industry (Gospodarska Zbornica Slovenija, GZS) and the Chamber of Craft (Obrtna Zbornica Slovenije, OZS) and the Employers’ Association of Slovenian Crafts (Združenje delodajalcev obrtnih dejavnosti, ZDOD) published a common standpoint concerning the information and consultation Directive which they maintained during the whole debate, concentrating mainly on the issue of limiting the costs of workers’ participation.

The Ministry of Labour, Family and Social Affairs (Ministrstvo za delo, druzino in socialne zadeve, MDDSZ) informed the social partners about the notification that had been sent to the European Commission when the procedure of amending the existing LPWM started in 2006. According to this notification, the existing LPWM already met the requirements of Directive 2002/14/EC.

To sum up, there was little direct debate on the Directive itself. Three actors (the ZSSS, the ZDS and the ZSDSP) were most active during the debate. All issues concerning industrial relations, conditions of work, labour legislation, social rights and employment policy, as well as other broader economic and social issues which concern the interests of workers and their families, employers' interests and government policy should be discussed in the Economic and Social Council before being referred to parliament (SI0207103F) , but this did not occur in the case of implementation of the Directive. As a result, the social partners had to make representations during the parliamentary procedure.

(b) What are the social partners’ views on the measures finally adopted (if any) to implement the Directive in your country?

The ZSSS maintained its position that the amended LPWM did not fully transpose the Directive, because of its exclusion of companies with the legal status of a ‘physical person’ and employing fewer than 50 employees, and because its definition of the content of information and consultation is inadequate in cases such as relocations and takeovers (see above).

The ZSSS also has concerns about the Slovenian legislation’s ‘business secrecy’ and confidentiality provisions, which allow the possibility of limiting rights to information and consultation. It believes that the definition of business secrets given in Article 39 of the CL (2006) is very general and enables a company itself to define which data are to be considered as confidential. It is possible to resolve problems arising from companies’ interpretation of what constitutes a business secret by way of arbitration or by court procedure, although in practice this does not occur.

Under the former law, the protection of employee representatives was relatively well defined and guaranteed, according to ZSSS. However, according to the amended LPWM (April 2007), the employer is no longer obliged to ask for the prior approval of the employees’ council or even provide information before starting procedures against members of the council – this applies to wage decreases, disciplinary procedures or applying a less favourable status. It is up to employers to decide when and if to start sanctions against council members. Only in the case of a dismissal is the employer obliged to first consult with the employees’ council.

In the opinion of the ZSSS, there is no evidence of the social partners contributing to the definition of practical arrangements for consultation and information. ZSSS states that this is because, from the employers' viewpoint, these arrangements generate costs and do not contribute to the competitiveness of companies. This is seen in the fact that in practice very few employees’ councils have the possibility of appointing full-time members.

The ZSDSP is also concerned about the exclusion from the LPWM of physical persons employing fewer than 50 workers. Further, it believes that employers should be made responsible for taking the initiative to set up employees’ councils to fulfil information and consultation obligations.

The ZDS, GSZ and OZS employer organisations argued that the LPWM adequately implemented the Directive. The ZDS regards the Slovenian transposition procedure as being correct, including in terms of tripartite dialogue. All documents were available to the social parties, as confirmed by the report of the ESSS. All definitions are up to date, including precise definitions of business secrets in the CL (2006). In the opinion of the ZDS, implementation of the Directive and its influence on Slovenia’s legal system are complex issues and some organisations do not have properly educated people available for the purpose of analysing the outcomes of the Directive’s implementation. According to the ZDS, this has caused an incorrect assertion about the real intentions of employers and suspicions about limiting employee representation in Slovenia. The ZDS states that is has, on the basis of an ongoing dialogue with companies, been effectively supporting their interests.

The Slovenian Chamber of Commerce and Industry and the Slovenian Chamber of Craft had wanted ‘physical persons’ and employing fewer than 100 employees excluded from the LPWM, rather than the actual 50-employee threshold. They oppose the imposition of any additional costs and obligations on small companies whose owner is responsible for the company’s whole assets, which cannot be equated with multinational corporate undertakings.

Question 4: Impact of the Directive on industrial relations practice

What impacts on industrial relations practice has the implementation of the Directive had in your country?

Implementation of the Directive has so far had little impact on industrial relations in practice. The LPWM already essentially enshrined its information and consultation rights. However, the revised LPWM reduced the level of protection of workers’ representatives.

According to the ZSSS, workers’ participation does not attract sufficient political support and media interest, and the public is not informed about controversial issues. As a result, Slovenia is seen with some satisfaction as having a high level of rights and one of the best workers’ participation systems in Europe, even though this is often the case only in formal legal terms rather than in reality. Employers fear unnecessary costs and use arguments related to company ‘competitiveness’, which can be persuasive.

There is no systematic monitoring of workers’ participation and only scattered data are available. According to a Cranet survey conducted in 2001, employees’ councils were present in 76.7% of surveyed companies with more than 200 employees. A 2004 Cranet survey of larger companies found that employees’ councils were present in 63.9% of companies, which indicates a substantial decrease. Given the high proportion of SMEs in the Slovenian economy, an estimate by the ZSSS that about 50% of Slovenian employees are represented by an employees’ council and/or local trade union organisation seems to be realistic.

ZSDSP has also conducted a study of coverage by employees’ councils. It puts coverage at about 80%, and finds no downward trend (as found in the Cranet survey). The ZSDP is growing stronger - established in 1996 with 10 member employees’ councils, in 2007 it has 108 members which represent 10% of the companies where councils may be established. It estimates that employees’ councils cover around 25% of all employees of Slovenian companies.

The Directive has not changed the way disputes on consultation procedures are to be resolved, with arbitration still used. There is no collection of data about arbitration procedures, and the procedures are not centralised (some data are given to the MDDSZ, some to trade unions). A judicial procedure is also foreseen but, according to the ZSSS, there are in practice very few cases, mostly because of the long and ineffective procedure, even though a ‘fast track’ method is possible. Sanctions are insignificant and ineffective in practice, according to the ZSSS.

Question 5: Interface with other national information and consultation provisions

Please comment on the relationship between national provisions implementing Directive 2002/14/EC (general framework) and those implementing Directives 98/59/EC (collective redundancies), 2001/23/EC (business transfers) and 94/45/EC (European Works Councils).

Directive 2002/14/EC was implemented by the LPWM. The provisions of Directives 98/59/EC on collective redundancies and 2001/23/EC on business transfers were transposed in the Labour Act (LA, 2002). Articles 96-102 of the LA regulate the procedures on consulting and informing workers about planned workforce reductions and collective redundancies. Consultations in these cases occur via trade unions. However, according to the LPWM, the partner to consult on the status of the company, personnel matters and health and safety at work is the employees’ council or workers’ trustee, which brings about a duality in employee representation and may imply potential conflicts with trade unions. The main differences between the LPWM and the LA concern the timing, procedures and scope of consultation. Further, the penalties for breaching the LA are more serious.

EU Directive 94/45/EC on European Works Councils (EWCs) was transposed into Slovenian law by the Law on European Works Councils (LEWC, 2002), which was adopted by parliament on 20 June 2002 (SI0208103F). It came into effect when Slovenia joined the EU in May 2004 (or earlier where multinational companies decided to include in their EWC or information and consultation procedure employee representatives from their subsidiaries in Slovenia).The LEWC can be seen as a natural extension of the LPWM, which does not take supranational company structures into account.

The legal procedures relating to information and consultation differ as they are regulated by different laws as well as different penalties for not meeting the obligations. The penalties for breaking the LPWM are relatively low, varying from 4.000 to 20.000 EUR for legal entities and from 2.000 to 4.000 EUR for physical persons. In the first instance, disputes are resolved through arbitration procedures, and a role may also be played by specialised courts competent for determining labour disputes.

Question 6: Commentary by the national centres

The implementation of the Directive has not substantially changed the labour law and collective bargaining landscape in Slovenia. The rights of employees’ councils and workers’ representatives to information and consultation were already guaranteed in Slovenian law before the Directive was implemented. However, implementation of the Directive smoothed the way for setting up employee representation in undertakings that had hitherto had no access due to a lack of trade union representation. Nevertheless, not all small and medium-sized enterprises are covered as Slovenia excluded physical persons employing less than 50 employers from the Directive’s requirements. Slovenia has thus transposed the Directive in a limited way while stating that the existing domestic measures offer adequate protection.

The right to information and consultation is not automatic in Slovenia, as it must be triggered by employees, and its exercise is restricted by having to meet certain employment thresholds which, according to some experts, can be treated as a serious limitation.

The provisions relating to the confidential nature of certain information have not been transposed directly in Slovenia giving, in the opinion of certain experts, a lot of space for restricting the access to information for employees' representatives.

There are substantial differences in the opinions between employee and employer representatives in respect of the extent to which the Directive has been correctly implemented. The provisions of the LPWM are also far from being fully implemented.

Data for this reponse were collected, based on structured interviews, from the following:

  • Mr Mato Gostiša PhD, Študijski Center za industrijo demokracijo
  • Ms Metka Roksandič, Zveza svobodnih sindikatov Slovenije
  • Ms Lidija Tratnik, Mr Andraž Rangus, Ministrstvo za delo, družino in socialne zadeve
  • Mr Boris Mazalin, Konfederacija sindikatov 90 Slovenije
  • Mr Dušan Rebolj, Konfederacija sindikatov PERGAM
  • Mr Franc Kokalj, Združenje delodajalcev Slovenije
  • Ms Metka Penko Natlačen, Gospodarska Zbornica Slovenije

Samo Pavlin, Centre for Organisational and Human Resources Research

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