“Slovenia: EIRO CAR on the effect of the Information and Consultation Directive on Industrial Relations in the EU Member States five years after its transposition

  • Observatory: EurWORK
  • Topic:
  • Participation at work,
  • Labour and social regulation,
  • Industrial relations,
  • Published on: 18 January 2011

Bogumila Plachtej

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

The basis for the information and consultation in Slovenia were set already in 1993 with the WPMA (Worker Participation in Management Act 42/93) however its level and dynamics depends on the culture of the company and the attitude of management. The implementation of the Directive did not significantly change the rights and practices of I&C. However the increasing awareness of employees and their will of involvement influenced the employers' side.

Question 1: Trends in the incidence of undertaking- and/or establishment-level information and consultation bodies

(a) Using official statistics where possible, please provide annual data for the years 2005-2009 (inclusive) on the number and proportion (%) of undertakings and/or establishments which have an information and consultation (I&C) body or equivalent.

There is no official statistics but only rough estimates of the number and proportion of I&C bodies in Slovenian companies. According to The Association of Employees’ Councils of Slovenia (ZSDS), an organisation that brings together the employees’ councils (EC) which are the official I&C bodies of Slovenian companies (SI0312101F), their 116 members cover about 80 thousand employees (approximately 20% of Slovenian companies).

Based on the estimates of the Association of Employers of Slovenia Employers of Slovenia (ZDS) about 75% of Slovenian big companies have I&C bodies, according to The Association of Free Trade Unions of Slovenia (ZSSS)(explain acronym please)I&C bodies are present in 50% of big companies, 30% of medium and 20% of small companies.

(b) Where possible, please provide data to show trends in the uptake of I&C bodies by:

(i) size of undertakings/establishments in terms of employment levels (i.e. under 50 employees, 50-99 employees, 100-199 employees; 200-499 employees, 500 or more employees or other appropriate size bands used in national statistics)

(ii) sector (broadly defined, i.e. industry/manufacturing, private services, public services).

Employees can set up an EC in any company (legal person according to the Company Act) with more than 20 employees with the right to vote. In companies with 20 or fewer employees there is a right to set up a workers’ trustee. With the implementation of the Directive the right to set up an EC was extended to businesses which are not companies – such as sole traders, however, in these cases the lowest threshold is 50 employees.

(c) Please provide information on the extent of I&C arrangements in:

(i) smaller undertakings (those with fewer than 50 employees)

(ii) public administration

There is no evidence of EC in entities employing less than 50 workers because in most of them their rights are executed by the workers’ trustee. The Confederation of Free Trade Unions of Slovenia (ZSSS) estimates that only about 20% of small companies do have any I&C body.

A Law on Workers' Participation in the Management of Public Institutions is still missing, which undoubtedly presents a significant legal gap in the regulation of economic democracy despite Article 75 of the Constitution of RS obliging to pass the Act. The decision of the Constitutional Court (Decision No. IM-160703-8 of 19/05/2005) points it out as an unconstitutional condition which should be removed as soon as possible.

(d) What factors explain any increase/decrease in the incidence of I&C bodies (e.g. economic climate, legislative change, other)?

There is a slight increase in the number of ECs due to a better awareness of the employees as well as a public discussion about issues connected to participative management. Especially the failure in passing The Act on Financial Participation of Workers, which envisaged the obligatory financial participation in profits, contributed to more awareness and involvement of employees.

Question 2: Procedures for establishing I&C bodies

(a) What are the procedures for establishing I&C bodies in your country? For example, are I&C bodies mandatory (i.e. employers are obliged by law to establish them), or is their establishment dependent on employees/trade unions triggering statutory procedures? In the latter case, who can initiate the procedure? Is there a specified level of employee support required?

The establishment of an EC is voluntary (not a duty on the employer) and is established only on the request of workers (it is their right). Workers are entitled to elect an EC in companies employing more than 20 workers who have active voting rights (all workers who have been employed in the company permanently for at least six months). All workers with active voting rights who have been employed in the company on a permanent basis for at least 12 months have the right to be elected to the EC. Members of the EC are directly elected in a secret ballot. The candidates for election may be nominated by workers with active voting rights. The number of workers required to nominate a candidate varies (at least three workers in a company with 21-50 employees, up to at least 10% of workers in a company with over 300 employees, a proposal submitted by at least 50 workers is valid in any event.) In addition, each representative trade union has the right to nominate candidates.

An EC may determine that candidates are proposed and elected separately for individual groups of workers (such as women, workers with disabilities or young workers), and for separate organisational units or parts of the production process, etc. The employer must assure free and secret elections to the EC. The necessary expenses for the organisation of these elections are at the cost of the company.

(b) Please supply any available data on the extent to which I&C bodies have been:

(i) requested by employees

(ii) requested by trade unions

(iii) initiated unilaterally by employers.

According to available estimates, 90% of established EC were initiated by trade unions and the remaining 10% by employees. There is no evidence of employers’ initiative.

(c) Have the national government and/or the social partners in your country actively promoted the establishment of I&C bodies? If so, how have they done this?

The promotion of EC is of core interest of ZSDS and it is also included as an important guideline in the working programme of ZSSS. Both are active in the legislative area (posting amendments, giving initiatives of legislative changes or starting legal procedures) and PR, with press releases and media information about social dialog issues. They also ‘promote’ the idea in the field, i.e. in the companies offering consultation and help.

(d) What explains the absence of I&C bodies in some undertakings/establishments in which I&C bodies are supposedly mandatory or the statutory right to trigger their introduction applies?

According to employee representatives in some establishments there are problems with regard to the inactivity of employees, their fear of possible consequences (loosing jobs, mobbing). It is also a common opinion that they are too weak to successfully cope with management’s resistance to include them in the decision-making process.

On the other hand, the WPMA doesn’t give any legal instrument to impose the right to establish the EC and to conclude an “ agreement with the employer.

Question 3: Constitutional provisions

(a) Are the structure, rights and functioning of I&C bodies in your country determined by:

(i) statutory requirements that apply to all establishments/undertakings

(ii) organisation-specific agreements/arrangements that may differ from the statutory provisions, providing the scope for organisations to vary the design of the I&C body and the processes of information provision and consultation

(iii) a mixture of the two.

The minimum basis for an EC is set by law, which also envisages the conclusion the 'participative agreement' as an agreement between an EC and an employer. Agreements, signed mainly in bigger companies, determine participation rights in more detail and lay down additional rights.

(b) To what extent can and do organisation-specific agreements/arrangements differ from national statutory requirements on I&C? What motivates the parties to introduce such agreements/arrangements? Please summarise any available data on the provisions of organisation-specific agreements/arrangements.

Participative agreements more precisely define ways of financing EC activities, especially additional expenses (consultation, education, and legal help) and the scope of their involvement. They often include the agreements profit sharing.

(c) Are the terms of organisation-specific agreements/arrangements enforceable? What procedures – e.g. complaint to external administrative or judicial authorities (please specify which) – are available for this purpose?

When the agreement is signed there is a possibility to enforce it by a decision of an arbitration body or by means of a dispute lodged at the Labour and Social Court. There is also a possibility of complaining to the Work Inspectorate of Slovenia. However, the existing penal provisions in the WPMA, which virtually represents the only possible legal basis for concrete and action-based penalties for work inspection, are inadequate as the most common and most serious violations occur in practice and are not considered as an offense.

Question 4: The main subjects for I&C

(a) What types of information are regularly provided by senior management to I&C bodies? Please give examples.

It usually provides information on the company’s economic situation and prospects, changes in company’s activities, changes in the organisation of technology and production as well as a copy of the company’s annual accounts.

(b) What issues are typically the subject of consultation between management and employee representatives? Please give examples.

Consultation is conducted about company-related issues as: changes in the company’s legal status, sale or closure of the company or substantial parts of it and significant changes in the ownership, the employee-related issues, which include the need for new staff (how many and what sort); job classification, transfers (more than 10% moving out of the company or somewhere else within it), new rules on pensions and other benefits, job losses and the disciplinary code. In addition, there are some areas where the works council must agree with the employer’s proposals before theses can be implemented. These are the arrangements for annual leave, performance assessment criteria, suggestion scheme???, use of social facilities, such as holiday homes owned by the company, and criteria for promotion.

In 2009 / 2010 the main subjects of discussion were: the increase of minimum wages (and its dynamics) and possible solutions to avoid the transfer of production to Bosnia and Herzegovina, Serbia or Egypt (Gorenje Tiki, Iskra, Kolektor).

(c) What issues are typically raised by employee representatives themselves? Please give examples.

The main concern of the ECs is – in addition to questions of remuneration (including the assessment of performance, remuneration of innovative activity in the company, promotion criteria) and work organization - the organisation and implementation of safety measures.

(d) Since the onset of the recession, to what extent have I&C bodies been a vehicle for dialogue and consultation over management decisions concerning restructuring and recession-related developments? Please provide a general overview with evidence and examples.

Where present, ECs are actively involved in consultations concerning anti-crisis measures. The ZSDS has prepared special guidelines containing recommendations for ECs about the planning and implementation of anti-crisis measures. The main idea is to equip the EC members with the legal knowledge concerning workers’ rights, warn them about possible traps and false arguments, , and focus on the importance of cooperation with all social partners in the company.

E.g. Gorenje, the biggest Slovenian household appliances maker, reached an interim social agreement on shorter working weeks switching from 40- to 36-hours resulting in a 10% pay cut. It was also agreed that both administration and management were subject to a 10% pay cut, but they kept on working for 40 hours per week.

Question 5: The nature and extent of the I&C process

(a) How often do I&C bodies typically meet with management? Is it common practice for special meetings of the I&C body to be called to consider urgent or important matters? If so, on what issues?

The employer and the works council, or its committee, shall have meetings at the request of the employer or of the works council. Typically they meet once per month however, the number of meetings vary from 6 to 20 per year depending on the company.

(b) How does consultation take place? For example, is information on proposed changes provided by management so that employee representatives can prepare a considered view? Do managers provide a reasoned response to employee representatives’ opinions? Examples of good and poor practice would be helpful.

It is the employer’s obligation to keep the EC informed and request joint consultations on the status (legal situation) of the company, personnel matters and health and safety at work before taking decisions in these areas. Consultation means giving the works council information at least 30 days beforehand and having a consultative meeting with the works council at least 15 days before the employer takes the decision concerned. The aim of the consultation is to reach a compromise. The form varies from joint meetings to online comments and written exchange of views.

(c) Is information usually provided on a confidential basis to the I&C body before management decisions are taken and announced? Are there examples of I&C not taking place due to confidentiality considerations?

The provisions relating to the confidential nature of certain information have not been transposed directly in Slovenia. It leaves a lot of space for restricting the access of employee representatives to certain information. The level of protection of information depends mainly on the attitude of management as the LCA and Employment Act clearly define the obligation to respect business secrets. In some companies it is a constant practice to avoid EC meetings due to issues of confidentiality.

(d) Please outline what guarantees and protections employee representatives usually have, e.g. time off work, training, material and financial resources, facilities, protection against dismissal/ discrimination, access to workers.

The company must allot five hours of paid time off per month to EC members for participating in employee councils, three hours of paid time off a month for consultations with workers; and 40 hours of paid time off a year for training sessions which are necessary for the efficient operation of the council. A participative agreement between management and the council may increase these quota of time off.

(e) Can employee representatives seek external advice on how to handle difficult topics for consultation (e.g. from trade unions, external consultants)? In the case of the latter, who pays?

The employee' council may invite experts from inside or outside the company, management personnel, representatives of representative trade unions (SI0210102F) and representatives of employers' associations. Members of ZSDS (based on the annual membership) have free support including some specific quota of legal issues.

In many cases the expenses of legal services are covered on grounds of participative agreements.

Question 6: Practical outcomes of consultation

(a) What evidence is there, if any, of the consultation process resulting in the modification of management decisions and/or the process or timetable for their implementation? Please give an overview of the impact of consultation with examples.

The only available evidence are the reports of EC submitted to the supervisory board and to the ZSDS. There is a practise to publish the overview of activities of the EC’s president after his mandate is over. The reports are published in Economic democracy monthly. The ZSDS have also prepared guidelines and a questionnaire for self-assessment. Together with the association of supervisory boards of Slovenia they have established a working group for creating standards of reporting. The purpose is to increase cooperation and organization on the topic of workers' representation.

ECs consider the veto right as their most powerful tool. The EC has the right to delay the employer's decisions and, at the same time. to institute dispute-resolution proceedings, if the employer did not inform and consult the employees' council in advance before adopting the final decision. In these cases, the employer is not allowed to implement the decision until the final decision is taken by the competent dispute-resolution body. According to EC representatives sometimes it is the only tool to start the consultation procedures.

(b) How many complaints per year concerning the operation of I&C procedures (e.g. employers not consulting in circumstances where consultation is obligatory) have been lodged with administrative or judicial authorities since 2005? Who were the claimants and what were the key issues? What proportion of these applications were upheld? What sanctions were imposed?

The only evidence are complaints to the Work Inspectorate (administrative authority), the authority which is also competent for violations of I&C rights. Some complaints were lodged by workers, and on average there are 4 cases per year.

A judicial procedure is also foreseen at the Labour and Social Courts, but there are no detailed statistics about the number of cases related to violations of I&C rights. According to the social partners there are very few cases in practice, mostly because of a long and ineffective procedure. Sanctions are also insignificant and ineffective in practice.

Question 7: Relationship between I&C bodies and other forms of employee voice

(a) Can, and if so do, trade unions play a part in the establishment of I&C bodies and in their operation? Do external trade union officers often sit on I&C bodies? How common is it for I&C bodies to include both union and non-union employee representatives?

Trade unions are playing an important role in establishing ECs as a main driving force to strengthen employees’ voice in companies. Each representative trade union in the company has the right to nominate candidates for the EC. Candidates must fulfil the requirement of having been employed in the company for at least 12 months on a permanent basis. This excludes the possibility of external union officers to be members of EC.

(b) Is there any overlap between the remit of I&C bodies and trade union-based collective bargaining? If so, how are such issues resolved?

In most companies EC and trade unions cooperate well in order to achieve results which are satisfactory to all employees.

However Article 2 of the LCA states that collective agreements are concluded by trade unions or associations of trade unions as a party on workers’ side and employers or associations of employers as a party on the side of management. The ECs are not mentioned as workers representatives so they are– by law – not the parties to CB. The EA in several Articles (especially 8) also indirectly excludes the EC as a party of CB and favours trade unions. The ZSDS requested the Constitutional Court to decide whether the above mentioned practice is in line with Constitution. The Decision no. U-I-284/06-26 (2009) states that 'In the cases there is no trade union in the company the principle of equality before the law must be ensured. The employees must have the possibility to participate through other workers' representatives in the procedure of adopting the employer's general act by which rights, that are otherwise the subject of the regulation of company collective agreement, are agreed on. The representatives must be selected for such role in a special procedure determined by law.

According to the Decision the third paragraph of Article 8 of the EA is inconsistent with the principle of equality guaranteed by the Constitution, as it places employees employed by employers in companies in which trade unions are not organised in a less favourable position than employees in companies with trade unions without providing a sound reason for such differentiation.

(c) Is the consultation required by the collective redundancies/transfer of undertakings Directives carried out via I&C bodies, trade unions or other employee representatives?

When participative management is on a high level usually all partners are consulted on planned actions. In practice usually both parties are involved.

Article 93 of the WPMA requires to consult the EC about the company status (e.g. changes in the legal situation, the sale of the company or of a major part of it; the closure of the company or of a major part of it; and major changes in ownership) and the personnel issues (e.g. the need for new workers (number and profiles, the transfer of a large number of workers (10% or more of all company employees) outside the company or within the company workforce reductions).

On the other hand trade unions have a general right to “provide and protect the rights and interests of trade union members with the employer” (EA).

(d) Is the use of direct forms of employee involvement by management through such things as team briefings seen as complementary to or in competition with the I&C body?

No, not really. They are seen as integral part of work processes.

Question 8: Views of the social partners

(a) What are the attitudes of the main employer and trade union organisations in your country towards (i) the value or necessity of I&C bodies and (ii) the operation of I&C bodies in practice, especially in a recession?

Both, trade unions and employer organization see the EC as a powerful tool, especially in the time of crisis when much more consultation and information is needed. Common decision taking and involvement of employees in the decision making is seen as profitable.

(b) Have the social partners, jointly or separately, conducted any review of the operation of the national regulatory framework governing I&C? What is their assessment of its effectiveness? Is there any pressure from the social partners for reform?

No, however some partners are stressing the need for it. The trade unions are more in favour of increasing the rights and extending the right of establishing an EC regardless of r the size of the company. The employer organization states, that the current law is somewhat obsolete; rooted in the times of former Yugoslavia and its unique workers self-management, and as such grants too extensive rights.

Commentary by national correspondents

The implementation of the Directive has not had substantially changed the level of workers participation in Slovenia as it was considered that the rights of employees to information and consultation were already well guaranteed in Slovenia. However, the dynamics between social partners and a growing awareness of the importance of participative management empowered the EC to participate more actively and to treat the company level as an important and influential platform of social dialogue. The new paradigm of economic democracy is becoming more appealing.

Bogumila Plachtej, Science, Centre for Organisational and Human Resources Research

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