Czech Republic: Industrial relations in central public administration – Recent trends and features

  • Observatory: EurWORK
  • Topic:
  • Collective bargaining,
  • Participation at work,
  • Pay and income,
  • Working conditions,
  • Industrial relations,
  • Published on: 29 June 2014



About
Country:
Czechia
Author:
Soňa Veverková
Institution:

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.

Czech Republic ranks in international comparison among those countries which do not have an over-full bureaucratic system. In comparison to other EU countries, Czech Republic has relatively the fifth lowest number of officials in the total population and also the salaries of officials are below average compared with other countries. The problem of the Czech central public administration thus consists mainly in its politicisation and inefficiency. Previous attempts to reform the system, however, failed to address the deficiencies. In addition, Czech Republic still lacks a Service Act, which envisages the introduction of a new systematisation and rewarding policies in the central public administration.

1. CPA definition and restructuring

A definition of Central Public Administration (CPA) is: “Central government departments or ministries, which carry out planning, management and coordination functions, rather than public-service delivery functions.”

1.1 What, in the definition set out above, does not fit in your country experience?

In the Czech Republic, central state administration comprises 14 departmental ministries and further 12 central administrative offices and administrative offices that are not subordinated to any administrative body. We use the term “administrative office” to mean, besides ministries, other bodies of state administration that are not explicitly designated thus by special legal acts, including the Office of the Czech Republic Government (Úřad vlády České republiky, ÚV ČR), Czech Telecommunications Office (Český telekomunikační úřad, ČTÚ), Czech Statistical Office (Český statistický úřad, ČSÚ) et al. The exercise of this state administration is fully funded out of the state budget. By law (and from the point of view of statistical reporting) and further institutions (organisational components of the state) rank as administrative offices – these include the Office of the Ombudsman (Kancelář veřejného ochránce práv), Constitutional Court (Ústavní soud), the Academy of Sciences of the Czech Republic (Akademie věd České republiky, AV ČR) et al.

1.2 What were the main structural reforms to CPA in the last 10 years (for example downsizing, devolution to state or local government, privatization, deconcentration)? Briefly describe each one of them.

The main structural reform was realized in 2000. Regionalisation (deconcentration) of the Czech political system is anchored in article 99 of Czech Constitution, which defines constitutional basis for municipalities and higher territorial administrative units (or higher territorial self-governing units). Act 347/1997, Constitutional act on the creation of higher territorial self-governing Units sets 14 regions operating since 1 January 2000. Regions and municipalities are directly established and regulated by Act 128/2000, Municipal Act and Act 129/2000, Regions Act. From the territorial point of view, regions essentially respect all regional centres of medium importance.

Low efficiency of Czech public sector is confirmed by international rankings (Chvalkovská, 2013). One of the structural problems is that there is neither complex overview, what exactly public administration does, nor any sophisticated conception what it should do. Individual agendas are often being implemented unsystematically and are influenced by changing political priorities and competition for power among different institutions.

As even the Czech Government is not fully sure what it runs, it ordered to create a comprehensive analysis of public services. So far, only ‘Responsibilities analysis’ pilot project has been conducted by Ministry of the Interior of the Czech Republic (Ministerstvo vnitra České republiky, MV ČR) and was taken into consideration by the Government in December 2011. The ‘Concept of Completion of the Reform of Public Administration’ should be finished by January 2014.

Increased effectiveness of governance is inevitably connected with strengthening of computerization of state authorities’ processes and activities. During 1990s and 2000s various governments proposed different strategic documents supporting computerization, however it was not until 2006 the process was finally started, as the center-right government of Prime Minister Mirek Topolánek (Civic democratic Party, Občanská demokratická strana, ODS) prioritized this issue high on its agenda and placed a full political support behind it. Presently, the e-Government concept builds on following pillars:

▪ Creating universal points of contact CzechPOINT (a place where a citizen can access different registries and sort out many administrative issues regardless of the place where he/she is).

▪ Creation of communication infrastructure of public administration intermediating data circulation.

▪ Enabling electronic communication through data boxes.

▪ Creating basic public administration registers (register of territorial identification, addresses and real estate; citizens register; register of persons; register of rights and obligations).

Nevertheless, possible dark sides of planned projects such as a vast space for corruption, lack of coordination or overreliance on partial steps have been identified and warned against.

2. Austerity measures since 2008

2.1 Since 2008, were new pay and working hours policies negotiated by the social partners or unilaterally imposed (through, for example, a new law and/or a financial bailout package)?

The current austerity measures have included in particular reduction in wages for public sector employees. In its policy statement of 4 August 2010, Prime Minister Petr Nečas (Civic Democratic Party, Občanská demokratická strana, ODS) declares reduction of wages in organizational units of state and contributory organizations by at least 10% (with the exception of teachers) in 2011, while stating that this decision does not automatically mean a decrease in wages – the government passes on the responsibility of individual ministers, whether these savings are to be realized through reducing wages, layoffs, or its combination. Over the next three years, the volume of wage funds should not increase. The decision aroused indignation of trade unions, despite the fact that, according to STEM (Středisko empirických výzkumů) opinion poll, 61% of Czech citizens had agreed to this measure. Trade Union of State Bodies and Organisations (Odborový svaz státních orgánů a organizací, OSSOO) called demonstration for 21 September 2010 (CZ1009019I), supported by other trade unions, mostly members of Czech-Moravian Confederation of Trade Unions (Českomoravská konfederace odborových svazů, ČMKOS). The demonstration, however, did not change the government´s decision, and a further protest strike was declared on 18 December 2010 (CZ1101029I). The action was supported by other trade unions, as well as by international trade union organizations (European Trade Union Confederation, ETUC, European Federation of Public Service Unions, EPSU). The strike was associated with protests against the upcoming changes in the health care system (sharp increase in patient co-payments, setting up a system of paid medical procedures), significant reduction in the social system, scheduled measures in the pension system etc. However, the government did not back down. The proposal passed in the remuneration system – the tariff component in salaries of civil servants can be determined without taking into account the experience acquired (it applies to all employees in central public administration and healthcare, except teachers) and the introduction of contractual salaries, which can be arranged for employees included in the 13th and higher salary grade (out of a total of 16 salary grades).

All the above mentioned measures were imposed.

2.2 What were the key agreements or laws through which the changes were negotiated or imposed?

Government Order 381/2010 of 7 December 2010.

2.3 Were these changes in line with analogous reform processes in the public sector in general and in the private sector? Please discuss the similarities and differences.

It is difficult to evaluate because the pay systems in the private (business) and the public sector are completely different. Owing to the ongoing economic downturn, the growth in unemployment, the government´s efforts to reform public finance (especially cuts on the expenditure side of the state budget) and the overall public opinion, these measures can be considered justified and analogous to the private sector conditions, where the social partners have often agreed at least on a wage freeze. Without further reforms of the public sector (in general, and so in the central public administration), it is supposed to be only a single action without a long-term effect.

2.4 In case there were processes of restructuring in CPA, were these negotiated or imposed?

Imposed.

2.5 What types of reforms/changes have taken place since 2008 concerning:

  • Pension cuts
  • Changes in retirement age entitlement

The following reforms have taken place not just in public sector, but even in private sector. Based on the ruling of the Constitutional Court of the Czech Republic (Ústavní soud Èeské republiky, ÚS ÈR) of 2010, the basic pension insurance was changed in 2011 (the ‘small pension reform’). The legal regulation consisted in strengthening the merit based principle to the detriment of the solidarity principle. In addition, parametric changes were made to secure higher stability of the system. Particularly, it included a prolongation of the period in which income relevant for the pension calculation is generated; a continued raising the retirement age and an accelerated unification of retirement age for men and women, as well as elimination of difference in women’s retirement age depending on the number of children raised by them. Additionally, pension indexation has been tightened and stricter are also the rules for granting the early retirement pension. Since 1 Januay 2013 the second pillar of the pension system has been launched and at the same time significant changes have been made to the third pillar, the so-called ‘big pension reform’. Clients’ assets were newly separated from the fund shareholders’ assets.

Funds got more opportunities on how to invest money of their clients who can choose from several investment strategies depending on the risk of investments, but unlike in the previous period of time (1994–2012), when no negative return was guaranteed, they share the choice related risks.

A novelty is the establishment of ‘pre-retirement’. An employer can contribute to the third pillar for the employee who can thus retire earlier and receive a ‘pre-retirement pension’ paid from the complementary pension insurance under the third pillar until reaching the legal retirement age, without any sanction due to early retirement. To utilise the pre-retirement option is possible 5 years before this legal retirement age at earliest and provided the amount of money saved is sufficient to cover the benefit paid from the third pillar during the entire pre-retirement time to the pre-retired person in the amount of 30% of average for each month of pre-retirement). The employer’s contribution up to a certain amount brings a tax advantage for the employer (CZ1304039Q).

3. Industrial relations reforms

3.1 Are there formal industrial relations processes in the CPA, such as collective bargaining between trade union and management representatives or information and consultation via works councils? Do these apply equally to employees with diverging employment status (such as civil servants and others)?

Collective bargaining in the public sector (including central state administration) designed to lead to a collective agreement takes place only at company level, with the scale of bargaining considerably restricted, including by comparison with the private sector. It generally applies that wages and other labour entitlements can be regulated in collective agreements solely within the framework set by the labour legislation; moreover, for collective bargaining in the public sector it is prescribed that the only employee labour entitlements that may be so regulated (increased or broadened) are those that the law directly specifies. As far as working conditions are concerned (especially the rules on working hours, leave, remuneration, occupational safety and health, and the areas enquired about below), the actual substance of public sector collective agreements is determined by the relevant provisions of the universal legislation.

Currently, civil servants could be divided into two groups. Duties of regional officials are specified by a special regime of Act 312/2002 on Territorial Self-governing Officials. However, duties of state officials (e. g. officials in the central public sector) are defined only by Labour Code. This to large extent influences the human resources management of the civil service. Service Act which should have changed the situation was approved by the Parliament as Act n. 218/2002 Coll., however its coming into force has been postponed several times. Legal limbo allows politicians in charge of ministries and state agencies to organize human resources more or less at their will. Moreover, institutional memory is threatened every time the political representation changes, as leading civil servants could be exchanged immediately.

Works councils (although regulated by Labour Code) are not common in the Czech Republic. We are not aware of any work council in CPA.

3.2 Has there been a change since 2008 in the structure of collective bargaining, such as a breakup of centralized bargaining arrangements (decentralization), the creation of sector-specific arrangements within CPA (sectoralization), or the convergence of CPA industrial relations arrangements on the private sector or broader public sector? If not, did this change occur earlier?

No. There has been no changes in the structure or system of collective bargaining in public sector in general (including central public administration) since 2008.

3.3 Is there a collective agreement in place for CPA? If yes, which were the main topics discussed or negotiated since 2008?

Collective bargaining in public sector takes place only at company level; there is no partner on the employer side for higher-level collective bargaining, and that also applies to central public administration. The existing legislation provides only very limited room for collective bargaining on pay and pay demands in the central public administration (as in public sector in general). This means, that collective agreements can e. g. only increase the minimum pay tariffs regulated by law. Other topics usually negotiated in the collective agreements in the public sector are the following: conditions for the work of trade union organisations, rules of mutual cooperation between contracting partners, social care for employees, including setting a level of finances available for defined purposes in the social area, employee training, occupational health and safety etc.

3.4 For those topics not covered by collective bargaining agreements, how are they determined?

The universally binding legislation on labour relations and working conditions applies universally in central public administration. By government order the Labour Code and act on pay is followed up by special pay rules (a scale of pay tariffs and how they are determined, extra pay and the terms of its provision, conditions for providing rewards), common for the entire public sector, which also define specific conditions for the remuneration of employees of various components of central public administration.

4. Social Partners

4.1 From the list of social partners set out in Annex 1 for your country, have there been any changes since 2010?

Please tick which ones are no longer involved and please list any new ones.

Czech Republic

Country

Trade unions (2010)

Trade unions – no longer involved (please tick)

Employers organisations

Czech Republic

Trade Union of State Bodies and Organisations (STATORG)

 

None

Czech Firefighters’ Union (OSH)

Not involved in central public administration sector.

Independent Trade Union of Police Corps in the Czech Republic (NOS PČR)

Not involved in central public administration sector.

Czech–Moravian Trade Union of Civilian Employees of the Army (ČMOSA)

Not involved in central public administration sector.

Independent Trade Union of the Czech Ministry of Defence

? Information not available.

4.2 Is there competition among trade unions or employer representatives?

No. There is only one trade union organisation in the sector.

4.3 Since 2008, have there been any mergers or de-mergers of trade unions or employers’ organisations?

No.

4.4 Have trade unions taken any specific responses to austerity policies, such as industrial action, coalitions with trade unions form other sectors, civil society, cross-border trade union alliances, intensified cooperation with management? If yes, please give details.

Yes, in 2010 (two industrial actions, CZ1009019I and CZ1101029I) as a reaction on government decision to cut wages in the public sector. However, these actions were not succesful.

4.5 Have employers’ organisations taken any specific responses to austerity policies, such as, coalitions with trade unions, coordination with employers in other sectors or countries, EU social dialogue committee? If yes, please give details.

No. There is no employers´organisations in the sector. The partners for trade unions are particular bodies of the public central administration (ministries, Police of the CR, etc.).

4.6 What are the views of the social partners vis-à-vis the impact of austerity measures on the industrial relations in CPA? What, in their opinion, will be the most important issues for the sectors’ industrial relations in the near future?

Trade union´s (OSSOO) responses to austerity measure included two industrial actions which, however, did not reverse the government decision. According to trade union, these measures are unfair and decrease employees´ loyalty.

5. Commentary

There have been almost no changes in the system of social dialogue and collective bargaining in the public sector since 2008. The only and more visible indrustrial actions were organized by trade unions in 2010 as a reaction on government decision to cut wages in the public sector. Now, the main topic in this area is an adoption of a Service Act, which is considered to be necessary for an effective central public administration.

Soňa Veverková, Research Institute for Labour and Social Affairs

References:

Useful? Interesting? Tell us what you think. Hide comments

Add new comment