Agenda 2000 and the European social dimension - countdown to enlargement: The case of the Czech Republic

This feature reviews the content of the Commission's Agenda 2000 programme on EU enlargement, issued in July 1997, particularly in relation to its social dimension. It also looks at the impact of enlargement on the future of the European social dimension. Furthermore, this article contains the first in a series of reviews of the industrial relations systems of the Central and Eastern European Countries which have applied for accession to the European Union, discussing their potential to accommodate to existing structures in the Union. Here we focus on the Czech Republic.

On 16 July 1997, the European Commission published a document of some 200 pages entitled Agenda 2000: For a stronger and wider Europe, in which it outlines the Community's policies in respect of enlargement, their impact on the applicant countries and a summary and conclusions of the opinions of the Commission concerning the applications for membership presented by Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Poland, Rumania, Slovakia and Slovenia.

Agenda 2000

In 1993 at Copenhagen, the European Council decided that the countries of Central and Eastern Europe (CEEC s) which had signed association agreements with the European Union, should be allowed to become members of the Union if they so desired. Arrangements for enlargement were to take into account the Union's capacity to absorb new members and the applicant countries' ability to satisfy the economic and political conditions for accession.

The Essen European Council in December 1994 asked the Commission to submit its detailed analysis of the effects of enlargement in the context of the Union's current policies. Following the presentation of an interim report, the Madrid European Council requested that the Commission take its evaluation further, particularly with regard to agricultural and structural policies. The new document was produced in response to this request.

Agenda 2000 assesses the impact of enlargement on the Union and the countries which have applied for membership under the following headings:

  • the external dimension (eg in relation to a Common Foreign and Security Policy);
  • the overall economic impact;
  • structural policies (particularly in relations to the structural funds);
  • agriculture (particularly the adaptation of the Common Agricultural Policy);
  • internal market and Economic and Monetary Union;
  • horizontal policies (ie social policy, environment, consumers, science, research and development, information society, culture, education, training and youth);
  • sectoral policies (ie transport, energy, industry, telecommunications, small and medium-sized enterprises, audio-visual policies and fisheries); and
  • justice and home affairs.

The document devotes only 1.5 pages to the impact on Community social policy of enlargement to include the accession states.

The social dimension of enlargement

Social policy in the European Union covers a wide range of areas, including living and working conditions of workers, their health and safety, equal opportunities for men and women, social dialogue, human resources, employment, social protection and social exclusion. This is developed through a variety of measures ranging from European legislation to funding programmes.

Agenda 2000 acknowledges that the history and development of social policy in the accession countries have been very different from those of the current member states of the European Union. While such policies were highly developed in some areas under the previous regimes, much of this has been lost in the transition phase and many countries have not yet adapted their social policy measures to the conditions of the market economy. The Commission argues that the adoption of EU social policy measures by these countries will be affected by the large number of citizens having much lower standards of living than the EU average, the existence of acute social problems, the low efficiency of public administrations, and by still underdeveloped systems of industrial relations.

It is acknowledged that enlargement carries the risk that support for a broad social policy could become weaker and further development could be hampered, particularly where unanimity is required for decisions. At the same time, the Commission is keen to stress the importance of the exemplary character of the European social model for the development of social policy systems in the CEECs.

An area which considered to be potentially particularly problematic is that of the social dialogue and labour law. Adaptation in this area is seen to be hampered by the lack or low level of development of employer and employee organisations, and by the reluctance of certain governments to accept the autonomous role of social partners and trade unions in particular.

Below, we look at the situation in the Czech Republic, a review which constitutes the first in a series which will highlight the current industrial relations framework in the applicant states. It is hoped that this will contribute to an assessment of the impact of current EU measures in the social dimension on these potential new member states and the impact of accession on EU social policy. The section on the Czech Republic draws on "The transformation of trade unionism in the capitalist and democratic restructuring of the Czech Republic", Anna Pollert, European Journal of Industrial Relations, Vol 3, No. 2 (July 1997) and "Handbook of trade unions in Europe - The Czech Republic", Ivan Fisera, ETUI, Brussels (1996).

Industrial relations in the Czech Republic - the development of trade unions and employee representation

Historical background

The pre-Communist trade unions in Czechoslovakia were relatively fragmented but nevertheless strong. There was a strong tradition of legislative protection for certain vulnerable groups of workers and of social security provision. After the Second World War, the Revolutionary Trade Union Movement (Revolucni Odborove Hnuti) adopted a "democratic centralist" approach, increasing control by a small central organisation and removing autonomy from individual unions and actively discouraging workplace autonomy and democracy.

For 40 years, the Czechoslovak systems of labour relations were modelled on the Soviet system, in which trade unions were to concentrate on production rather than representation. Trade unions had little or no role in wage determination, as a national wage rate system was in place in which wages were distributed from a central wage fund via departmental managers.

A new structure emerges

In 1989, after the democratic revolution, the old unions were completely replaced by a new structure. The newly created Czech and Slovak Confederation of Trade Unions (CSKOS) consisted of 41 member unions organised on industrial lines. In addition, a 100,000-strong Confederation of Art and Culture (KUK), a Trade Union Association of Bohemia, Moravia and Slovakia and various autonomous unions for strategic groups of workers was created. However, despite the democratic election of a new leadership, the centralised structure and union personnel at certain levels remained in place. Membership, which had initially remained high at 80% of the active workforce, declined to 50.8% overall in 1991. After the split of Czechoslovakia into the Czech Republic and Slovakia in 1993, the Czech-Moravian Trade Union Chamber (CMKOS) became the leading trade union confederation in the Czech Republic.

A new industrial relations system was created which involved a three-level structure: a tripartite annual general agreement; industry bargaining; and workplace trade union representation. Trade unions are set up as free and independent bodies and there is a constitutional right to strike. Employers are, in principle, obliged to negotiate with all trade unions represented in the workplace and legislation covers procedures for bargaining, mediation, arbitration procedures and strikes and lockouts. The trade unions have legally determined consultation and co-determination rights. A number of employer organisations exist in the Czech Republic, with the Industry Federation of the Czech Republic being the largest. The Federation is a member of the Union of Industrial and Employers' Confederations of Europe (UNICE)

In the early 1990s, industrial relations and the dialogue between trade unions and the government was characterised by a high degree of quiescence which can partly be attributed to the situation of the Czech economy and the way in which the process of "marketisation" was implemented.

Czechoslovakia was one of the most prosperous economies in central and eastern Europe and privatisation was carried out with less upheaval than in other CEECs. Public support for the process was generated through the "voucher privatisation" programme which created the image of a public stakeholder system in the new capitalist structure. Particularly crucial was the fact that, in comparison with other CEECs, unemployment did not increase dramatically in the first years of free market reform and there was a perception among the public that their economic situation had in fact improved. Relatively low unemployment was maintained through wage regulation, which remained in place until July 1995. Active labour market policies and the expansion of employment in the service sector also served to keep unemployment at a low level.

However, by 1994, trade unions had become increasingly disenchanted with the neo-liberal policies of the Klaus Government and stepped up their activities. In 1994, the unions refused to sign the general agreement, as the Government refused to honour its commitment to extend industry-wide agreements to non-signatory enterprises. The unions were also opposed to government policies aimed at increasing labour market deregulation and as a result assumed a more campaigning role. This culminated in the national demonstrations in Prague's Town Square in March 1994 and 1995.

A hardening of positions became evident on both sides, as CMKOS elected a more radical leader and the Government grew increasingly keen to dismantle the tripartite structure. Between 1994 and 1996 the number of threatened and actual strike actions increased in the public sector, in particular as wage demands increased.

Company-level industrial relations

Workers have the right to one-third representation on company supervisory boards where there are over 200 employees. However, it has been argued that these institutions have very little power in reality and the general thrust is very much towards individualism - no doubt in reflection of the experience of enforced collectivisation. Recent studies have shown little resistance to individualised employment contracts and pay systems. In fact, union chairs interviewed as part of a recent survey expressed surprise at being asked if the union was involved in individual pay determination.

Commentary

The European Council at Copenhagen in 1993 stipulated that those countries wishing to join the Union had to meet the following conditions:

  • stability of institutions guaranteeing democracy, the rule of law, human rights and the respect for and protection of minorities;
  • the existence of a functioning market economy, as well as the ability to cope with competitive pressures and market forces within the Union; and
  • the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.

In its Agenda 2000 document, the Commission considers that the Czech Republic meets most of these criteria, and negotiations for accession should therefore be opened.

With regard to the country's industrial relations system, it appears that its legal basis is well developed and trade unions are allowed to operate independently and represent the interests of workers at the national, regional, sectoral and company level. CMKOS is an ordinary member of the International Confederation of Free Trade Unions, and since 1996 has been affiliated to the European Trade Union Confederation (ETUC). A number of the multinationals operating in the Czech Republic involve Czech workers in European Works Council arrangements (Siemens, Volkswagen and Continental, for example).

A learning process has therefore already begun which will familiarise the Czech trade unions with industrial relations practice in the European Union, as well as European legislation in the social sphere. Agenda 2000 gives priority to the compliance with health and safety legislation in the accession states and it remains unclear how soon all European legislation in the social area would apply to these countries. (Tina Weber, ECOTEC)

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