The development and current situation of employers’ organisations

Bulgaria currently has four employers' organisations recognised as being representative at national level, as well as a number of others which do not have this status. The structure of employers' representation has undergone change during the country's period of transition, owing to factors such as the liquidation or privatisation of state-owned enterprises and the emergence of new companies. This article examines the development of employers' organisations and their current situation in 2003..

In established Bulgarian practice, the national 'peak' employers' organisations are those regarded as 'representative' on the basis of criteria laid down by the Labour Code. These organisations must have:

  • at least 500 member companies, each with at least 20 employees;
  • affiliated organisations with at least 10 member companies in more than one-fifth of the branches of the national economy;
  • local bodies in more than one-fifth of the country's 263 municipalities;
  • a national managing body; and
  • the status of a legal entity and be registered as a non-profit organisation.

Based on these criteria, as at October 2003 four employers’ organisations (BG0307204F) are recognised as representative:

  • the Bulgarian Chamber of Commerce and Industry (BCCI). Established in 1884, after 1992 BCCI became a voluntary organisation for the support, encouragement, representation and protection of the economic interests of its members, which are in both the public and private sectors. It has 42,888 members and 70 sectoral organisations. It is a member of the International Chamber of Commerce (ICC), Eurochambres, the Association of the Balkan Chambers of Commerce, the Association of the Black Sea Zone Chambers of Commerce and Industry, the Black Sea Economic Cooperation (BSEC) Business Council, the International Council on Cooperation of the Chambers of Commerce and Industry and Economic Chambers of CIS Countries, Baltic, Eastern and Central Europe Countries, the Central European Free Trade Association (CEFTA), and the Southeast European Cooperative Initiative (SECI);
  • the Bulgarian Industrial Association (BIA). BIA is a successor of the Bulgarian Industrial Chamber, established in 1980. Its membership is made up of more than 14,000 industrial, trade and service companies from the private, public, cooperative and municipal sectors, as well as banks, universities, economic and scientific bodies, insurance and leasing companies, pension and health insurance funds and other organisations and establishments. BIA incorporates 27 regional organisations, corresponding to the administrative divisions of Bulgaria, and 58 branch/sector organisations (known as 'chambers') representing all sectors of the Bulgarian economy. BIA is a member of the Union of Industrial and Employers’ Confederations of Europe (UNICE), ICC, the International Organisation of Employers (IOE) and the World Environment Center (WEC);
  • the Union for Private Economic Enterprise (UPEE) - before 2001 called the Union for Economic Enterprise of Citizens. UPEE was established in 1989 as an organisation protecting the freedom of enterprises and private entrepreneurs. It has almost 4,000 member companies and 50 regional and branch offices. In 1996, it was recognised as a member of IOE through the Association of the Organisations of Bulgarian Employers. Since 1993, UPEE has been a member of the European Council for Small Business (ECSB), and since 1994 a member of the International Council for Small Business (ICSB); and
  • the Union of Private Bulgarian Entrepreneurs Vazrazhdane (UPBE). UPBE was established in December 1989. It has local (based on municipalities) and sector/branch organisations and is a member of the World Association for Small and Middle Enterprises (WASME) and the European Confederation of Associations of Small and Medium-sized Enterprises (CEA-PME).

Over July-November 2003, a process has been underway - known as the 'census of employers’ organisations'- to verify the extent to which the various organisations meet the representativeness criteria.

Restructuring processes

Bulgaria's process of economic and political transition began in 1989. In the light of the existing political and economic situation, the two main employers’ organisations which existed at this early stage - BCCI and BIA - organised only state-owned and cooperative enterprises. After the beginning of the period of change, many of the newly emerging private enterprises sought other spokesperson for their interests and initiated the establishment of UPEE and UPBE. After the privatisation of nearly 70% of state-owned enterprises, in many cases the new management decided to retain membership of BCCI and BIA, which thus also started to represent the interests of private businesses. However, a large number of privatised enterprises established new employers’ organisations, which are not yet recognised as having representative status. Most of the enterprises bought through privatisation or established by foreign investors have established their own employers’ organisation, the Bulgarian Industrial Business Association (BIBA). Finally, several dozen of the largest Bulgarian private enterprises have established a new organisation, the Employers Association of Bulgaria (EAB).

Three dynamics have driven all the organisational restructuring processes of employers’ organisations since 1990: the liquidation of loss-making state-owned enterprises; the emergence of new enterprises; and the privatisation of state-owned enterprises. The combination of these processes has led to a significant increase in the number of economic entities in Bulgaria. The statistical data show that more than 95% of all Bulgarian enterprises have a workforce of fewer than 10 employees. It is mostly larger enterprises and those aiming for sustainable development of their business that seek protection of their interests through joining existing employers' organisations or establishing new ones

Tasks and responsibilities

Since the beginning of the transition period, the newly formed employers’ organisations and those which were re-established have been active participants in the implementation of reforms, in crucial areas such as:

  • creating the conditions for a modern and flexible labour market;
  • industrial relations, including labour legislation;
  • incomes policy;
  • creating new instruments related to collective bargaining; and
  • mandatory and voluntary pension insurance (BG0308101F).

In the complex and constantly changing context of the years since the transformation process began, employers’ organisations have maintained the position that the following issues should be taken into account in the process of developing social dialogue and tripartite cooperation:

  • the transformation of the state-owned sector into a private one;
  • enhanced freedom for trading and industrial activities;
  • a change in the economy's guiding principle from centralised planning towards a market with free competition;
  • a change in the principles of management of the economy as a whole and of enterprises in particular; and
  • a basic change in the labour law framework and in labour market institutions, and a move from total employment to acceptance of some unemployment.

The representative national employers' organisations participate in the main body for national-level social partnership, the National Council for Tripartite Partnership (NCTP), established in 1993. The NCTP is a forum for cooperation and consultation over labour, social security and living standards issues. Employers' organisations are also involved in the management and monitoring of numerous institutions with a tripartite structure. Sectoral employers' organisation may engage in collective bargaining at branch/sector level.

Commentary

The economic and political changes which began at the beginning of the 1990s created opportunities for genuinely autonomous employers’ organisations to become real spokespersons for business interests in matters related to the labour market and industrial relations. During the transition period, there has been a clear trend for employers’ organisations to develop expertise and for their management bodies to adopt positions which are independent from those of the government. The main driving force behind this process has been pressure on the organisations’ management bodies by new members, which are mainly newly established enterprises.

An evaluation of the participation of employers’ organisations in the activities of various social dialogue institutions and mechanisms at various stages over the last 13 years, leads to the conclusion that the implementation of economic and social reforms is directly related to the development of social partnership and the strengthening of the autonomy and capacity of employers’ organisations. As a rule, those governments which have had the will to carry out reforms and seek public support for them, have also contributed to the development of social dialogue. Conversely, in the periods of 'halt' or restriction of social partnership institutions and mechanisms, reforms either failed or did not start at all – for example in 1992, 1994 and 1996. (Elina Skarby, Balkan Institute for Labour and Social Policy)

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