Slovakia: Latest developments in working life Q2 2019
The introduction of a four-day working week at US Steel Košice, higher wage supplements and changes to the constitution to limit the retirement age and protect the minimum wage are the main topics of interest in this article. This country update reports on the latest developments in working life in Slovakia in the second quarter of 2019.
US Steel Košice inaugurates four-day week
The European steel industry is currently experiencing a crisis, due to global overcapacity and the vast number of exports targeting the EU market. In response to this situation, the management of US Steel Košice (USSK) implemented economising measures in April 2019 and proposed reducing the working week from five to four days for the month of May. According to Juraj Varga, the president of the Metal Trade Union Association (OZ KOVO) Council at USSK, the management proposed to pay workers a 70% wage compensation for the fifth non-working day. The trade unions accepted the proposal, which was a better option for the 12,000 employees than potential redundancies.
Jan Baca, a spokesperson for USSK, confirmed that the four-day working model was implemented for all employees, including managers, from 1 to 31 May 2019. The measure represented a form of solidarity among the steel workers and was designed to minimise the negative impact of the steel market crisis on employees and their families. It also allowed the company to respond flexibly to the demands of its customers.
James Bruno, the president of USSK, suggested that the four-day working model might continue in June. However, this option was rejected by the trade unions. At the same time, the trade unions abandoned their demand to increase wage tariffs by €70 and, after nine collective bargaining rounds, accepted the €40 increase for all employees that was proposed by management.
On 14 June, the trade unions cancelled a strike alert they had issued and signed an agreement with the management of USSK. This agreement included an almost 5% wage increase from 1 May 2019 and a lump sum of €100 to be paid to all employees at Christmas.
Wage supplements higher than previous year
Amendments to the Labour Code (Act No. 63/2018 Coll.) came into practice on 1 May 2019, introducing higher wage supplements than in the previous year.
- Wage supplements for night work increased from 30% to 40% of the hourly rate of the minimum wage (from €0.90 to €1.20 per hour).
- For hazardous jobs, supplements increased from 35% to 50% of the hourly rate of the minimum wage.
- Supplements for working on Saturdays increased from 25% to 50% of the hourly rate of the minimum wage (from €0.75 to €1.50 per hour).
- Supplements for working on Sundays increased from 50% to 100% (from €1.50 to €2.99 per hour).
These increases apply to employees in both the public and private sectors (Act No. 553/2003 Coll.).
Evidence from the 2018 increase showed that the higher wage supplements had a different impact on the labour costs of employers in different sectors. According to Ján Richter, Minister of Labour, Social Affairs and Family, the ministry was aware of these differences and therefore decided to introduce the higher wage supplements in two stages: from 1 May 2018 and from 1 May 2019.
Constitution limits retirement age and protects minimum wage
In Q2 2019, the Slovak parliament approved amendments to the Constitution of the Slovak Republic that strengthened the role of the minimum wage and introduced limits to the retirement age. Members of Parliament from the Direction–Social Democracy (Smer-SD) party proposed the changes and the issues were also discussed in the public sphere.
For example, from July 2018 to March 2019, OZ KOVO organised a petition advocating the demarcation of the retirement age in Slovakia, and the government organised a conference on the subject in June 2018. Both proposals were welcomed by the trade unions affiliated with the Confederation of Trade Unions of the Slovak Republic (KOZ SR) at a meeting of the Economic and Social Council of the Slovak Republic on 5 November 2018, but the employer organisations had their reservations about both proposals.
From 1 July 2019, each employee has a constitutionally guaranteed right to remuneration for work of at least the value of the minimum wage, and to retire at the age of 64 years. The retirement age is 62 years and 6 months for women who raised three or more children, 63 years for women who raised two children and 63 years and 6 months for women who raised one child. The retirement age limit of 64 years for men and for women without any children will be effective from 2028.
- Slovakian parliament: Act No. 99/2019 Constitutional Act amending the Constitution of the Slovak Republic No. 460/1992
A four-day working week is expected to be implemented again at USSK in July. The service rent of police officers will increase from 1 July and the salary of young teachers will increase from 1 September. From 1 July, the subsistence minimum (which impacts the taxation and income of the working population) will also increase.