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US businesses call on president to stop collective bargaining law

THE AMERICAN Chamber of Commerce in Slovakia (AmCham) has expressed concerns about the amendment to the law on collective bargaining that parliament passed at the end of October, and which strengthens the position of labour unions.

THE AMERICAN Chamber of Commerce in Slovakia (AmCham) has expressed concerns about the amendment to the law on collective bargaining that parliament passed at the end of October, and which strengthens the position of labour unions.

“We believe it violates one of the basic principles of the rule of law, that is the principle of freedom in agreements,” AmCham representatives wrote in an open letter to Slovakia’s President Ivan Gašparovič, who can now either sign the law or return it to parliament and suggest changes. AmCham, representing over 330 companies, sees the new law as having a potentially negative impact on Slovakia’s employment rate and its overall competitiveness in Europe.

The law, authored by the Labour Ministry, automatically extends the binding nature of higher level collective agreements to additional firms employing more than 20 people in a given sector without the consent of the individual firms. Prior to the amendment, the employers’ agreement was necessary in order to apply collectively bargained agreements to the given enterprise.

A so-called tripartite commission, composed of representatives from unions, employers and the state and set up by the Labour Ministry, will have the final say on proposals for the extension of collective agreements as well as objections from employers. Ministry and Statistics Office officials will represent the state, according to the SITA newswire.

Firms with fewer than 20 employees or where the number of physically disabled employees reaches 10 percent will be exempt, just as firms which are affected by extraordinary developments, or are in bankruptcy proceedings, or which have been in business for less than 24 months.

AmCham argues that there is an increasing number of businesses in Slovakia which operate in non-traditional ways, mainly companies working in the IT sector, which is organised differently than the traditional industrial sectors, the letter reads.

“The amendment does not consider the representativeness of the labour unions according to the number of employees, let alone the fact that labour unions bear no business risks, do not invest their own capital, and no effective experience with company management is required from them,” the AmCham letter reads.

The extension of collective agreements without the consent of the employers, which results in the fact that duties that stem from collective agreements can be imposed on the company without its consent, is “unacceptable, since it will lead to additional financial burden for companies operating in Slovakia and will have a negative impact on the competitiveness of Slovak companies”, the letter reads.

Businesses also consider the amendment not to be in line with the Constitution.

Source: AmCham

Compiled by Michaela Terenzani from press reports
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