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First union deal under new law signed

SOME bus drivers will see their wages rise €20 per month as the first collective bargaining agreement under a controversial new law was agreed to earlier this month.

Prices shrank in transport.(Source: Sme)

SOME bus drivers will see their wages rise €20 per month as the first collective bargaining agreement under a controversial new law was agreed to earlier this month.

The deal may bring the first application of legislation that allows collectively bargained contracts to be extended to include companies that did not actually sign on to such agreements with unions. The law extends the binding nature of higher-level collective agreements to any firm employing more than 20 people in a given sector, in this case bus transport. The OZ KOVO trade union group and the Association of Bus Transport (ZAD) signed the deal on February 17 and it may be extended to workers who are not members of OZ KOVO.

The trade unions say it is only the first step and that they want to negotiate the new higher-level collective agreements in other sectors. Critics contend that the higher wages will have a negative effect on private firms. The new law is being challenged by a group of opposition MPs in the Constitutional Court, and it had originally been vetoed by President Ivan Gašparovič before parliament overrode that veto.

New contract terms

“This is a compromise,” said Emil Machyna, the head of OZ KOVO, as quoted by the SITA newswire, after signing the agreement in the segment of public road transport for 2014 and 2015.

Based on the new contract bus companies would increase the tariff wages of their employees by 2.7 percent and real wages in case of inflation by an additional 0.5 percent, SITA wrote. This means that the salaries in some firms will increase by roughly €20 in every tariff level.
Though it is not what they had originally wanted, Machyna believes that “we will also come to a systemic solution so that we do not need to negotiate like this every year, and in order that those people feel they are needed and that their wages are increasing”. Trade unions originally requested a 3.5-percent increase of the wage tariff and a 1-percent increase in real wages, meaning that the increase would have been about €29 per month.

According to Machyna, the new conditions in the collective agreement would affect about 10,000 employees of the bus transport sector or all bus companies securing public transport with more than 20 employees.

George Trabelssie, the president of ZAD, said that the agreed upon wages will not result in a hike in fares or the cancellation of lines because wage costs make up only one-fifth of all bus companies’ costs. He sees the 2.7-percent hike as acceptable because it is in line with his association’s philosophy to systematically erase regional differences, as reported by SITA.

“Ten years ago during privatisation [of bus companies] we inherited large wage differences between the east and the west,” said Trabelssie. “The bus costs the same, the repair costs the same, but wages, human work, is valued much less in the east that in the west. This is why we agreed with the increase of the tariff wages by a higher percentage than in the case of the real one.”

The negotiations over the new higher-level agreement lasted more than three months while about 200 trade unionists went to Žilina, where the fourth round of negotiations took place on February 17.

Peter Goliaš of the Institute for Economic and Social Reforms (INEKO) says that the higher salaries will bring increased costs.

“If the firms operate in a competitive environment, they do not have a lot of room for decreasing their own margins,” Goliaš said in a statement provided to The Slovak Spectator. Therefore, he added, they will try either to increase prices, to decrease spending (for example through dismissing some employees) or combine both possibilities.

Trade unions want to extend the agreement over the whole sector and thus the new higher-level collective agreement may cause problems to companies that are not members of the ZAD and which do not operate subsidised lines. In Slovakia, lines up to 100 kilometres contracted by regional self-governing unions (VÚCs) account for the bigger portion of bus transport. VÚCs cover the losses of these bus companies.

Ministry consent

According to the new rules, only small firms, defined as having 20 employees or less, and firms for which 10 percent of their workforce is composed of disabled people, are exempt from the extension. Businesses affected by an exceptional event, in liquidation or bankruptcy, as well as firms doing business for less than 24 months, are exempt from the new rules. According to the Labour Ministry, more than 80 percent of companies in Slovakia employ fewer than 20 people.

Previously, employers had to agree to the collectively bargained higher level agreement for it to be applied.

The Labour Ministry will decide on the extension of a higher-level collective agreement based on a request from any party which has signed the particular higher-level collective agreement. The Labour Ministry will set up a so-called tripartite commission, composed of representatives from unions, employers and the government, which will assess proposals for the extension of collective agreements as well as objections against them. Its stance will not be binding and in the end the Labour Ministry itself will decide about the extension of a higher-level collective agreement.

Currently there are 22 higher-level collective agreements in force. The number will, however, change as some of the agreements will expire on March 31, Veronika Husárová from the press department of the Labour Ministry told The Slovak Spectator.

More negotiation on tap

In addition to bus transport, trade unions are discussing new higher-level collective agreements in the electrotechnical, metallurgical and mining and engineering sectors.

OZ KOVO and the Independent Christian Trade Unions in Slovakia are both active in metallurgy, with separate unions representing employees of mines, geology and the oil industry. While the former will affect 12 metallurgy organisations with more than 12,800 employees, the latter will affect eight member organisations with nearly 5,900 employees, Ervín Kubran, general secretary of the Association of Metallurgy, Mining Industry and Geology in Slovakia, told The Slovak Spectator.

Both agreements are expected to be signed in March or April, Kubran said.

The higher-level collective agreement with engineering industry is valid till the end of the year, but the representatives of employers and trade unions are nonetheless already holding talks, Juraj Borgula, vice-president and chief negotiator of the Association of Engineering Industry in Slovakia said. The trade unionists propose increasing the salaries by 6 percent, he said.

Amendment criticised

Despite the strong relations between the ruling Smer party and the trade unions, the parliament struggled to have the amendment adopted. Though it sailed through parliament in October 2013, Gašparovič vetoed it on November 18. He said that the measure runs counter to the principle of collective bargaining at the level of individual companies and disregards EU recommendations that the size of a small company should be set at those with up to 50 employees. He also suggested that the extension of high-level collective agreements should not apply to employers who have already concluded a company-level collective agreement.

By vetoing the law, the president met the objections put forth by the American Chamber of Commerce in Slovakia (AmCham), the National Union of Employers (RÚZ), the Slovak Chamber of Commerce and Industry, the Federation of Employers’ Associations (AZZZ) and the German-Slovak Chamber of Commerce (SNOPK), among others. They argue the law contradicts the constitution, weakens competitiveness and will lead to layoffs.

The Smer-dominated parliament however overrode the veto on November 27, without accepting any of the president’s changes. In response to this, the parties sheltered by the People’s Platform, the Slovak Democratic and Christian Union (SDKÚ), the Christian Democratic Movement (KDH) and Most-Híd, submitted the law to the Constitutional Court on December 5.

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