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Collective Bargaining

Around 30% of employees are covered by collective bargaining in Bulgaria. Bargaining takes place at both industry and company level (municipal level for municipal employees) but company-level bargaining has become more important.

The framework

Legislation provides for collective bargaining at three levels: industry level, company level and municipal level – where the terms and conditions of municipal employees are negotiated. In practice, the key focus for bargaining is at company level. This is because many companies, particularly larger ones, are reluctant to be party to industry level agreements, despite the efforts being made by the government and unions to increase their importance. In addition, the key terms of some industry level agreements do no more than restate existing legislation, especially in industries facing economic difficulties.

The typical bargaining structure is therefore two-tier, combining an industry level agreement that provides the basic framework with a company/organisation-level agreement setting out the key details. In some sectors, such as banking or telecommunications, there is no industry level bargaining (see below), and in others, such as chemicals and pharmaceuticals, the industry level agreements have been left unchanged for several years, as the employers have refused to bargain. The two union confederations report that there is a clear push by employers towards the decentralisation of collective bargaining.

Although a strict reading of the labour code suggests that there is an obligation on employers to negotiate with unions, in practice it does not always happen.

There is also provision in the legislation that where an industry agreement has been signed by all the representative unions and employers, the government can, at their request, extend it to all the employers in the industry. (There are currently four representative employers’ associations (previously six), following changes to the rules on the criteria for representativeness in 2012; see section on unions.) Until 2009 no industry-level agreements had been extended in this way. However, in 2010, four agreements covering wood and furniture, water supply and sewerage, brewing and the paper and pulp industry were extended to all employers and their workforces in those industries, although the extension of the wood and furniture agreement was later withdrawn because of procedural errors. In 2011, an additional agreement, covering mineral processing, was also extended, while the breweries agreement was renewed. However, in 2013, only one of these agreements, that for breweries, was again extended. In general, employers, particularly those not members of employers’ associations, are hostile to the extension of agreements.

 

 

Other than this, only those employees who are members of the union that has signed the agreement are covered by it. Other employees can ask to be covered by it, but it is up to the unions and employers who signed the agreement to agree the terms.

 

 

There is no union structure in most small companies, which means there can be no company agreement, and most small companies are also not members of an employers’ association, which means the industry level agreements also do not apply. The result is that those working in Bulgaria’s many small companies are, in the overwhelming majority of cases, not covered by any collective agreement.

There are varying estimates of the proportion of employees covered by collective bargaining in Bulgaria, and it is clear that there are substantial differences between industries and between the public and private sectors. However, the 2013 collective bargaining review, undertaken by the KNSB union confederation, estimated coverage at some 29%.1 ISTUR, KNSB’s research body, notes that the situation varies greatly between industries, with high levels of coverage (above 90%) in areas like secondary education and other parts of the public sector, around 40% in manufacturing, but below 10% in some private service sectors like banking.

The official National Institute for Conciliation and Arbitration has also produced estimates of collective bargaining coverage, although only for company-level agreements. The figures show that at the start of 2012 there were 282,690 employees covered by company-level collective agreements. This is around 10% of the total workforce, and around 11% of all employees. The industries with the highest level of coverage at company level are energy (47%), water supply (40%) and mining and quarrying (34%). Those with the lowest level of coverage are construction (1%) and retail and wholesale (1%). The institute also points out that these figures do not include employees covered by industry level or municipal agreements.2 There is an industry level agreement for construction, for example.

 

 

Figures from the annual report of the National Institute for Conciliation and Arbitration for 2013 show that during that year the Institute received a total of 2,034 updated agreements (1,609 full agreements and 425 annexes to existing agreeme nts.3

 

As a result, on 1 January 2014, there were 2,232 agreements in force. Of these, 23 were signed at industry level, 105 at municipal level and 2,105 at company level. The report notes that industry level bargaining covers almost all industries with the exception of telecommunications, business services, financial and insurance activities, public administration, non-government organisations and personal services. Municipal agreements primarily cover those involved in education and children’s health.

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In the public sector, employees with special status – “civil servants” – do not have full collective bargaining rights. They can organise in unions but can only make suggestions or proposals on their terms and conditions, while only token industrial action is permitted.

 

There is no collective bargaining at national level in Bulgaria, although there is a tripartite council, the National Council for Tripartite Cooperation (NSTS), which is made up of representatives of unions, employers and the government, and meets regularly. Its role is to review proposed government legislation on employment and related issues, to discuss issues related to employment and to coordinate national programmes related to social dialogue.

 

Who negotiates and when?

 

At company level, the employer negotiates with the unions present in the workplace, whether or not they are affiliated to a representative trade union. Where there are several unions in a company, the legislation encourages them to present a common claim. Where this is not possible, the legislation states that the employer should reach an agreement with the union, or group of unions, whose claim has been approved by a majority of employees at a general meeting, or by a majority of those elected as delegates of their fellow employees, if it is not possible to arrange a general meeting of all employees.

 

 

 

At municipal level, only bodies belonging to representative unions, who should present a common position, are entitled to bargain. Similarly, at industry level, it is only representative unions who can bargain.

 

 

 

Agreements are assumed to last for one year, although they can last for up to two years.

 

The subject of the negotiations

Industry level collective agreements typically include details of minimum rates, and some also set higher rates. Reviewing collective bargaining in 2009 and 2010 the KNSB union confederation found that negotiators had often been prepared to make concessions on pay to preserve employment. Industry level agreements also typically include bonuses for productivity and quality of work as well as supplements for overtime, night work and hazardous working conditions.4 Issues such as working time, health and safety at work, redundancy procedures, protection against discrimination, work-life balance and information and consultation are also often regulated by industry level agreements.

Company level collective agreements are normally more detailed and cover qualifications, working time and leave, pay rates, health and safety, social insurance, trade union activities in the company, disputes procedures and the mechanism whereby non-union members can join the agreement.5

Bulgaria has a minimum wage which is set by the government after consultation with employers and unions in the national tripartite council, the NSTS.

ИНФОРМАЦИОНЕН БЮЛЕТИН Брой 1: КОЛЕКТИВНО ТРУДОВО ДОГОВАРЯНЕ В РЕПУБЛИКА БЪЛГАРИЯ Националният институт за помирение и арбитраж (Newsletter Number 1: Collective bargaining in Bulgaria, January 2013, National Institute for Conciliation and Arbitration) http://www.nipa.bg/sites/default/files/NIPA%20INFO%20BULETIN%20JAN%202013_0.pdf

L. Fulton (2015) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.