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Collective Bargaining

At least 45% of employees in the Czech Republic are known to be covered by collective bargaining, most through company level negotiations, and the figure may be higher. Industry level agreements cover some industries and, following legal changes in 2004, they can again be extended more widely.

The framework

 

Collective bargaining in the Czech Republic can take place at both industry level – where the agreements reached are known as “higher level collective agreements” (KSVS) – and at company level, although a majority of companies are not covered by any collective bargaining.

 

In terms of the numbers covered, the latest figures produced by the Czech Statistical Office, for 2018, show that 44.5% of all employees were covered by collective bargaining, with 40.2% definitely not covered, and 15.3% where the position was unclear.[1] If some of the “unclear” group are in fact covered by collective bargaining, the proportion could be above 50%. Figures from the same source for earlier years show that collective bargaining coverage has fallen slightly: it was 47.6% in 2012. However, there are year to year fluctuations and the figure is also affected by changes in the proportion of employees where the situation is unclear.

 

Looking at the breakdown between industry level and company level agreements, figures presented to the council of ČMKOS, the country’s largest union confederation, in November 2017 indicate that company agreements cover a higher proportion of employees than higher level agreements.[2] The report shows that 1,338,937 employees, or 31.2% of the workforce, were covered by 3,767 agreements signed by ČMKOS affiliates at company level in 2017. The figures for higher level agreements, in effect industry level agreements, have not been updated since 2013 but in that year they covered 620,665 employees, or around 15% of the workforce. There is an overlap between the two groups, which would reduce overall coverage, but the ČMKOS figures do not take into account agreements signed by unions outside the ČMKOS confederation. There were six higher level agreements signed by other unions in 2017 and an unknown number of agreements at company level.

 

One reason why the bulk of agreements are at local level is that many employers’ associations are unwilling to bargain on behalf of their members.

 

The ČMKOS figures show that the number of employees covered by collective bargaining at company level, after falling sharply in the 1990s, has stabilised at between 1.3 and 1.4 million since 2002. In 2018, a total of 1,384,711 employees  were covered by ČMKOS negotiated agreements, the highest number since 2009, when 1,439,212 were covered. The number of agreements has, however, fluctuated more, ranging between 4,904 in 2011 and 3,082 in 2009. In 2018 there were 3,770 agreements at company level signed by ČMKOS affiliates.

 

It is impossible to provide similar figures on trends in industry level agreements because, since 2013, ČMKOS has been unable to collect the necessary information on the number of employers and employees covered. In 2013 there were 19 higher level agreements covering 620,665 employees. By 2018 the number of higher level agreements had fallen to 16, although it is unclear whether the number of employees covered has fallen correspondingly.

 

Industry level agreements are normally only binding on those employers who are members of the employers’ association that signed the agreement. However, the legislation (Collective Bargaining Act (Act No. 2/1991)), allows industry level collective agreements to be extended to all employers in the same industry if certain conditions are met. The rules, which were revised in 2004, require that any request to extend a collective agreement must be made jointly by the largest union and the largest employers’ association in the industry, and the extended agreements do not apply to those companies employing fewer than 20 employees.  Since 2008 the industries in which agreements have been extended have remained largely unchanged. In 2018 five agreements were extended in this way. They covered: agriculture (an agreement where an affiliate of the other main union confederation, ASO, is the principal signatory); and four agreements signed by ČMKOS affiliates:  glass and ceramics; construction; and textiles, clothing and leather and transport, where the agreement signed in 2017 continues until 2020.[3]  

 

As well as these two levels of bargaining, unions, employers and government meet in the tripartite Council of Economic and Social Agreement (RHSD). This does not conclude binding agreements but in the past, particularly in the early 1990s, it played a major role through a series of “general agreements” in providing a framework for collective bargaining. While no general agreement has been signed since 1994, the Council continues to meet and, together with other forms of dialogue, influences government policy. The plenary meetings of the RHSD are chaired by the prime minister and it meets around every six weeks.

 

ČMKOS and ASO both send representatives to the council, where ČMKOS has six seats. The statute of the RHSD requires, among other things, that participating unions must have at least 150,000 members, but this does not seem to be applied to ASO.

 

Who negotiates and when?

 

Negotiations take place between the unions, which can be workplace union organisations as well as unions nationally, and employers, which similarly can be either individual employers or employers’ associations. Legislation which stated that an employer could negotiate with the largest union at a workplace, where there were several and they could not agree, was ruled unconstitutional by the constitutional court in March 2008.

 

Figures from the 2017 ČMKOS survey of collective agreements show that 75.6% of company level collective agreements in 2017 were signed by a single union, 11.3% by two and 13.2% by three or more.

 

Collective agreements at company level normally run for a year. At industry level, agreements are increasingly signed for periods of two years or more, although the pay element is still normally for 12 months, with pay rates being updated annually through a supplementary agreement.

 

The subject of the negotiations

 

Pay is the main subject of collective bargaining although there are also negotiations on other issues such as working time, work organisation, health and safety, work-life balance and employers’ contributions to pensions.

 

The Czech Republic also has a minimum wage. This is set by the government after discussions between the employers and the unions in the tripartite Council of Economic and Social Agreement (RHSD). There is no automatic uprating and the minimum wage can be frozen, as it was for six years from 2007 to 2013, when the centre-right government, led by Petr Nečas ,was in power.

[1] Structure of earnings survey 2018, Table A7, Czech Statistical Office, 2019. See https://www.czso.cz/csu/czso/structure-of-earnings-survey-2018  (Accessed 18.07.2019)

[2] Zpráva o průběhu kolektivního vyjednávání na vyšším stupni a na podnikové úrovni v roce 2018, 12.11.2018

[3] See list of extended agreements published by the Ministry of Labour and Social Affairs https://www.mpsv.cz/cs/3856 (Accessed 18.07.2019)

L. Fulton (2019) Nationan Industrial Relations, an update. Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.