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Collective Bargaining

Company or organisational level bargaining is the most important level of bargaining in Latvia, with relatively few industry-level agreements. Despite this, collective bargaining coverage, according to the official figures, is relatively high, at 34% of all employees, although the union estimate is much lower, at 16%. There are no negotiations for large parts of the private sector.

The framework

The law allows for agreements at industry, regional and company/organisation level. However, other than regional agreements with regional authorities, in practice there are only industry level and company/organisation level agreements, and the company level is clearly predominant. Figures from the union confederation, LBAS, suggest that in 2011 there were 1,460 company and organisation level agreements, compared with only 29 industry level agreements, which often only provide a broad framework for company level negotiation. Company and organisation level collective agreements must be approved by majority vote in a meeting of the employees.

 

 

Collective bargaining is much more important in the public sector, including large state-owned companies, than in the private sector. Most of the industry-level agreements are also in the public sector, for example in education and health care, although there are also industry-level agreements in industries such as energy and transport, which are dominated by larger privatised companies.

 

 

Medium-sized and small companies in the private sector typically do not have unions and therefore are unaffected by collective bargaining. However, labour law changes in 2010, which affected the way working time could be calculated – giving a longer reference period for collective agreements than for individual contracts – encouraged some smaller companies to sign collective agreements.

 

 

Overall, a survey of wages and salaries undertaken by the Latvian central statistical office in 2006 indicates that the coverage of collective bargaining is higher than union density. In that year, according to these figures, 34.2% of all employees were covered by collective agreements, although some experts question whether these findings are accurate. The figures show wide variations between industries. While 69.4% of those engaged in health and social work and 68.6% of those in education were covered by collective agreements, in banks and finance the figure was only 16.9%, in retail and wholesale 13.9% and in hotels and catering 11.2%.1

 

 

However, Eurofound, quoting figures from LBAS, provides a much lower estimate of collective bargaining coverage, just 16.0%.2

 

 

By law there is also scope for collective agreements reached at industry level to be extended to all the employers and employees in that industry provided that the employers’ association that has signed the agreement employs more than 50% of all the employees in the industry, or accounts for more than 60% of the goods and services that industry produces. In practice, this provision has only been used in the railway industry.

 

 

The National Tripartite Co-operation Council (NTSP) provides a framework for discussions between the employers, unions and government at national level where the three groups are equally represented. The council discusses labour legislation and played a major role in developing the Latvian system of industrial relations. It also discusses the national minimum wage.

Who negotiates and when?

Negotiations at industry level are conducted between unions and employers’ associations. At company/organisation level the employer negotiates with the union representing the employees or “authorised employee representatives” (see section on workplace representation), if the employees are not members of a union. Where there are several unions, or unions and authorised employee representatives, they must undertake joint negotiations and draw up a common position.

 

Unless otherwise specified, collective agreements last for one year, although their provisions continue in force until a new agreement has been reached, unless some other arrangement has been agreed by the parties.

The subject of the negotiations

Latvian legislation defines the issues that collective agreements are to cover – including the organisation of work, pay and internal work procedures. In practice, agreements usually cover pay and bonuses, holidays and working time – particularly total working time – as well as issues related to dismissals, particularly collective redundancies.

Latvia has a national minimum wage, which is set by the government, taking account of the views of employers and unions, which are the subject for discussion in the National Tripartite Co-operation Council (NTSP).

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.