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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, although a generally binding agreement for the construction industry was signed in 2019.

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, indicate that its affiliates signed 1,152 collective agreements in 2016.[1] Almost all of these were at company or organisation level. In 2015 there were only eight industry-level agreements and three of these were signed by the health union LVSADA. 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 have also been industry-level agreements in industries such as transport, which are dominated by larger privatised companies. Medium-sized and small companies in the private sector, on the other hand, typically do not have unions and therefore have been unaffected by collective bargaining.

 

However, developments in 2019 may indicate a more positive context for collective bargaining. In October 2019, parliament adopted an amendment to the Labour Law, potentially imposing fines on employers who refuse to engage in collective bargaining. There were also two new industry agreements, one in the building industry and one in glass fibre, which have been made generally binding across the two industries (see below).  

 

There are no precise figures for the coverage of collective bargaining in Latvia. The Structure of Earnings Survey undertaken by the Latvian Central Statistical Bureau in 2006 found that around a third (34.2%) of all employees were covered by collective agreements at that time, with much higher proportions in health and education and much lower levels in private services like finance and retail.[2]

 

These questions were not asked in later surveys and similar information for later years is, therefore, not available. However, it is clear that number of collective agreements recorded by LBAS has halved since 2006, dropping from 2,426 (2,405 company and 21 industry) in 2006 to 1,152 in 2016. The fall in the number of industry agreements – from 21 to eight – has potentially had the greatest impact, as these cover larger numbers of employees.  

 

As a result LBAS, estimated that only 13% of employees were covered by agreements signed by its affiliates in 2015.[3]

 

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. Until recently, this provision had only been used in the railway industry. However, in April 2019, the construction union LBNA and three employers' associations plus individual companies signed a six-year deal – from November 2019 to December 2025 – which will have binding effect on all employers and workers in construction. This was followed by a second agreement for glass fibre, which was signed in December 2019, coming into effect in 2020 and running for three years.

 

As well as negotiations between employers and unions, there is also a national tripartite structure involving the government. This is the National Tripartite Co-operation Council (NTSP where the three groups – employers, unions and government – 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. In addition, agreements will often also provide support for workers with young children and deal with health and safety issues.[4]

 

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).

[1] Living and working in Latvia, by Raita Karnite, Eurofound, November 2019  https://www.eurofound.europa.eu/country/latvia#collective-bargaining (Accessed 01.04.2020)

[2] DSS16. Number of employees having a collective pay agreement by kind of activity in the end of October, Central Statistical Bureau of Latvia, 2009 (Accesses 21.04.2015)

[3] Living and working in Latvia, by Raita Karnite, Eurofound, November 2019  https://www.eurofound.europa.eu/country/latvia#collective-bargaining (Accessed 01.04.2020)

[4] Latvia: post-Soviet legacy and the impact of neoliberal ideology on collective bargaining by Aija Lulle and Elza Ungurein Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

L. Fulton (2020) National Industrial Relations, an update. Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.