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Collective Bargaining

Around 40% of employees in the Czech Republic are covered by collective bargaining, most through company level negotiations, although in many companies there is no bargaining at all. Industry level agreements cover some industries and following legal changes in 2005 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 show that 38.1% of all employees were covered by collective bargaining in 2012, with 33.7% definitely not covered, and 28.2% where the position was unclear. (The figures exclude employers in the private sector with fewer than 10 employees.)1 Figures from the same source for earlier years show that collective bargaining coverage has also fallen. It was 49.2% in 2005 and 41.2% in 2009, although it was very slightly higher in 2012 than it was in 2011.

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 October 2013 indicate company agreements cover a higher proportion of employees than higher level agreements.2 In total, 34% of the workforce were covered by 4,739 agreements signed by ČMKOS affiliates at company level in 2013 and 15% by 19 higher level agreements – in effect industry level agreements. 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 five higher level agreements signed by other unions in 2012 and an unknown number of agreements at company level.

 

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 2013, a total of 1,348,065 employees in 4,739 companies were covered by ČMKOS negotiated agreements, compared with 1,351,127 in 2012 and 1,352,974 in 2011.

 

The number covered by industry level agreements has shown greater fluctuations, in part because of changes in the legal rules allowing the government to extend them more widely (see below). There were 620,665 employees covered by higher level agreements signed by ČMKOS unions in 2013. Of these some 390,000 were covered directly and 232,047 were covered because of the extension of the agreements.

 

The rules on extending industry level collective agreements to other employers in the same industry, even if they are not members of the employers’ association which signed the agreement, were revised in 2004. This followed a ruling by the constitutional court that the previous procedure was unconstitutional. Under the revised procedure, requests to extend collective agreements must be made jointly by the largest union and the largest employers’ association in the industry. The extended agreements do not apply to those companies employing fewer than 20 employees. The number of employees covered by these extended agreements has remained constant at between 200,000 and 300,000 since 2010 and they only apply to a limited number of industries - construction, textile and leather, transport and glass and porcelain.

 

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. Union confederations must have at least 150,000 members, in order to be eligible to take part in the Council, which means that at present only two confederations, ČMKOS and ASO, participate.

 

 

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.

As already stated the bulk of agreements are at local level and one reason for this is that many employers’ associations are unwilling to bargain on behalf of their members. It is also difficult for effective collective bargaining to take place at industry level in the public sector, because the employers involved cannot form employers’ associations.

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 and employers’ contributions to pensions.

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 2008.3

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.