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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 is the most 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. Industry and company-level bargaining are not mutually exclusive, and in many industries they co-exist. However, there are also some industries, like financial and insurance services and telecommunications, where there are no industry level collective agreements.

 

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 union efforts to extend their coverage. In addition, the key terms of some industry level agreements do no more than restate existing legislation, especially in industries facing economic difficulties.

 

Industry-level agreements have the potential to become more important, in terms of numbers covered, as there is provision in Article 51b of the Labour Code for the government to extend an industry-level agreement to all the employers, and therefore all the employees, in that industry. However, this depends on the agreement being signed by all the representative unions and employers, and the signatories making a request for it to be extended. In practice, therefore, extensions have hardly ever been used other than in a brief period between 2010 and 2013, when four industries (water supply and sewerage, brewing, the production of paper and cardboard and the exploration, mining and processing of minerals) had their agreements extended. By 2018, as the reports from the General Labour Inspectorate show, most of these had lapsed, with only two, those for the exploration, mining and processing of minerals and brewing, still in force.[1]

 

In general, employers, particularly those not members of employers’ associations, are hostile to the extension of agreements, and overall the two union confederations report that there is a clear push by employers towards the decentralisation of collective bargaining.

 

Other than this extension mechanism, 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.

 

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. In any case, in most small companies there is no union structure, which means there can be no company agreement. 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.

 

Figures from the 2014 Structure of Earnings Survey, produced by the Bulgarian National Statistical Institute, show that overall 29.7% of employees are covered by collective bargaining. [2] This is made up of 19.4% of employees covered by company agreements, 7.1% by industry agreements and 3.3% by municipal level agreements.

 

The allocation of employees between the categories is defined according to which collective provisions cover more than 50% of employees in the local unit or company.

 

However, bargaining coverage varies greatly between industries, with high levels of coverage (above 90%) in areas like secondary education and other parts of the public sector, coverage of around 40% in manufacturing, and much lower coverage (below 10%) in some private service sectors like banking. 

 

Other figures on collective bargaining come from the official National Institute for Conciliation and Arbitration, which maintains a database of collective agreements and publishes an annual report on collective agreements and collective disputes. The report for 2017 shows that, at the end of the year, there were 1,981 collective agreements in force (that is, excluding those which had expired). Of these 1,812 were at company level, 150 were for municipalities and just 19 were industry-level agreements.[3]

 

The 19 industry level agreements in force covered forestry, mining and quarrying, metalworking, pulp and papermaking, energy, water and sewerage, parts of construction, motor repair, restaurants and tourism, education, health and a range of cultural activities, including both music and football.

 

The 150 municipal agreements overwhelmingly related to education and health, each accounting for around 40% of the agreements, with the remainder more or less evenly split between culture, social services and other activities.

 

There is more detail on the 1,981 company-level agreements, including information on the number of employees covered, although the National Institute for Conciliation and Arbitration, which collects the figures, recognises that they are incomplete. The figures, which are based on an average for the years 2011 to 2017, show significant differences between the number of agreements in each industry and the number of employees covered. For example, education accounts for 50% of all agreements, but only 18% of the employees covered, while for industry the situation is reversed, accounting for just 12% of agreements but 38% of employees covered. One very noticeable element of company-level collective agreements is that they primarily cover public sector bodies – 88% of all these agreements and 65% of all employees covered by these agreements are in the public sector.

 

However, despite this dominance of the public sector in company-level bargaining, it is important to note that employees with special status in the public sector – “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 the unions, employers and the government, and meets regularly. The union members come from the two nationally representative union confederations (KNSB and Podkrepa) and employers come from the five nationally representative employers’ associations. The role of the Council 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.  There are also tripartite social dialogue bodies within industries and at district and municipal level.

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. It is also possible for an employer to reach agreement with a general meeting of all employees or their delegated representatives.

 

In practice, figures from the National Institute for Conciliation and Arbitration show that the vast majority of company-level agreements are signed by unions. Only four out of 1,812 agreements in 2017 were signed by non-union bodies, and in most cases they were signed by either one union (70%) or two unions (24%), although, in terms of employees, there was little difference between the number covered by a single union signatory (38%) and the number covered by two union signatories (39%).[4]

 

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

 

In the labour code, agreements are assumed to last for one year, although they can last for up to two years. In practice, 75% of agreements last for two years and 17% for one, with the remaining 8% lasting other periods.[5]  

 

The subject of the negotiations

 

Industry level collective agreements typically include details of minimum rates, and some also set higher rates. 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.  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.[6]

 

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

[1] Специален регистър на колективните трудови договори (Special Register of Collective Agreements), ИЗПЪЛНИТЕЛНА АГЕНЦИЯ „ГЛАВНА ИНСПЕКЦИЯ ПО ТРУДА“  http://www.gli.government.bg/page.php?c=43&d=117 (Access 15.11.18)

[2] Structure of Earnings 2014, National Statistical Institute Bulgaria, 2017, Table 2.4  http://www.nsi.bg/sites/default/files/files/publications/struktura_rab_Zaplati_14.pdf

[3] ГОДИШЕН ДОКЛАД ЗА КОЛЕКТИВНИ ТРУДОВИ ДОГОВОРИ И КОЛЕКТИВНИ ТРУДОВИ СПОРОВЕ В РЕПУБЛИКА БЪЛГАРИЯ 2018, June 2018, Table 3,    http://nipa.bg/sites/default/files/2018%20CLA%20CLD%20ANNUAL%20REPORT.pdf (Accessed 21.11.2018)

[4] Ibid Charts 75a and 75b

[5] Ibid Chart 61a

[6] Ibid

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.