Home / National Industrial Relations / Countries / Slovak Republic / Collective Bargaining

Collective Bargaining

Collective bargaining takes place at both industry and company level and it is estimated that around 35% of employees are covered. Company level agreements are important in setting effective wages, leading to substantial variations between companies.

The framework

 

Collective bargaining in the Slovak Republic takes place at both industry and company level.[1]

 

Industry level collective agreements (known as higher-level agreements (KZVS) in Slovakia) must be registered with the Ministry of Labour, Social Affairs and Family, and the Ministry provides details each year of the number of these agreements in its annual report on the country’s social situation. In 2019, 20 higher-level agreements and 17 amendments to higher-level agreements were signed, a total of 37, split between 28 in the private sector and nine in the public sector.[2] This is a higher total than for the immediately preceding  years: 30 in 2018 and 25 in 2017 and also higher than in the previous five years covering 2012 to 2016, when the annual average was 27.The Ministry states that this increase is the result of “the overall development of the economy and the financial results of the employers who belong to the employers’ associations”. Overall, based on the surveys conducted annually by the Ministry of Labour, Social Affairs and Family, 33 higher-level collective agreements applied to companies operating in the private sector in 2019 compared with 33 in 2018 and 32 in 2017.[3]

 

The Ministry provides information on the number of organisations covered by these higher-level agreements. In 2016, higher-level collective agreements covered 388 companies plus large parts of public administration.[4]  All these companies belonged to the employers’ associations which signed the agreement, as, in 2016, it was not possible to extend agreements beyond the members of the signatory employers’ associations. However, since then the law has changed, and the number covered has almost certainly increased.

 

The issue of the extension of industry level agreements – making them binding on companies that operate in the same industry but do not belong to the signatory employers’ association and therefore would not otherwise be covered – has been politically controversial.  Over the period 2002 to 2014 the rules changed almost every time the government changed, with right-wing governments giving employers a veto over extension and social democratic-led governments removing it . The issue was then taken to the Constitutional Court, which ruled in March 2016 that the policy of extensions as it operated at that time was unconstitutional.

 

New legislation, aiming to overcome this hurdle was drawn up and it came into force in September 2017. It states that only “representative” higher-level collective agreements can be extended. To be representative the agreement must be signed on the employers’ side by an employers’ association which employees more people in that industry than any other employers’ association, and on the union side by a union which operates in more than 30% of the employers belonging to the employers’ association, and which signed the previous year’s agreement (or asked to sign it, if it is a new agreement). There may only be one representative agreement in the industry concerned, which is defined precisely in line with the official NACE industry classification, and the final assessment of the representativeness of the agreement is made jointly by the unions and employers in the industry concerned and the government.

 

These new rules seem to have made relatively little difference to the number of agreements being extended. After a hiatus in 2016, when, because of the court case, no agreements were extended and a fall to just two extensions in 2017, the number of agreements extended since then has returned to the level before the court case. There were five extensions in both 2014 and 2015 and five in 2018 and six in 2019.[5] The industries covered are also largely the same:  construction, the manufacture of glass and related products, some metalworking, the manufacture of cement and steel, the manufacture of wiring products and bus transport. As before, the extension does not apply to companies employing fewer than 20 people or those that have been in business for less than two years.

 

As well as bargaining at industry level, negotiations also take place at company level. By law, company agreements (PKZ) can only improve on what has been negotiated at industry level, and company-level bargaining is often crucial in setting pay, with wide variations between companies.

 

Figures collected for the Ministry of Labour, Social Affairs and Family show that 1,512 organisations had a company-level collective agreement in 2016, equivalent to 32% of all organisations surveyed. These agreements were much more common in the public sector, where more than two-thirds (70.9%) of organisations had such an agreement than in the private sector, where only a fifth of organisations (20.7%) had an agreement at company level. The largest single group of agreements were those signed by the education workers’ union OZPŠAV.[6] Figures for 2017 show slightly lower percentages for both sectors – down to 65.8% in the public sector and 18.4% in the private sector.[7]

 

There are important variations between industries in the relative importance of industry-level and company-level bargaining, and in some cases there is important interplay between the two levels as a 2019 study on social dialogue indicated.[8] It noted, for example, that in construction there is an industry-level agreement, which is important in fixing terms and conditions and is extended with employer support. In retail, there are two higher-level agreements with two separate employers’ associations, but they do not cover most employees in retail and barely go beyond basic legal provisions. They are also not extended because of employer opposition. As a result, the key area for bargaining in retail is at company level. Finally, in schools, although one of the higher-level agreements for the public sector covers pay, the amount actually paid is “composed of fixed levels, set by the sector collective agreements and a flexible component decided on by the school-level collective agreement”. This makes the organisation-level agreement a key factor in determining employees’ earnings and an important area for bargaining.

 

It is difficult to judge the proportion of employees covered by collective bargaining. Figures from the annual survey of the Ministry of Labour, Social Affairs and Family show coverage at 47.0% of employees in the private sector and 79.2% in the public sector in 2017, which suggest that more than half of all employees were covered by collective agreements.[9]  However, this figure is likely to be too high as the survey is primarily based on organisations with more than 20 employees and smaller organisations are less likely to be covered by collective agreements. Eurofound’s 2019 report quoted estimates from Slovakia’s social partners that  up to 35% of all employees were covered by collective bargaining, and this seems a more likely number.[10]

 

Whatever the correct figure for bargaining coverage is, the statistics from the annual survey that coverage is slowly falling, with the proportion of private sector employees covered by collective bargaining dropping from 50.1% in 2013 to 47.0% in 2017, while the proportion of public sector employees covered fell from 88.0% to 79.2% in the same period. For the ETUI study, however, the main changes is that “both unions and employers increasingly concentrate their efforts on adopting legislative solutions to employment and working conditions issues instead of collective bargaining”. [11]  

 

As well as industry and company-level collective bargaining, there are also tripartite meetings between unions, employers and the government, in what is now known as the Economic and Social Council (HSR). The government, the main employers’ associations and the unions each have seven seats on the 21-member body. A union organisation must have at least 100,000 members and operate in at least five of Slovakia’s eight regions to be nationally representative and have seats on the HSR. Only the KOZ SR union confederation meets these conditions, and it holds all seven seats.

 

The HSR discusses government policies and proposed legislation in economic and social areas. One of these areas is the minimum wage. However, new legislation, which came into effect in 2020, provides that, if unions and employers cannot reach agreement on the level of the minimum wage, it will be set automatically at 60% of average pay in the previous year. This is an effective reduction in the influence of the HSR.

 

In the early 1990s, national level meetings between unions and employers played an important role in setting bargaining guidelines for industry and company-level bargaining. However, the last pact of this kind was signed in 2000.

 

Who negotiates and when?

 

Negotiations at industry level take place between the industry unions and the appropriate employers’ associations. At local level, the two sides are the employer and a union representative (normally from the workplace union group). Other bodies such as the works council have no right to negotiate collective agreements. (Legislation introduced by a right-wing government in 2012, which allowed works councils to sign collective agreements where no unions were present, was subsequently repealed.)

 

If there are several trade unions in the company or organisation, they are required to act in absolute agreement if they are negotiating for the whole workforce, unless some other arrangement has been agreed. If they cannot agree, the employer has the right to negotiate with the union with the largest number of members at the workplace, or with a group of unions, if together they have more members than the union with the highest number of members. The collective agreement reached covers the whole workforce.

 

The legislation on collective bargaining assumes that agreements last for one year, unless otherwise stated. However, many company-level collective agreements run for longer than a year. At industry level the length of collective agreements also varies, with many lasting two or three years.

 

The subject of the negotiations

 

The key issue for negotiations, particularly at company level, is pay. However, negotiations also cover other issues such as, hours and holidays, special leave, working conditions, health and safety, training arrangements, trade union rights and facilities, severance pay and, at company level, the use of the social fund, which is paid for by contributions from the employer.

 

The Slovak Republic has a minimum wage. This is set each year following discussions in the tripartite HSR between the unions, employers and the government, represented by the Ministry of Labour, Social Affairs and Family. However, under legislation which came into effect in 2020, the rate is now set automatically at 60% of average wages in the previous year if the unions and employers cannot agree a common figure.

[1] For a detailed examination of collective bargaining in Slovakia see Slovakia: between coordination and fragmentation by Marta Kahancová, Monika Martišková and Mária Sedláková in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

[2] Správa o sociálnej situácii obyvateľstva Slovenskej republiky za rok 2019 (and previous years) Ministerstvo Práce, Sociálnych Vecí a Rodiny https://www.employment.gov.sk/isp/ (Accessed 20.08.2020)

[3] Ročný výkaz o pracovných podmienkach a nákladoch na podnikovú sociálnu politiku, Ministerstvo Práce, Sociálnych Vecí a Rodiny https://www.employment.gov.sk/sk/ministerstvo/vyskum-oblasti-prace-socialnych-veci-institut-socialnej-politiky/v6/ (Accessed 20.08.2020)

[4] Kolektívne zmluvy na Slovensku by Marta Hašková, ePRÁCA, September 2017, http://kozsr.sk/wp-content/uploads/2017/10/2017_01_ePR%C3%81CA.pdf (Accessed 20.08.2020)

[5] Správa o sociálnej situácii obyvateľstva Slovenskej republiky za rok 2019 (and previous years) Ministerstvo Práce, Sociálnych Vecí a Rodiny https://www.employment.gov.sk/isp/ (Accessed 20.08.2020)

[6] Kolektívne zmluvy na Slovensku by Marta Hašková, ePRÁCA, September 2017, http://kozsr.sk/wp-content/uploads/2017/10/2017_01_ePR%C3%81CA.pdf (Accessed 20.08.2020)

[7] Annual Review of Labour Relations and Social Dialogue: Slovakia 2018, by Trexima, Friedrich-Ebert-Stiftung, 2019 http://library.fes.de/pdf-files/bueros/bratislava/15365.pdf (Accessed 20.08.2020)

[8] Enhancing the effectiveness of social dialogue articulation in Europe (EESDA) National report: Slovakia by Marta Kahancová, Monika Martišková and Gábor Szüdi, CELSI, December 2019 https://celsi.sk/media/research_reports/RR29_V6XQ2Tv.pdf (Accessed 20.08.2020)

[9] Annual Review of Labour Relations and Social Dialogue: Slovakia 2018, by Trexima, Friedrich-Ebert-Stiftung, 2019 http://library.fes.de/pdf-files/bueros/bratislava/15365.pdf (Accessed 20.08.2020)

[10] Working life in Slovakia by Ludovit Cziria and Rastislav Bednarik, Eurofound November 2019 https://www.eurofound.europa.eu/country/slovakia#collective-bargaining  (Accessed 20.08.2020)

[11] Slovakia: between coordination and fragmentation by Marta Kahancová, Monika Martišková and Mária Sedláková in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.