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Slovenia Business Week no. 27: Sides Finalise Deal on Social Issues

The social partners - the government, trade unions and employees - finalised on Thursday, 26 July a three-year framework deal on social issues

The social partners - the government, trade unions and employees - finalised on Thursday, 26 July a three-year framework deal on social issues. The initialling of the document marks the end of more than 18 months of at times tense talks that saw the trade unions and employers fight over issues such as wages, labour market flexibility and taxes.

Even today the differences between the two sides could not be completely put aside, as the reopening of talks on the chapter of wages delayed by several hours the scheduled initialling ceremony. In the end, a compromise was reached, allowing the deal to be penned by the representatives of the three sides.

The framework agreement dealing with social policies is crucial as it dictates the direction of talks among the social partners on key issues in the coming years. The new agreement will be valid through 2009.

The wage chapter was the last remaining stumbling block, as the unions demanded branch wage deals, while trade unions called for decisions on wage increases to be taken at company level. In the end, a compromise was reached envisaging real growth of wages based on inflation and growth in productivity, at both branch and company level.

The compromise on wages means that future wage talks will be conducted applying collective bargaining agreements for individual industries and companies, but will be conducted on a voluntary basis.

The relationship between inflation and productivity in wage increase will be determined on a case-by-case basis, said Samo Hribar Milic, the director general of the Chamber of Commerce and Industry.

According to Dusan Semolic, the president of Slovenia's largest trade union, the delay in the initialling of the deal was caused by a dispute over the inclusion of branch collective agreement in wage talks.

Excluding branch agreements would mean that wages would effectively be frozen at many companies, since they do not have company bargaining agreements, said the representatives of the Association of Free Trade Unions of Slovenia.

According to the KSNN Independence union head Drago Lombar, the document will be the first of its kind "to bring real results, since it contains realistic commitments". According to Boris Mazalin of the KS90 union, reason prevailed to allow a deal to be hammered out despite the differences over wages.

Meanwhile, Hribar Milic said the employers were "happy, very happy even". According to him, the outcome is a deal achieved by consensus that will form the basis for future reforms in Slovenia.

Meanwhile, acting secretary general of the Employers' Association France Kokalj said the "real value" of the deal would be manifested in its first test, when negotiations begin on wage policies for 2008 and 2009.

Apart from wages, main sticking points in talks on the document were the labour market, with the employers calling for greater flexibility, and taxes, including proposals for a flat tax in Slovenia, which was staunchly opposed by the unions.

The new social agreement has 19 chapters. Its signing is scheduled for September.

Source: Slovenian Press Agency STA

Author: STA, Slovenian National Press Agency