The Voice of the Workers No 2
summary of content

Collective agreements and the process of collective bargaining – summary of content

The second issue of the regional newsletter The Voice of the Workers (Glas radnika) is dedicated to collective bargaining and collective agreements – one of the most important topics of trade unions.

In addition to thematic texts, the newsletter also publishes news about the most important activities, initiatives and actions of the trade union headquarters of the countries in the region – members of the regional trade union network Solidarity.

Thematic texts were written by members of the professional services of the trade union headquarters. All the texts were edited by members of the Voice of the Workers Editorial Board. General observations in thematic texts are the following:

• A relatively good legal framework governing the system of collective bargaining;
• Collective bargaining crisis in all countries of the region – especially in the private sector;
• Insufficient coverage of individual collective agreements in companies;
• Unwillingness of employers to update existing collective agreements;
• Trade unions, despite the problems, consider collective bargaining and collective agreements to be the best way to protect the social and economic position of the labour world.

Legal framework of the system of collective agreements

In Serbia, the collective agreement is regulated by the Labour Law, defined as a general act that regulates the labour rights, obligations and responsibilities and the mutual relations of the participants of the collective agreement, which can be concluded as a general, special and individual collective agreement with the specific employer. The general collective agreement (GCA) ceased to be valid in May 2011 and to this day, primarily due to the opposition of the employers’ association (Union of Employers of Serbia), the initiative of representative unions for negotiations on a new GCA has not been accepted. In the public sector, special (branch) collective agreements have been concluded for almost all the branches. In the private sector, only collective agreements have been concluded with extended effect for workers in the travel industry and for those engaged in the entertainment and music industry. The employers’ union refuses to define the level of wages, salaries and other benefits of employees (the so-called tariff part) in the private sector through special collective agreements. In the public sector, special collective agreements are generally applied directly and collective agreements are not adopted with the employer.

In North Macedonia, there is a general collective agreement for the public sector and a general collective agreement for the private sector – as the two basic pillars of collective bargaining. The general collective agreement for the public sector, signed by the Confederation of Free Trade Unions of Macedonia and the government in 2008, regulates all the rights and obligations of all employees in the public sector. The general collective agreement for the private sector signed between the Federation of Trade Unions of Macedonia and the Macedonian Employers’ Organisation in 2014 is valid for all employees in the private sector. There are also collective agreements at branch level and individual agreements with employers. In the public sector, collective agreements at the branch level, but also at the level of a company or institution, play a major role. Certain branch unions have concluded collective agreements at the municipal level, which are valid for all employees in that local area.

In the Federation of Bosnia and Herzegovina, the conclusion and signing of collective agreements is prescribed by the Labour Law, which provides for several types: general one (concluded for the territory of the entire Federation and binding for all workers and all employers), branch or special one (for a specific area of work – industry), collective contract for a canton and the collective agreement with the employer (individual collective agreement) which cannot determine a smaller scope of employees’ rights than it is determined by the general or special collective agreement. The general collective agreement was not signed due to the resistance of a large number of employers organised in the Association of Employers. Employers in the largest number of branches and sectors regulate the scope of workers’ rights in labour regulations and labour contracts. The importance of collective agreements in protecting the rights of male and female workers is particularly big because the Labour Law does not elaborate on the scope of labour and other rights of employees, but leaves it to collective bargaining. Collective agreements must stipulate salaries and other rights, such as severance pay for retirement, benefits for a “hot meal”, transport of workers, their past work, benefits in the event of the death of the worker or members of the immediate family, additional days of annual leave, length of paid and unpaid leave, the status of a union trustee, conditions during a strike, etc. According to the Labour Law, the duration of the collective agreement is limited to three years.

In Republika Srpska – entity of Bosnia and Herzegovina, collective agreements in the legal system represent a separate written act which, in accordance with the Labour Law, regulates the labour rights, obligations and responsibilities, the manner and procedure of their realisation, as well as the mutual relations of the contracting parties. The collective agreement represents a constitutional category and a guarantee of the realisation of basic labour rights and gives workers the opportunity to fight through the trade union for more favourable rights and working conditions than those prescribed by law. Regulating the rights of non-unionised workers is left to the discretion of employers. According to the provisions of the Labour Law, the worker is entitled to the basic gross salary in accordance with the law and the collective agreement. Salary negotiations are partially limited by the legal regulation of the job complexity coefficient, as one of the elements for calculating the basic salary. The price of work, as another element of the calculation, is determined by the presidents of the branch unions together with the relevant ministers. Salary negotiations, through collective agreements, are current in the area of local self-government, preschool education, culture and social protection, which are founded by the local community. In the private sector, wages are regulated exclusively by collective agreement if there is an organised trade union. In companies without unions, wages are regulated by unilateral acts of the employer, which is illegal and unconstitutional. Collective agreements are concluded for a period of up to three years.

There are three types of collective agreements in Montenegro: general collective agreement, branch collective agreements and collective agreements with the employer. The provisions of the general collective agreement in Montenegro apply to all employees and employers – in both private and public sectors. It, in accordance with the Labour Law, determines the elements for determining wages, salary compensation, other incomes of employees and determines the scope of rights and obligations from work. This act is of great importance for all employees, especially in industries where the degree of trade union organisation is low and where there is no branch collective agreement (trade, media, banks, etc.). The general collective agreement is concluded by representative national trade union headquarters, a representative association of employers and the government of Montenegro. The provisions of this act are further elaborated through branch and collective agreements with the employer. The Labour Law stipulates that, in the event that the collective agreement with the employer has not been concluded, the branch collective agreement for the corresponding activity is directly applied, and if there is none, the general collective agreement is applied.

In Croatia as well, collective bargaining with employers is the basic activity of trade unions by which they ensure their members better wages and generally a higher level of workers’ rights than the minimum prescribed by law. Salary supplements are also important rights established by collective agreements. The Labour Law stipulates only that for overtime and work on non-working days, as well as work in difficult conditions, an increased salary must be paid, but not the amount, so that the legal norm can be respected even with an increase of 0.01 percent. In practice, collective agreements stipulate increases that usually range between 30 and 50 percent. The seniority allowance does not exist in the law, but it is included in most collective agreements (usually 0.5 percent per year of seniority). And numerous other material rights, such as Christmas pay, holiday pay or jubilee awards, also derive exclusively from collective agreements. Collective agreements are also important for trade union work because the Labour Law contains only general provisions on the rights of trade union representatives, while contracts stipulate the number of paid working hours for trade union work, as well as other conditions that the employer must provide.

In Slovenia, collective agreements represent an important source of autonomous Labour law and have become the foundation of the labour law system. The Labour Relations Act regulates many employee rights only in principle and leaves further regulation to collective agreements – for example, the amount of compensation for working conditions. The general collective agreement is not currently in force, so individual rights must be specified in special provisions in collective agreements. Collective agreements also define rights that are not defined by law, such as solidarity aid and jubilee awards, and include other contents that are specific to the activity or a company. Workers who are covered by collective agreements are in principle in a better position than those who are not bound by collective agreements. Contracts at the industry level are most often concluded for an indefinite period or for a period of three to five years.

Content and scope of collective agreements

In Serbia, the collective agreement is concluded for a period of three years, but it is the obligation of the contracting parties (employer and union) to negotiate at least once a year on the elements of the basic salary, which is concluded in the Annex to the agreement. The Labour Law defines the obligation to determine elements for the basic salary, which are contracted differently – from the minimum wage at the level of the entire country to the price of work for the simplest job. These amounts are then multiplied by coefficients, points or are contracted in nominal gross amounts by pay grade. However,various irregularities occur in practice. For example, although the law defines that the payment of the minimum wage is not a rule but an exception for an employer who finds himself in financial difficulties, in practice, wages lower than the minimum wage are also contracted. There is no relevant data on the rate of coverage by collective agreements, and it is estimated that it is 55% of companies and institutions. Otherwise, Serbia has not yet ratified ILO Convention 154, which improves the process of collective bargaining in all activities. Despite numerous problems, trade unions in Serbia believe that they must not abandon collective agreements because they are the most effective instrument for regulating the labour, economic and social rights of employees.

The Confederation of Free Trade Unions of Macedonia states that despite collective bargaining and collective agreements, wages are increased at the will of the government as the employer, while in the private sector it is at the discretion of the employer himself – he will increase the salaries when he thinks he should. A very small number of private employers adjust salaries to the increase in the cost of living, and according to the trade union, it is similar in the public sector as well. The Confederation of Free Trade Unions is in favour of increasing salaries through collective bargaining, but claims that the state is doing nothing to stimulate collective bargaining. There is no more precise research and data on the coverage of collective agreements, and it is estimated that the coverage rate in the private sector is around 21 percent. There are many more collective agreements in the public sector than in the private sector, because there is little “union density” among private employers.

In the Federation of Bosnia and Herzegovina, a large number of employers, contrary to the Constitution, laws and international conventions, prohibit union organising itself. That is why a large number of workers are not covered by collective agreements, but are left, as they say in the Confederation of Independent Trade Unions, to the mercy of employers who pay them wages in the amounts they determine themselves. In the trade union headquarters, they state that “due to the complex constitutional arrangement of the Confederation of Bosnia and Herzegovina, it is very difficult to know the exact number of collective agreements that are currently valid”. At the moment, there are 10 valid branch collective agreements, but most of them will expire on December 31, 2023, and it is not certain that new ones will be signed by that date. In sectors where the majority are private business owners, the number of signed collective agreements is negligible. Collective agreements for education, police, communal services, health and administration are concluded for the area of the canton. CITUBH says that the state does not help in encouraging collective bargaining. On the contrary, the impression is that the government is doing everything in its power to completely abolish social dialogue and collective bargaining, so that the biggest challenge for unions is bringing employers to the negotiating table.

The estimate of the Confederation of Trade Unions of the Republika Srpska is that about 35% of workers are covered by collective agreements. There are currently nine special (branch) collective agreements in force in the field of education and culture, higher education and student standards, healthcare, social protection, internal affairs, judicial institutions, public services, administrative bodies, local self-government and for employees of Telecommunications RS. Dozens of collective agreements were also concluded with the employer – in the metal industry, mining, forestry, wood processing, paper industry, postal and air transport, shoe industry, communal services and graphic industry.

In Montenegro, as well as in other countries of the region, there is a significantly higher number of branch collective agreements in the public sector than in the private sector. Currently, 16 branch contracts are in force in Montenegro, and it is estimated that they cover about 57.79% of employees. In the economy, branch collective agreements are signed by a representative association of employers and it binds all employers in that branch regardless of whether the employers are members of the association that is its signatory. In recent years, collective agreements are most often concluded for a period of up to three years. Insisting on compliance with the ILO Convention, which stipulates the state’s obligation to take all necessary measures to encourage and improve collective bargaining, unions have been campaigning for years to prescribe stimulating measures for socially responsible employers who respect the culture of social dialogue and have a collective agreement. However, the state did not recognise the interest in realizing these initiatives.

In Croatia, there are about 580 collective agreements that cover approximately 670,000 workers, or about 47 percent of all employees. The scope is significantly greater in the public sector, where collective agreements cover all public and state services, as well as most state enterprises. In the private sector, there are only two branch collective agreements, for construction and catering (tourism), the application of which has been extended to all employers in those sectors. In the rest of the private sector and the part of the public sector managed by cities and municipalities, collective bargaining prevails at the level of the employer, i.e. the so-called home collective agreements. In most cases, the key topic of collective bargaining is salaries, but unfortunately there are also many contracts that determine only the basis for calculating salaries, while the job coefficients are left to the employer to decide. In the Federation of Independent Trade Unions, they consider this to be one of the two main shortcomings of the practice of collective bargaining. Another problem of collective bargaining is that there are no patterns or regularities in collective bargaining processes, especially in the private sector. Negotiations take place at different times of the year and contracts are signed with different validity periods. Nevertheless, the fact is that a large number of workers, thanks to collective agreements, have higher salaries and that they increase more often than would be the case without unions and contracts.

There are currently 31 collective agreements in force in Slovenia. The Association of Free Trade Unions does not have a detailed analysis of the coverage of workers by collective agreements, and research from 2018 showed that 61.5 percent of collective agreements in the private sector have general validity, which means that they bind all companies and workers in the industry, regardless of membership in organisations, employers who are signatories to the contract. The public sector is specific from the point of view of collective bargaining in that it deals with negotiations with the government or representatives of ministries, so the coverage of the collective agreement at the activity level is guaranteed. By the way, basic salaries are regulated to a greater extent by collective agreements at the company level, while solidarity grants, jubilee awards, compensation for labour costs, annual leave, as well as criteria for determining annual leave, benefits, education, unpaid leave from work and others, are regulated by collective agreements at the industry level. The biggest challenges in the future for unions will be the establishment of a new salary model in the private sector, and above all, the introduction of new content in collective agreements such as lifelong education, the system of qualifications, ensuring the continuity of employment during the green transition, etc.

News on union activities in the region

The Confederation of Autonomous Trade Unions of Serbia reported on the education of its activists held in several cities, which was made possible by the one-year project “Think union – act digitally”, implemented with the help of the European Confederation of Trade Unions.

Confederation of Trade Unions “Nezavisnost” informed about the creation of a unique digital database about their organisation and the launch of the online application “My Workers’ Rights – Independence” for reporting violations of workers’ rights, produced in the project “Trade Unions for a Just Recovery” with the support of the European Confederation of Trade Unions and the EU.

The Confederation of Free Trade Unions of Macedonia announced the signing of a new collective agreement for the preschool sector, which increased the wages of workers in those institutions by 15%.

The information from the Federation of Trade Unions of Macedonia was about the legislator’s decision to accept the trade union initiative and amend the Labour Law so that Sunday would be a non-working day for retail trade employees as well.

The Confederation of Independent Trade Unions of Bosnia and Herzegovina informed about the successfully completed negotiations and signing of the collective agreement for employees in primary and secondary education, and changes to the agreement for higher education.

The Confederation of Trade Unions of the Republika Srpska informed about the adoption of the new Law on Health Insurance, which fulfills the old trade union demand to improve the rights of certain categories of employees during sick leave due to maintenance of pregnancy, medical treatment or care of sick family members.

The Confederation of Trade Unions of Montenegro reported on the seminar “Knowledge about health and safety – the active role of workers” realised as part of the project “Union to the union” which is carried out by the unions of Sweden through the International Confederation of Trade Unions.

The Union of Free Trade Unions of Montenegro announced the news of a mass strike by employees of the state company Telekom, who are demanding a salary increase due to the increased cost of living, with the support of the union headquarters.

The Union of Autonomous Trade Unions of Croatia has informed about the Ninth Congress of the largest trade union organisation in the country with more than 100,000 members, which gathered more than a hundred delegates and adopted a new Action Program for the period from 2022 to 2026.

The news of the Association of Free Trade Unions of Slovenia was also about the most important gathering – the Ninth Congress, where the delegates elected the leadership, adopted the program of action for the coming period, and other trade union documents.

Author of the summary: Svetozar Raković – journalist and editor of website Nezavisnost.org (Editorial board of The voice of the Workers – VoW)