Slovenia on the Crossroad: Increasing Dependence on the Supranational Institutions and the Weakening of the Multiemployer Bargaining System

Thursday, 2 July 2015: 2:15 PM-3:45 PM
TW2.3.04 (Tower Two)
Aleksandra Kanjuo-Mrcela, University of Ljubljana, Ljubljana, Slovenia; University of Ljubljana, Ljubljana, Slovenia
Miroslav Stanojevic, University of Ljubljana, Ljubljana, Slovenia
The background to collective bargaining and the forces of change

In terms of VoC theory (Hall and Soskice, 2001), Slovenia established a coordinated market economyin the 1990s. At that time, the main intermediary interest organisations were relatively strong. The Chamber of Commerce and Industry was based on obligatory membership; the trade union density rate was at 40 per cent (Toš, 1999; 2009), which was above the average level in the old EU member states and significantly above that seen in contemporary candidate countries, i.e. future new EU member states (see: Visser, 2010: 26).

The presence of these robust actors strongly influenced the formation of a centralised collective bargaining system. As the Chamber (based on obligatory membership) was involved in the collective bargaining procedures, the collective agreements reached a coverage rate of almost 100 per cent in the 1990s.

The tripartite interest integration (i.e. the neo-corporatist consensus) ensured a significant temporal advantage for the Slovenian economy in the 1990s. In essence, Slovenian neo-corporatism functioned as a sort of temporal competitive mechanism – “competitive corporatism”, a system of “competitive solidarity” (Rhodes, 1997; Streeck, 1999). The pattern of ‘competitive corporatism’ was based on a combination of two key elements. The first was the systematic wage-restraint policy at the macro level that was in place for more than one decade (Stanojevic, 2010: 340). The second was the permanent intensification and flexibilisation of work at the micro level, within companies, during the same period (Svetlik and Iliè, 2006).

This system enabled Slovenia to approach the EU and the euro-zone rapidly, but – being based on quite excessive work intensification and flexibilisation, it also implied a potential threat to its competitiveness in the post-EU and post-EMU period (Drenovec, 2013).

Specific features of the change process and change strategies emerging from the state

After decade or so the Slovenian system of ‘competitive solidarity’ started to manifest signs of its internal self-exhaustion. That overlapped with Slovenia’s inclusion in the EU and then in the Eurozone in the mid-2000s.

After winning elections in 2004 the centre-right coalition tried to use the shock of the country’s inclusion in the monetary union to justify a radical neoliberal change to the system.

These policies provoked an open conflict with trade unions. At that time, the former obligatory membership of the Chamber of Commerce and Industry was abolished. Under the pressure of rapid privatisation that was triggered at the same time unions started to lose members.   Accordingly, the stances of the main interest organisations then underwent rapid polarisation.

All these processes reveal that the Slovenian IR model had already been exposed to intensive, significant pressures and changes in the years beforethe world crisis reached Slovenia.  Alongside these changes, the emergence of the crisis further undermined the key factors of the social dialogue in Slovenia.

Since 2008/2009, when world crisis hit Slovenia, the system’s reconfiguration has been significantly more supranationally determined. The rising public debt and, accordingly, increasing dependence on the supranational institutions and financial (bond) markets, has been strongly correlated to the growing unilateral implementation of the demands and pressures of these institutions. In terms of these processes, the (still) relatively high share of the predominantly publicly-owned companies as well as the relatively high level of Slovenian labour market regulation, are dysfunctional. A permanent subject of the international institutions’ criticism is thus the ‘rigidity’ of the Slovenian system in general, and especially the labour market’s ‘inflexibility’; with the main responses suggested to address these being privatisation and the public sector and the labour market reforms.

From 2008 until today four different party coalitions have come to power in Slovenia: the first government tried to implement structural reforms (unsuccessful pension reform), the second focused on fiscal consolidation (i.e. salaries cuts in the public sector), the third on the crisis in the banking sector, while the priority of the last one is a ‘political stabilisation’ and fulfilment of the (recently constitutionally defined) ‘golden fiscal rule’. Especially the responses to the crisis in the banking sector have almost automatically deepened the other, already critical problem – the fiscal crisis of the state. All attempts to respond to this problem have caused open social conflicts in Slovenia. The austerity measures in the public sector and the threatening marketization and privatisation of that sector have caused growing public discontent and general resistance implying growing legitimation problemsfor the local (as well as the wider, the EU) creators of the austerity policies.   In short: from the mid-2000s the nature and pace of change definitely are not based on a consensus comparable to those from the 1990s

The extent of the changes and the outcomes

According to the findings of the field research industrial relations in Slovenia did not undergo major changes in their formal structure during the economic crisis. But within the formal structure, which has been exposed to the small, incremental changes, there are clear signs of the major changes in power relations as well as in the logic and quality of industrial relation system. All actors involved in multiemployer bargaining processes are significantly weaker than before: trade unions lost a half of its membership during the last ten years, Chamber of Commerce became voluntary organisation, governments were highly unstable and short lived. For the first time (in 2014) sector agreement in one important sector (chemistry) was not concluded. In reality the bargaining within companies, where employees’ negotiating power is significantly weaker, are more accentuated than before, being frequently combined and/or part of informal company crisis solving agreements.  There is less content in fewer sector collective agreements that are increasingly shorter term. The bargaining coverage rate shrank significantly (for more than 30 per cent already before the crisis reached Slovenia - Industrial Relations in Europe 2012, EC report, 66).