Social Pacts in Slovenia
1990s
Background
1989 marked the beginning of independence for the Republic
of Slovenia. The economy was experiencing depression, associated with
the transition to a market economy. It would require many proactive legislative
changes and the inclusion of social dialogue to facilitate the newly-established
market economy, and later, to meet the requirements for European Union
(hereafter EU) accession.
The law on Employment Relationship (1989) defined the relationship
between the employer and employee as contractual, thus giving importance
to the Collective Agreement. The 1992 Constitution also recognized and
reinforced this relationship by enumerating specific aspects of the business
relationship. Provisions include, inter alia: freedom of association,
the acknowledgement of property rights, the promotion of job creation,
the right to employee participation and the right to strike.
Despite these and other legislative changes during the
early years of transition, inflation and other economic indicators signalled
serious problems. EU accession was the challenge facing the Government. While
the International Financial Institutions (IFIs) called for cautious macroeconomic
policy—which included running a budget surplus to help create business
confidence and supporting disinflation—the ramifications of these policies
would have the potential to affect real wages as well as employment creation.
Subsequently, the Economic and Social Council (hereafter ESC) was established
by tripartite agreement in order to address these socio-economic issues
by incorporating the views of the social partners in broad national agreements
and wage policies. The ESC would be comprised of 15 members, five from
each of the employer associations, trade unions, and Government, and would
function at the national level.
In 1995, the ESC produced its first broad social agreement,
known as the Social Agreement of 1995, which was followed the year
after by the Social Agreement of 1996. Both agreements outlined
wage policies as well as a greater socio-economic plan for Slovenia, incorporating
elements of education, social security and monetary policy, while specifying
measures for implementation for each social partner. The agreements served
as an effective reinforcement to the collective bargaining system, especially
in the creation and implementation of incomes policy—a dominant issue due
to the increase in related strike activity during the period 1985-1997.
In addition to these broad-based agreements, there were
also five wage agreements put forth by the ESC. Throughout the process
of socio-economic transformation, the Parliament has considered the opinion
of the social partners to be instrumental; the social partners would be
asked to put forth an opinion on all acts that pertained to their interests
prior to the acts’ Parliamentary hearings. Thus, regular consultation
was achieved through the social dialogue mechanism of the ESC.
With the representation of all social partners in the policy-making
arena, the Government was able to pursue a stringent monetary policy. Since
1995, inflation has been below 10 percent, and GDP has grown 3-5 percent
per annum, a rate that has, at times, surpassed the EU average.
In April 2003, the broadest social agreement thus far was
presented by the social partners, known as the Social Agreement for
the Period 2003-2005. This agreement discussed many of the previous
goals of the earlier agreements, such as wages and inflation control, but
went further by including social security, health and safety, as well as
the enhancement of labour opportunities for youths.
Slovenia will become an EU member on 1 May 2004.
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