December 12th, 2016
Introduction – SI
In Slovenia, the public sector is relatively big, since statistical data show that, as many as 25% of all employees work in the public sector. At the same time, considerable funds are spent on its operation, and in some areas, especially in the social field, funds are increasing. With regard to the number of employees, the density of the public sector trade unions is high, which is a strength as well as a weakness. In accordance with a general assessment, the procedures of the restructuring of the public sector have not started yet.
When investigating the situation in Slovenia, the representatives of the public sector trade unions pointed out that the public sector services should be improved and that their quality and accessibility should be retained at least at the present level. To achieve this goal, appropriate sources of funding should be found which would enable the public sector to remain public. They propose the following solutions: ensuring more transparency in the operations of individual (all) organizations in the public sector, rationalization and improvement of public procurement procedures, decrease in (un)necessary business trips and ceremonial events, and, above all, ensuring the inflows on the revenue side of public finances. The key challenge, as seen by the trade unions, is to re-establish the social dialogue beginning from a zero starting point, where negotiations will be conducted to achieve “more and better” and not “less and worse”.
The object of the first case study was the Slovenian Competition Protection Agency (SCPA), since the process of restructuring included the change in the status and institutional independence, and consequently, the personnel reinforcement. The process has already been completed, but the SCPA is still financially connected with its founder.
Interlocutors (employees, representatives of the management and representatives of the decision makers – ministries) have mentioned mainly a suitable preparation and implementation of the process of restructuring and provision of information for all stakeholders in the process of restructuring. The preparation itself should encompass an analysis of the influences of the process on all people involved (on users, employees, etc.), cost analysis and an analysis of planned strengths and weaknesses of restructuring. As far as the implementation is concerned, the time component is of key importance. It is very important for a successful process that the time period is long enough, so that all the people involved can be prepared for planned changes and participate with their own suggestions and solutions, the condition being that communication with and provision of information for all the people involved is appropriate, timely and accurate.
The second case study deals with the SPIRIT, Slovenian Public Agency for Entrepreneurship, Innovation, Development, Investment and Tourism, which was established in 2013 following the merger of three previously independent organizations; now, it employs 110 people. Interlocutors (workers, representatives of the employees of the former three organizations, representatives of the management and representatives of the relevant Ministry) emphasized the importance of a well-defined message and goals in the process of restructuring, involvement of all stakeholders, open and transparent internal communication and communication with other publics. To achieve cost effectiveness and eventually the development of employees, it is essential to relocate at least 20% of the employees and to encourage the proactivity of all the people involved.
Public sector in Slovenia
In Slovenia, the expression public sector is used in different senses. In the media, it is most frequently used as a synonym for the government sector (state administration). According to the Standard Classification of Activities (SCA 2008), the following areas are included:
– Public administration and defence, compulsory social security
– Education, – Human health and social work activities
– Arts, entertainment and recreation.
In order for the Agency of the Republic of Slovenia for Public Legal Records and Related Services to monitor the salary system and policy in accordance with the Public Sector Salary System Act, the legislator defined the public sector as follows: the public sector consists of national authorities and self-governing local communities, public agencies, public funds, public institutes and public economic institutes as well as other public entities that are indirect users of the state budget and local community budget.
In 2011, more than 237,000 people were employed in the public sector, which amounted to 25% of all the employed and self-employed people in Slovenia. Slightly fewer than 160,000 out of 237,000 people were employed in the government sector (i.e., 17% of all the employed and self-employed people in Slovenia). In the government sector, employment increased in the period between 2000 and 2011 by 20% and in the period between 2008 and 2011 by slightly more than 3%. Between 2010 and 2011, the number of employees in this sector increased by 679, i.e. 0.4%. The largest increase could be observed in education (1.4%) and human health and social work activities (1.3%), whereas in the activity of public administration and defence and the activity of compulsory social security, the number of the employees decreased by 1.3%.
In Slovenia, more than 77,000 people were employed in companies under public control in 2010. More than a quarter were employed in transport and storage, 15% in financial and insurance activities and 12% in human health and social work activities as well as in manufacturing.
Table 1: Employment in the public sector, 2010 (%)
Source:International Labour Organization (ILO), LABORSTA database; Eurostat
In Slovenia, the salaries in the government sector are more than 20% higher than average, but the educational level of the employees in the government sector is also higher. In 2009 and 2010, the average salaries of the employees in the government sector were by 27.0% and 21.6% respectively higher than the average Slovene salary. In 2010, the government sector employed 56% of the workers with at least higher education (the total in Slovenia being 29%) and 5% of the workers with primary school (the total in Slovenia being 13%). According to the education level, average salaries are higher in companies under public control than in the government sector. The first assessments show that public non-financial companies generate 9% of value added and public financial companies 3% of value added. Together with the government sector, the public sector generates 29% of value added.
Below, the expenditures are shown which have increased most considerably since 2008 and which will be reduced most certainly in the future due to planned austerity measures, i.e., compensation of employees, expenditure on old age (pensions), on unemployment and families and children.
As far as the average of the EU member states is concerned, it is known that the expenditures of the government sector reached their peak in 2009 due to the consequences of the financial crisis (51.1% of the GDP), but they decreased to 49.1% of the GDP in 2011; at the same time, the deficit was also smaller. Slovenia has not yet seen a decrease in expenditures and a decrease in the deficit: the expenditure of the government sector increased to 49.3% of the GDP in 2009, to 50.3% of the GDP in 2010 and to 50.9% of the GDP in 2011 (the deficit being more than 6.4% of the GDP).
A comparison of the data for Slovenia and for other EU member states shows that compared with the previous year, in 2011, the EU member states reduced the expenditure on capital transfers, compensation of employees, investments, social benefits and intermediate consumption and increased only expenditure on interest. In Slovenia, the expenditure on gross investments, intermediate consumption and subsidies decreased, whereas all other expenditures increased – most considerably the expenditure on capital transfers, social benefits and property income payable. In relation to the GDP, more money is spent on social benefits, compensation of employees and gross investments, whereas less is spent on social benefits in kind in
Slovenia if compared with the average of the EU.
In 2011, compensation of employees in relation to the GDP decreased in all EU member states with the exception of Belgium and Slovenia. Compensation of employees represents the whole compensation paid by the employer to the employee for the work carried out. It consists of gross salary and remunerations of the employee (i.e., food money, reimbursement of expenses for coming to work, annual leave reimbursement) as well as of social security contributions paid by the employer. Social security contributions paid by the employer include actual contributions of employers (compulsory and voluntary) and imputed contributions of employers (e.g., sick pay).
In comparison with other EU member states, Slovenia spent more money in 2010 on education and recreation, culture and religion as well as on economic activities and less on social protection, public administration (mostly due to a lower share
of interest) and human health.
Due to the financial crisis, the EU spends more money on social protection; in Slovenia, this expenditure increased to 18.7% of the GDP in 2010. Old age (mostly pensions) requires the highest share of expenditure on social protection, which increased to 10.3% of the GDP in Slovenia in 2011. In the future, the ageing of the population will be the greatest problem in Slovenia. The projections show that expenditure on pensions (according to the COFOG classification, the groups old age, disability and survivors) will increase from 9.9% of the GDP in 2007 to 18.6% of the GDP in 2060 if there are no
changes in the pension scheme (Pension schemes and pension projections in the EU-27 Member States, 2008–2060, 2009). In 2010, the highest expenditure on old age was recorded in Italy, Greece and France (over 13.0% of the GDP), whereas the lowest expenditure was recorded in Ireland and Cyprus (under 5.0% of the GDP).
In Slovenia, expenditure on unemployment and families and children also increased – in 2011, to 1.1% of the GDP due to unemployment benefits. If comparing the EU member states, in 2010, the highest expenditure on unemployment was recorded in Ireland, Denmark and Spain (slightly over 3% of the GDP), whereas the lowest expenditure was recorded in Bulgaria, the Czech Republic and Malta (under 0.5% of the GDP). Between 2008 and 2010, expenditure on family and children also increased considerably in Slovenia from 2.0% of the GDP (2008) to 2.5% of the GDP (2011).
Density and role of public sector trade unions
According to statistical data and the general situation, it is estimated that in Slovenia, the process of restructuring of the public sector has not started yet. In the past, there were some attempts, but they were mostly abandoned at national level. It can be claimed that this is partly due to activities of a large number of trade unions that oppose reforms in the public sector.
In Slovenia, which has a population of about 2 million, there are thiry-three or thirty-four trade unions in the public sector. The representatives of the trade unions believe that the trade unions should be (more closely) connected as they are aware of the fact that only in this way can they be (more) successful in the social dialogue that takes place in the process of the public sector restructuring. At the same time, the trade unions consider this diversity and density as an advantage, since each trade union can justify its viewpoint, its activity, its occupation more thoroughly and with more convincing arguments. This diversity also represents a better or more balanced representation of individual occupational groups in an individual branch of the public sector (health care, education, etc.)
On the other hand, such a situation means that due to their fragmentation, the trade unions are less powerful in the social dialogue or in negotiations with the other party, i.e., the government. The trade unions believe that such a situation suits the state as an employer perfectly since negotiating power of the state strengthens in the social dialogue and the state as a negotiator exploits the fragmentation of trade unions skilfully.
Despite all this, the general public thinks that the trade unions act successfully (in spite of their fragmentation or mostly because of it). Not a single trade union is in favour of the dismantling the welfare state or the public sector as such; they all agree that the public sector, education, health care, culture and other service activities in the public sector should be retained and that it is necessary to prevent such restructuring of the public sector that would result in a decrease in the rights of the trade union members and all the employees in the public sector and last but not least, in the decrease in the (social) rights of all citizens.
The representatives of the trade unions believe that they play an important role and consequently, their responsibility is great, but it can also be greater. In negotiations, the government takes the public sector trade unions seriously. The trade unions are aware of their strength in unity that is why they insist on the following:
- the social dialogue should be held continuously and not after the government has already presented proposals it has formulated unilaterally;
- the social dialogue should be maintained with regard to all issues that are of interest to trade union members and to all the employees in the public sector such as changes in the salary scale, changes in the provisions regarding promotion, long service gratuity, holiday bonus, that means everything arising from the employment relationship;
- the negotiations are necessary in the phase of preparation of any regulations regarding labour law or any other field that can influence the public sector activities, since the trade unions believe that employees have the greatest interest in good (business) operation of their work organization or employer.
The trade unions would like to be involved in the phase of the development or preparation of regulations, collective agreements, etc., since in such a case, the negotiations would take less time and the satisfaction with solutions proposed would be greater. Such cooperation would make solutions more acceptable to a greater number of trade unions and employees in the public sector. To achieve this, the trade unions should first agree on their own interests and should be more closely connected with each other.
Generally, the trade unions do not distinguish between members, non-members and precarious workers and conduct negotiations with the government on behalf of everybody within the framework of the social dialogue. Some trade unions are more aware of the problems connected with precarious workers since precarious workers are more numerous in some branches than in others (cultural professionals, journalists, etc.). They are mostly self-employed, which means that they are their own employers and workers at the same time; they do work and look for new business opportunities at the same time. In the past, some of them already established ties with each other and “a conference of independent freelancers in the field of culture and information” was formed within the trade union representing culture. They mostly point to inappropriate and chaotic circumstances in the field of employment of precarious workers. At the same time, they would like to participate more actively and play a proactive role in preparing collective agreements for the self-employed. Numerous precarious workers belonging to other occupational groups are not connected in such a way and are left to their own devices. The trade unions that are aware of this fact believe that a lot will have to be done in this field in the future.
At the same time, the legislation allows within the framework of particular rights (solidarity support, long service gratuity, Christmas bonus, 13th month pay, etc.) that the employer in agreement with the trade unions grants more favourable rights to trade union members only. As far as other, i.e., fundamental, rights are concerned, the trade unions treat members and non-members equally (also during negotiations).
Restrictions and driving forces of the social dialogue
Restrictions mostly refer to suitable ways of communication. Punctuality, promptness, accuracy and transparency of information are key restrictions of the social dialogue. Topicality and monitoring of the course of events within the framework of the social dialogue as well as familiarity with expected consequences are essential if these restrictions are to be lifted. Another restriction may be the willingness of the relevant institutions to inform the general public and the employees in the public sector and their representatives about their intentions.
The driving forces of the social dialogue are connected with how the situation is perceived in general. If a person is quiet and reconciles himself / herself to the situation which s / he does not try to improve, then everything is lost in advance. And now we cannot but observe the ease with which the workers are losing the rights fought for and not given as a gift in the past. According to the trade unions’ assessment, the government managed to perform a skilful manoeuvre since now it does not negotiate with the trade unions for more and better, but for less and worse. Whenever the government and the trade unions meet, they always agree on something less (e.g., a slight decrease in a certain allowance, its abolishment, a decrease in … benefit, etc.).
The trade unions are aware of the fact that everything is not ideal in the public sector, but they believe that much could be done with better work organization or with greater motivation of employees. Currently, the aim is to achieve rationalization and better efficiency, but not at the expense of services as such and especially not at the expense of curtailing the rights of workers; the services of the public sector should also not become more expensive for this reason.
The trade unions consider dismissals as an extreme measure taken to restructure and rationalize the public sector and they strictly oppose and fight against them. According to the trade unions, other driving forces of the social dialogue, i.e., internal relocation of employees, maintenance of employment, etc., are already regulated by law. They believe that there are no trade unions that would be in favour of dismissals. In the last negotiations with the government, the trade unions negotiated for employment maintenance and not for the decrease in the existing rights. As a result, an agreement was signed that natural wastage would cut the number of employees by 1% and there would be no forced dismissals in the public sector. These are the most important achievements for maintaining the standard of the quality of public services for all citizens, so that these services are accessible to everyone and this should be the key driving force of the social dialogue.
The trade unions believe that health should be the driving force of the social dialogue, which means safe employment as well as safe and healthy work. Healthy individuals are more useful to society; if there are fewer absences from work due to illness, there is also lower expenditure on health care and smaller loss of revenue. All these issues are interconnected. Due to a longer life expectancy and consequently prolonging working life, employees should remain economically active and healthy for a longer period of time. The following arrangement “8 hours of work, 8 hours of rest and 8 hours for hobbies” no longer exists. The employees (including public employees) spend most of the day at work and have (almost) no private life, which is also reflected in their health. The trade unions emphasize this, but the question is if they emphasize it strongly enough. It is also important how such topics are covered in the media. It is true that this aspect is stressed mostly when the trade unions and the government negotiate about the reform of health care, the reform of the pension and disability insurance act, the reform of the labour market, etc. The representatives of the trade unions are, however, aware of the fact that these factors are interconnected and intertwined and they also make this clear. As they assess, the trade unions unfortunately mostly negotiate about the (least) bad possibility and not about a better one.
Within the framework of the social dialogue, the trade unions speak out in favour of more positive effects of restructuring. They warn that all these cuts and restrictions (decrease in salaries, encroachments on wage bill, decrease in different allowances) will not yield satisfactory results unless some other improvements are made (favourable business environment, perhaps taxes on profits in energy companies, rationalization of the public procurement procedures, etc.). The trade unions think that the social dialogue as perceived by the government that believes that everyone should contribute something, should give something, should relinquish something is outdated and inappropriate; the trade unions and the government should talk about “more and better” and not about “less and worse”, and something should be done on the revenue side. Otherwise, this is considered a vicious circle; if any (public or other) employee gets a lower salary, they will spend less, which results in lower productivity of the enterprise sector.
The trade unions believe that negotiations and consultations are a more successful tool of the social dialogue than simply confronting the other party with facts. If the government adopts a decision or takes a measure high-handedly without a prior coordination with the professional public, this is already doomed to failure. An example is a previous pension reform since the government side represented by the then minister of labour did not want to negotiate with or consult the trade unions. In spite of a well-prepared reform proposal, the general and professional public as well as the trade unions resisted the reform, which resulted in a referendum where citizens voted against the reform. A transparent preparation and communication between all parties involved is a better or the best way and tool to reach a consensus during the social dialogue between all parties involved.
Tensions, oppositions and communication in the process of restructuring
Not only in the public sector and among the social partners but also generally, a certain negative orientation is present in Slovenia (it is no longer possible that things will get better), there is too much pessimism and too little hope for a better future. The tensions between the public and private sectors additionally rise due to a psychosis artificially generated by the government or the media stating that the private sector has already lost a great deal in the crisis and that it is now the public sector’s turn to make sacrifices; this way of thinking can be regarded as inappropriate and very short-sighted. The public sector trade unions pose a question why the public sector that is functioning well should adapt to the sector which is not functioning. Will the enterprise sector or the private sector find it easier to generate value added if the public sector also lays off workers?
The fragmentation of the social dialogue can be seen mostly in the unconnectedness of the trade unions and their fragmentation. In Slovenia, there are eight confederations and more than thirty public sector trade unions, which is far too many in these circumstances. However, this cannot be considered just a fragmentation of the social dialogue by individual occupational groups, but a global phenomenon of the fragmentation of values. The old values which we knew in the socialist times no longer exist and the new ones have not been formed (yet).
The social dialogue should also address social conflicts, but also here, the media play a huge (or too small) role. Currently, the general public in Slovenia is mostly preoccupied with stories about anomalies in the construction sector; at the same time, the welfare state and the rule of law fall apart. The trade unions think that this (un)important story may blur the ones that are really important such as public health care, public education, culture, accessibility of services to everyone and any time, healthy diet, health and safety at work. Solidarity is the key value that has been advocated by the public sector trade unions all the time.
The trade unions believe that the users of the public sector services (health care, education, culture and other services), i.e., all the citizens, are not fully aware of the fact that these services are intended for them and that they can / should have an influence on them. People still mostly take their rights for granted, although users or consumers should play a more active role in the social dialogue. The trade unions think that people are not adequately informed and are not aware that they have this possibility and opportunity. At the same time, a dialogue with companies and the private sector should be established, financial outflow to tax haven should be stemmed and the public finance position should be improved, especially on the revenue side.
Public sector as employer
The trade unions believe that the public sector is a good employer, but it could be a better one. It is good because salaries are regular, all other personal incomes are good, legal provisions regarding employment relationship are applied, e.g., breaks, rests, annual leave, health and safety at work. But there are companies in the private sector where everyone wants to work not only because of the salary but also because of care taken of workers in the form of other activities such as a possibility of taking exercises, more thorough preventive health examinations, attendance at sporting and / or cultural events.
The public sector trade unions are greatly concerned that the consequences of the privatization of the public sector would be suffered by everyone (not just by the employees in the public sector). As a rule, the public sector is better regulated, it is less flexible and does not allow any special innovative solutions. It is more standardized, it has more control mechanisms and regulations regarding everything. It is true, on the other hand, that some employees are forced into precarious work (self-employment, contractual work, etc.) because of employer’s cost-cutting, and the public sector is no exception.
The processes of inappropriate restructuring and attempts at restructuring jeopardize the relationships between the employees and the employer. Most certainly, nobody is fond of privatization tendencies under the guise of austerity and cost-cutting. The trade unions think that more recent public sector management theories do not (yet) exert influence on the business operations of the public sector, the rationalization of expenditure and on a more commercially oriented functioning of the public sector. In Slovenia, such management in the public sector does not exist. At the same time, the trade unions are extremely sceptical about it, since the abuse or unethical and immoral use of these mechanisms may quickly result in the private ownership of the public sector and the trade unions believe it is their role to prevent such attempts. The trade unions would put people in the foreground and they would employ people who first see people and only then costs, profit and similar issues to perform important functions in the public sector.
According to the trade unions, the crisis is a convenient excuse for privatization and destruction of public services. It has certainly affected or accelerated some processes of public sector restructuring (health care, education, etc.) which have been necessary regardless of the crisis. But here, the major motivation is chiefly the rationalization of business operation. According to the trade unions, this should always and everywhere be a topic of discussion, and improvements should be searched for. The trade unions think that the underlying issue is a tendency to destroy social property created by all the people in the past who paid voluntary contributions.
Although the public sector is increasingly commercially oriented, the users of the services are not aware of their own (enormous) influence on the commercialization of the public sector. The trade unions think that the citizens still take “free” education, health care and other public sector services for granted, but they are not aware of the consequences if all these services had to be paid for. This is a topic not really discussed in the general public and the media do not sufficiently encourage raising public awareness of this issue. The influence of the users’ interests can, however, be seen in other fields: e-services are more widespread; there are (slightly) fewer administrative obstacles; in the functioning of the public administration, some procedures are more user-friendly.
Under the guise of austerity and for other reasons, authorities try to change some structures / organizations and establish new ones or to reshape, restructure, reorganize and merge the old ones. According to the trade unions, all such procedures are politically motivated and are also perceived in this way. But the trade unions have not noticed any marked influence on the legitimacy of measures.
The public sector as employer does not treat vulnerable groups of workers in a fundamentally different way if compared with other employees and there is no particular interest that they should be dealt with in a special way. The trade unions claim that they have never “protected” only their members, but all the employees (permanently employed workers, members and non-members, precarious workers). However, the trade unions are aware of the legislative option that makes it possible to get some benefits for trade union members and they also make use of this option. The trade unions see the differences mostly in starting points typical of different employment relationships. A key challenge in the future is chiefly the cohesive power of the trade unions when trying to help precarious workers to organize themselves into groups that would speak in favour of their own interests in the negotiation process more easily.
The representatives of the public sector trade unions emphasized the following:
- The public sector should not be privatized, but its services should be improved. The quality of the services that have been carried out should be maintained at least at the present level and appropriate sources of funding should be found which would enable the public sector to remain public.
- The solution is mostly on the revenue side of public finances; public procurement procedures should be improved, better transparency should be ensured in the operations of the public sector, different “trips” and ceremonial events in the public sector should be rationalized, etc.
- The social dialogue should be re-established beginning from a zero starting point and negotiations should be conducted to achieve “more and better” and not “less and worse”. A very bad solution is to look for ways how to bring the public sector near the private one instead of vice versa.