By: Vida Kocjan
The Economic and Social Council (ESS) was established on April 25th, 1994, and its thirtieth anniversary is overshadowed by one of the biggest crises of social dialogue to date. Tripartite social dialogue has found itself in a serious crisis during the current government’s tenure. The government is now in the spotlight, but it talks a lot and promises even more, yet does very little. That is also the balance sheet of its two-year (in)activity.
Over three decades, the ESS has significantly contributed to the successful implementation of economic and social reforms in transition processes, in the integration into the EU and the international economic arena. The areas of ESS operation include: concluding social agreements, social rights and rights from mandatory insurance, employment issues and labour relations, the system of collective bargaining, prices and taxes, the economic system and economic policy, legal security, cooperation with the International Labour Organisation and the Council of Europe, employee participation, trade union rights and freedoms, and other matters relating to economic and social affairs.
Never before has it been so bad
Social dialogue in independent Slovenia has never been idyllic. The Economic and Social Council (ESS) is composed of representatives from trade unions, employees, and the government, each of whom has different expectations and sees challenges in different areas. Periods have been varied in their demands, with some even being crisis-ridden, but never before have we seen a crisis like the one, we are witnessing now.
During the time under the ruling coalition of the Gibanje Svoboda, SD, and Levica, we could say that it was almost idyllic compared to previous periods. However, despite the coalition promising something else two years ago, social dialogue is not functioning. Everything was supposed to run smoothly – even faster than expected, as Robert Golob predicted.
The government does things its own way, there is no dialogue
Then the dialogue quickly faded away. The ESS collapsed in mid-July 2023 when employers withdrew from it. They cited government violations of ESS rules as the reason for their withdrawal, including the adoption of legislative proposals, which was supposed to happen independently of the ESS. Since then, the tripartite social dialogue has been frozen.
At a meeting with Prime Minister Robert Golob last week, the trade union, employer, and government sides agreed to prepare a cooperation protocol. They are still in the process of preparing the protocol, and once it is signed, the ESS is expected to reconvene. According to the Minister of Labour, Luke Mesec, “ESS could reconvene as early as May”, as he put it. However, since Mesec emphasises “could”, there may be strong doubts about the government’s continued effectiveness in resolving social dialogue.
Days of regret, not joy
Similar sentiments were also expressed in the business sector. The Executive Director of the Chamber of Commerce and Industry of Slovenia (GZS) for social dialogue, Mitja Gorenšček, assessed during a meeting with journalists that the purpose of the meeting with the Prime Minister was “more about celebrating the anniversary of the functioning of the ESS than about serious negotiations on how to re-establish social dialogue”. In connection with this, he emphasised: “We believe there is nothing to celebrate; these days are days of regret that we are not capable of overcoming our differences.”
He reiterated that employers froze social dialogue last July due to “serious violations of the ESS rules” and that their demands for the signing of a protocol on the rules of the council and equal treatment were never fulfilled. He also added that the results were not influenced by the working groups for changes in laws regulating the record of working hours and taxation. Representatives of the GZS initially did not intend to participate in the meeting with Golob, but they changed their minds.
Simič: “People are afraid”
In general, it is considered that businessmen are quite lenient towards this government during its rule. This was also the opinion of several participants in the discussion organised by the Economic Forum of the SDS party in Ljubljana last week. It was led by former Minister of Economy and President of the Economic Committee of the Strategic Council of the SDS, Zdravko Počivalšek. The task of the government, politics, expert public, and representatives of the economy should now be to create stable, predictable, and economically favourable conditions. “We need to establish a system that will allow us to respond quickly and effectively to shocks, to address the real and specific needs of the economy,” said Počivalšek.
He warned that on the one hand, we must not suppress the economy with additional taxes, and on the other hand, there is no need to provide additional assistance when conditions are good. The fundamental challenge for the economy is to improve productivity. De-bureaucratisation is necessary, as also pointed out by tax expert and former director of the Financial Administration of the Republic of Slovenia, Ivan Simič, emphasising that there are not many options for this. “The current government has done nothing in two years in terms of de-bureaucratization, and there has been insufficient warning from the business sector,” he warned. “People are afraid because if they expose themselves, they will have problems, as they will be targeted, fined, and so on,” Simič added. Former Finance Minister Janez Šušteršič also assessed that the economy is not being heard enough.
Responsibility lies with the government
Former Minister of Labour Andrej Vizjak (2012-2013, i.e., in the second government of Janez Janša), who was the last to successfully pass two major reforms related to pension and labour legislation, emphasised to STA that social dialogue is a demanding and responsible task. It takes time to coordinate legislative proposals and set deadlines. Negotiations, he said, must be intense, taking place at least three times a week for four hours each.
Vizjak stressed that negotiations must be led by a minister with mandates and principles accepted by the government “and not some bureaucrat”. The negotiator must establish a sense of truly desiring balanced solutions, rather than negotiating just for show and ultimately accepting a predetermined solution, he warned. “It is crucial to carefully listen to the demands or interests of all parties, extract the key demands, and find common interests or demands,” he explained. He added that each party must achieve a certain success in key demands at the end of negotiations “to justify a successful conclusion to the negotiations in their base”.
In his view, the current conflict arose because the government of Robert Golob did not begin the social dialogue “with a desire for cooperation, respectfully, taking into account the equal interests of all parties”. He particularly accused Minister of Labour Luka Mesec of unequal treatment. “This was already clear when appointing a representative of Levica party as Minister of Labour. This unfortunate choice is the cause of all the problems because it involves too much favouritism towards the demands of employees and unjustified disregard for the demands of employers. Respect and trust were not established with employers, indicating a willingness to listen and consider their demands,” Vizjak said. Employees also sensed this.
Andrej Vizjak also warned that during this government’s tenure, many important legislative and sub-legislative acts bypassed the ESS, “which is very bad and unacceptable for successful social dialogue. Employers and unions are not at all responsible for the situation that has arisen”. “Employers have realised that it makes no sense to cooperate in this way, and I agree with them. If the government continues with this practice, the ESS will not function,” added the former successful Minister of Labour Andrej Vizjak.
OZS: Economy is running out of time
The issue of social dialogue and the attitude towards the economy was also discussed last week in the management board of the Chamber of Craft and Small Business of Slovenia (OZS). Vice President of OZS, Peter Pišek, stated that they miss the government’s ear for the economy. “For us, it is not important whether the government is left or right; what is important is that it works in the interest of the economy, which fills the state treasury,” he emphasised.
“Just waiting for things to get better is not an option. The economy is running out of time. It is already known where the burdens on the economy will be,” emphasised Bogdan Oblak, President of the Chamber of Craft and Small Business from Logatec. Some other members of the OZS management board also believed that they should take a stronger stance in front of Prime Minister Robert Golob. OZS will present the demands of crafts and entrepreneurship to the Prime Minister and the ministers at the May forum related to crafts and entrepreneurship. Will it be better then? Most likely not.
ESS not functioning, missed opportunity
The Confederation of Trade Unions of Slovenia stated in a press release that the establishment of the Economic and Social Council 30 years ago was a historic event. It significantly contributed to making Slovenia today fundamentally different, notably much better than it would have been without a developed tripartite social dialogue, which has taken place within the ESS throughout the years. It played a decisive role in adopting measures and legislation that increased the welfare of Slovenia’s residents and social justice by preventing the widening of social disparities. In recent years, however, the ESS has been facing significant challenges in terms of its operation. It does not strive enough to achieve acceptable compromises, and reaching consensus among social partners is becoming increasingly difficult and rare.
They pointed out that the ESS is not functioning at this time, and the tripartite social dialogue is paralysed, disabled, where it exists, it is left to ad hoc coordination, without clear rules and standards. The longer this situation persists, the harder it will be to restore its functioning. There is concern that in the absence of the ESS, Slovenia will continue down the wrong path, which includes more or less improvised and unsystematic socio-economic policies of recent years. All participants in the ESS should be aware that tripartite social dialogue is more important than any individual organisation, a member of the ESS, therefore more important than the short-term and even medium-term partial interests of any individual organisation. It also transcends the mandate of any individual government and has a long-term impact on the conditions for the development of the country and society. This realisation should guide every stakeholder in the dialogue to make efforts to restart the ESS as soon as possible. They added that Pergam is committed to social dialogue within the framework of the ESS, actively participating in it since its establishment, thus being very aware of its importance, added value, and the consequences of its inactivity. Finally, they emphasised: “The thirtieth anniversary of the existence of the ESS is passing with a bitter taste that the ESS is not functioning and that abandoning its potential at a time when Slovenia faces significant reform, and other challenges is a missed opportunity.”