Ljubljana - The government has presented to public sector trade unions a preliminary proposal overhauling the public sector pay system. The sector is to be split into two groups, allowing more autonomy in terms of salaries to institutions funded not only by the state but also by other sources. Unions believe this would lead to disintegration of the pay system.

Public Administration Minister Boštjan Koritnik told the press after meeting unionists on Monday that the first group of public sector organisation, would include those solely dependent on the budget, including state administration, municipalities and social services, among others.

These would be subjected to a binding set of rules of a centrally-led payment system.

The second group would include those also funded by other sources, such as organisations in health care and research. These would get more freedom in setting up their payment system.

The government also wants to encourage a higher share of performance-based pay, more flexibility in setting pay, less red tape and a simpler system.

The government would also abolish the existing evaluation system, saying that most employees are evaluated as excellent and thus get a promotion every three years. It wants to make promotions automatic, but drawn out.

Koritnik said that this would mean employees would reach the highest possible wage bracket in 40 years and not in 15, as is the case at the moment.

The proposed changes do not entail any changes to the existing overall wage bill. The basic foundations of the system would also remain unchanged and binding for all, including composition of remuneration, pay brackets, the height of bonuses and methodology.

It remains unclear what will happen to groups such as doctors, police officers and soldiers, who want to be excluded from the single public sector pay system. On Thursday, the government ordered ministries to examine in 14 days whether any groups in their field should be excluded from the system.

Minister Koritnik said today that the proposed changes addresses the causes prompting many professional groups to want to leave the single pay system. He said changes to the existing legislation would be drafted based on the unions' responses.

However, the unions are not too happy with the proposal, with the heads of both major public sector union associations saying it would undermine the entire pay system. Moreover, they told the STA that the government failed to present convincing arguments for distinguishing between the two groups.

Jakob Počivalšek, the head of one of the biggest union negotiation groups, said that some parts of the public sector would have such a level of autonomy that "in some way they would all be outside the system". He said the government also failed to explain the difference between the two groups and what exactly the dividing line should be.

He also said that the changes would allow employers to exclude unions from defining certain aspects of the pay system. He believes the proposal is a step away from what the pay system was supposed to accomplish.

Branimir Štrukelj, the head of the KSJS public sector union confederation, believes this proposal to be "slapdash lumbering" through a complex system that requires "serious analyses and thought". He said that the government failed to provide good reasoning for the division of the system.

He was also critical that funds for performance bonuses would come from a planned slow down in promotions. The proposal would take funds from everybody to reward only a few. Štrukelj was critical that upon a minister's proposal jobs could be remunerated outside the collective bargaining agreement.