Ljubljana - The government and public sector trade unions have reached an agreement on wages, a combination of across-the-board pay rises and selective measures benefiting those with the lowest pay. The deal is worth EUR 611 million this year and next, Public Administration Minister Sanja Ajanović Hovnik said after the agreement was initialled on Thursday.

All wages will rise by 4.5% next month, and in April the majority of public sector employees will be promoted by one pay bracket, which equals a pay increase of roughly 4%.

The second increase does not include employees in health and social care, whose wages rose in November last year.

The daily lunch allowance, which is untaxed, will go up from EUR 4.94 to EUR 6.15.

A follow-up holiday allowance - the annual was paid in summer - will be tilted to those with the lowest wages and will be progressively smaller the higher the salary.

It will range from EUR 300 for those at the bottom of the pay scale, to EUR 100 for those at the top.

Minister Ajanović Hovnik expressed satisfaction with the deal since past interventions in the pay system had caused serious anomalies.

The negotiations will continue, focusing on those in the bottom third of the pay scale, who are currently below minimum wage, she said.

Branimir Štrukelj, who heads the SVIZ trade union of teachers, said the deal tackled the most acute issues but had merely created conditions to start "tackling issues that are much more demanding than the issues we have resolved now."

Jakob Počivavšek, who heads one of the two negotiating groups of public sector trade unions, was hopeful that "we have managed to at least slightly calm the tensions in the public sector, which are driven by both inflation and wage disparities."

The task ahead is however daunting. "This was merely the first step, a minimum that indicates in which direction future talks will head," he said.

While the deal is acceptable for the majority of the trade unions, it does not entirely resolve all pay disputes in the public sector.

Separate negotiations are currently under way with trade unions in healthcare, and even there doctors want separate treatment since they insist they want to exit the single pay system covering the entire public sector, which the government opposes.

Health Minister Danijel Bešič Loredan said today the government will produce its proposal by Monday and it would include provisions covering doctors' pay.