The Slovenia Times

Blueprint set out to repair public sector pay system

The ruling coalition presents a blueprint of reform aimed at making the public sector pay system fairer and more sustainable. Photo: Xinhua/STA

Having opened the floodgates by promising higher wages to some groups of public employees, the government has set out to repair a system that has been the cause of trade unions' grievances for years despite coming at an ever bigger cost to the taxpayer.

Slovenia's public sector employs close to 19,000 people, which government data shows is roughly 13% more than it did in 2015. Meanwhile, the wage bill went up from just over €3 billion in 2008 to over €5 billion in 2021, part of which was due to Covid bonuses. This year it is expected to exceed €6 billion.

Setting out the reform blueprint at a coalition meeting at Brdo pri Kranju on 1 February, Prime Minister Robert Golob said they would start out by eliminating pay disparities. These have resulted from separate wage rise deals that have been granted to one professional group or another.

The prime minister expects an agreement to tackle pay disparities is to be reached by April, while more time will be needed for a more comprehensive reform.

The next step will be to address the lowest earnings. The idea is that there should be no earnings below the minimum wage, currently at €1,204 gross. "It's unacceptable that we have pay brackets below the minimum wage," Golob said.

The government also plans to introduce a 1:7 ratio between the lowest and highest pay. The ratio at the moment is 1:45.

The coalition will also seek a way to adjust public sector pay, the minimum wage, pensions and social transfers in the same way. A separate law and formula is now used to determine each of these, which creates disparities.

The reform of the public pay system will also involve creating several tiers for individual groups of employees, after one for healthcare was announced last year.

These "tiers or sector agreements" are meant to give these sectors at least some autonomy in and responsibility for managing pay ratios within individual tiers, said Golob.

The proposal, which is still open to negotiation with trade unions as well as coalition partners, would create several pay tiers within three groups of public sector employees.

The group of public office holders would have a pay tier for general managers and senior officials. The public servants group would have one tier for the public administration and the other for the police, army, civil protection and firefighters.

Within the group of employees of public institutions, there would be separate pay tiers for culture, healthcare and social care, and for science and research, including education.

"We will do everything for the current spider web system, where a change in a single wage triggers a wave of demands throughout the whole (public sector) system, to be completely eliminated once and for all," Golob said. This should make the system fairer and more sustainable.

Little is known about the cost of the planned reform beyond Finance Minister Klemen Boštjančič saying that a supplementary budget would absolutely be needed to secure sources of funding for reforms this year.


More from Politics