Employer organisations have suspended their participation on the Economic and Social Council saying their opinions on major reform proposals are being ignored as ever greater burden is placed on the corporate sector.

The council is the main forum for social dialogue in Slovenia where employers and trade unions contribute their inputs on relevant legislative proposals put forward by the government to reach a compromise before the proposals are subjected to further stages of the legislative process.

"Some ministries don't understand social dialogue, turning it into social monologue and we cannot and will not participate because we've been reduced to the role of observers," Marjan Trobiš, the head of the Employers' Association, said at a joint press conference of business organisations on 21 July.

Two laws key points of contention

The employer organisations pointed to two legislative proposals in particular; the law on long-term care, which they sought to stop with a veto in the upper chamber that the lower chamber overrode, and the draft labour relationships bill, which entered a public consultation period without having been endorsed by them.

The employers have been against the bill reforming the law governing labour relations where the government proposes introducing the possibility of a 30-hour work week and reducing the scope of agency workers a company can hire.

They also oppose the plan to raise part of the funding for long-term care with a 1% levy on gross wages, which both employees and employers will have to pay starting from 1 July 2025. 1% will also be levied from net pensions.

They say amendments to the income tax act were passed without prior consultation, the rules governing occupational diseases had not been discussed at all before entering into force and the government has still not come up with measures to ease conditions for doing business and cross-border services.

New social charges to make economy incompetitive

The employers argue piecemeal solutions are adopted, while new financial and administrative burdens are imposed on businesses.

"Under such terms our economy cannot be competitive. The government should not see and treat the economy as a burden but realise it's a source of budget revenue," Trobiš said.

Tibor Šimonka, the head of the Chamber of Commerce and Industry, expressed concern about the financial impact of reform laws coming on top of an already high tax wedge.

Slovenia's industrial output has been in decline and action should be taken, as a slump in demand in Germany will result in further contraction, he said.

Until they see a comprehensive estimate of the financial consequences of reform proposals, "we're not going to consent to the economy being burdened with additional contributions," Šimoka said.

"We have nothing against an increase in a certain contribution, but this must be offset with a reduction in some other contributions."

Similarly, Blaž Cvar, the head of the Chamber of Trade Crafts and Small Business, called for holistic approach to reforms so they "do not end up being an additional burden on the economy".

Mariča Lah of the Chamber of Commerce said revenue in the retail sector was lagging behind expenditure, a situation which the sector "will not be able to sustain much longer".

She criticised the government's food monitoring measures and failure to compensate fuel retailers for price caps. She also pointed to difficulties faced when hiring foreigners.

Govt finds move unwarranted

Government representatives find the arguments unconvincing. The prime minister's office said social dialogue was ongoing, noting that PM Robert Golob had pledged a further effort to improve it earlier this year.

"The government is working for adoption of sustainable laws that will contribute to greater prosperity of the citizens while trying to strike a balance between the positions of trade unions and employers," the office said.

Considering their position that social dialogue is ongoing they see the employers' move as "part of a strategy to prevent the passage of laws that increase our citizens' prosperity".

Labour Minister Luka Mesec believes the step is a tactical move by the employers designed to prevent changes in the fields of long-term care and employment laws, which he said was unacceptable.

Social dialogue suspended before

The employer organisations will not return to the industrial relations forum until "we have established a tripartite social dialogue on equal terms in our country that is in compliance with the Economic and Social Council's rules".

Social dialogue was also suspended under the previous government, when trade unions quit alleging the government was disregarding the council's rules. Social dialogue then resumed under the current government in July 2022.

Lidija Jerkič, the head of the ZSSS, the country's largest trade union association, was not surprised by the employers' move, commenting that it had been whispered about ever since the new centre-left government took office in June 2022.

She admitted that dialogue over the long-term law had been conducted passed the rules, but said this had been resolved, while neither side was happy with all aspects of the labour relations law. She thus urged the employers to return to the negotiating table.

Branimir Štrukelj of the KSJS trade union of public employees said his first impression was the employers' exit was an exaggerated move.