The government and trade unions have reached a deal under which wages in the public sector will be adjusted in June to 80% of the rise in inflation in 2023. In addition, the holiday allowance will be paid out in March rather than June as usual.

The agreement was initialled on 21 December by Finance Minister Klemen Boštjančič and Public Administration Minister Franc Props on behalf of the government, and the chief negotiators for the public sector trade unionists, Jakob Počivavšek and Branimir Štrukelj.

The deal still needs to be endorsed by the government and relevant bodies of the trade unions involved, which is expected to happen after the New Year holidays.

Finance Minister Boštjančič said one of the two key points of the agreement is adjustment of the value of wage brackets to 80% of the rise in consumer prices in the period between December 2022 and December 2023. The rise will apply from 1 June 2024. The second is the payment of the holiday allowance in March.

Based on the autumn projection by the government forecaster of 5.4% inflation this year, the deal will come at the cost of just over €140 million to the state budget next year or €160 million including the payment for December that will be made in 2025.

Boštjančič said the exact amount will be calculated once the annual inflation data are in, in about ten days.

Tougher talks ahead

Both sides believe the deal augurs well for much tougher talks on the wage system reform, which will resume after the New Year's, having become stalled, one of the reasons being that the main government negotiator, Public Administration Minister Sanja Ajanović Hovnik, stepped down in early October, and it took two months for Props to be appointed her successor. Boštjančič stepped in in the meantime.

"The talks have been fair and I hope it's not too optimistic to say that trust that was missing in the recent months has been restored and that this will be a good basis for further, much tougher talks than what we've been doing for the past 14 days," said Štrukelj.

His counterpart Počivavšek pointed out one of the key goals of the new wage system is that no base pay in the public sector should be lower than the minimum wage any more.

The implementation of the pay system reform is to be moved from 1 January 2024 to a date agreed as part of talks. The has government postponed the date due to the August floods.

By signing the agreement, trade unions will agree not to start any strike activities pertaining to the deal until 13 September 2024. The commitment will not apply if the government agrees pay rises with any group of public employees or officials effective before that date.

This may prove hard for the government as the trade union of doctors and dentists has announced a token strike for 9 January, to be followed by general strike starting on 15 January unless their demands are met, including a rise for senior doctors.

Meanwhile, judges and prosecutors are planning to hold protest rallies and even a strike unless their salaries are increased by 4 January as decreed by the Constitutional Court.