The National Assembly has passed the legal basis for the most far-reaching reform of Slovenia's public sector wage system in 15 years, which is to be phased in by 2028 at the cost of €1.4 billion.

Affecting around 190,000 public employees, the bill entails pay rises for both the lowest and top earners, with the former benefiting first and the latter most substantially in nominal terms.

The bill, passed on 24 October, follows an agreement capping two years of negotiations between trade unions and the government. Meanwhile, talks continue to iron out outstanding issues and classify jobs in pay brackets for individual groups of professions with the hope of reaching a final deal by 15 November.

Lowest pay raised to minimum wage

The whole system will be divided into 67 base pay brackets with the margins between them reduced from 4% to 3% and the ratio between the bottom and top one increasing from 1:4.8 to 1:7.

In what has been lauded as a key improvement, the lowest monthly base pay will be bumped up to meet the country's statutory minimum wage at €1,254 gross without the need for additional payments. The highest pay is set at €8,821 gross.

Another notable change is the systemic adjustment of wages for inflation. This has thus far largely depended on agreements between the government and individual unions, leading to only sporadic adjustment, a key reason for the lowest salaries falling below the inflation-adjusted minimum wage.

Easier career promotion

Career progression will be made easier, in particular for young employees and those coming from the private sector. In the first ten years of service, employees will be promoted by one bracket every two years, over the next ten years by one bracket every three years, and later by one every four years.

Those achieving above-average results will be able to climb the pay ladder faster, while under-performers may see their promotion put on hold. Like so far, it will be possible to climb up to ten pay brackets.

Moreover, performance bonuses as well as the holiday allowance will increase. A laxer approach will also be taken to professional qualifications.

The pay rises will be phased in over the coming three years. They will be the most substantial for officials, with the top bracket pay for instance rising from €6,088 to €8,821 gross.

Talks continue to reach final deal

Before the reform can come into force on 1 January 2025, trade unions and the government still need to sign some additional documents.

The two sides have already initialled a collective bargaining agreement for the whole sector, which details certain bonuses, including for work at less convenient hours or days, and extra pay for staff with above-average workloads, as well as a basic mechanism to level up wage imbalances.

Negotiations also continue at the level of three of the five pillars or groups of professions, the state administration, education and culture, and health and social care.

Branimir Štrukelj, the head of the KSJS trade union confederation and the teachers' union SVIZ, says that important issues are still open and both sides should put in the effort to reach a compromise.

Discontent among some groups

There has been discontent in the group that includes uniformed professions with police and army trade unionists threatening industrial action, and doctors have been refusing to negotiate as part of the health and social care group.

However, Jakob Počivalšek, the leader of the other group of public sector trade unions, says no agreement can make every individual or group happy, but needs to be supported by a large enough majority to be acceptable.

There is also discontent in the group of public office holders, which is not subject to union talks and whose salaries are determined directly by the public sector pay law.

There, all mayors will get a pay rise of 50%, and some even more, but the mayors of municipalities with a population of less than 5,000, which represent over half of Slovenia's 212 local communities, feel their salaries will still be too low and the gap to those in bigger municipalities will expand.

In response to their grievances, the opposition Democratic Party (SDS) put forward an amendment for municipal councils to set mayoral wages themselves, but the coalition majority voted it down.

The party criticised the reform bill as a populist move, noting that no employees get less than the minimum wage as it is, while also noting criticism coming from some of the trade unions.

The deal that is the basis for the reform has been signed by 30 out of 47 trade unions, representing 80% of public employees.

The collective bargaining agreement for the whole sector and those for professional groups to be signed by 15 November. If the deadline is not met, the government has pledged to annul the new public sector wage law.