2 Employee Reppresentation and Industrial Relations

2.1. What are the rules relating to trade union recognition

Trade unions acquire legal personality on the day of the issuance of the decision on the retention of the statue or other constituent act.

The decision is for trade unions on the state level issued by the competent Ministry or administrative unit authority. Only representative trade unions may participate in collective bargaining on industrial level. Certain conditions regarding the number of members and the manner in which they conduct their activities must be fulfilled for recognition of representativeness.

2.2 What rights do trade unions have?

Trade unions negotiate collective agreements, and have the right to be informed about all company matters that could affect employees’ rights and obligations and may participate in different procedures against employees (such as for the termination of employment contracts, their role is rather important in case of the dismissal of a large number of employees). Also, prior to adopting any act laying down the organisation of work or the responsibilities of employees, such act must be presented to the trade union that has the right to give an opinion on such act, and which must be taken into consideration by the employer. Also, trade unions have the right to appoint their representative in the company and the employer must grant the trade unions with the conditions for the quick and efficient performance of their activities.

2.3 Are there any rules governing a trade union’s right to take industrial action?

Yes, the Strike Act governs employees’ (trade unions’) right to take industrial action in order to achieve economic and social rights and interests arising from work. The right to strike shall be exercised only under conditions set forth by the aforementioned act.

2.4 Are employers required to set up works councils? If so, what are the main rights and responsibilities of such bodies? How are works council representatives chosen/appointed?

Employers are not required to set up works councils. Works councils can be set up by the employees in companies employing more than 20 employees. The members of a works council are elected via secret and direct elections by the employees with active voting rights, excluding management executives, procurists and members of their families. Their mandate is limited to four years, however they can be re-elected. Works councils, among other roles, ensure the implementation of laws, collective agreements and different agreements concluded between the employer and works council; they also have the right to be informed on many company matters, have co-determination rights on many issues and may appoint their representatives in companies’ bodies such as the supervisory board or board of directors.

2.5  In what circumstances will a works council have co-determination rights, so that an employer is unable to proceed until it has obtained works council agreement to proposals?

There are certain matters that demand the consent of the works council, namely the basis for deciding on the use of annual leave and decisions on other absences from work, criteria for evaluating the work performance of employees, criteria for rewarding innovation activities within the company, disposal of the housing fund, holiday and other employer’s facilities, as well as criteria for the promotion of employees.

The works council must decide on the consensus within 8 days upon the receipt of a certain matter. Should the works council not inform the employer on its decision, it is considered that the works council has given its consensus to the employer’s proposal.

2.6  How do the rights of trade unions and works councils interact?

In many instances, members of a works council are also members of the trade unions. Their rights supplement each other. The legislation has divided their rights and obligations in order to enable the best possible protection of the employees; they interact only in so far as to ensure sufficient protection of the employees if one of them is not organised within a company. Trade unions as opposed to works councils are usually very active not only on a company level but also on an industrial level.

2.7 Are employees entitled to representation at board level?

If a works council is not formed within a company, no representation at the board level is possible. Works councils may nominate their representatives to the supervisory board (which shall consist of at least one third, but not more than half, of all members of the supervisory board) or to the board of directors (which must consist of at least one representative of the works council), depending on a one- or two-tier management system.

SOURCE: Employment & Labour Law 2012, ICLG

Authors: Miha Mušič, Vladka Plohl