EurWORK European Observatory of Working Life
New chamber for construction subcontractors
On 5 July 2011, a new employer organisation for the Slovenian construction sector (ZGS) was founded on the initiative of a group of subcontractors. It now competes with the old reformed ZGS, which has been accused of not supporting the subcontractors when they organised several protests across Slovenia against the state-owned motorway company DARS, which owes them €9 million for completed work. The subcontractors decided to leave the old organisation and found the new ZGS.
About the new organisation
On 5 July 2011, a group of subcontractors in the construction sector founded a new chamber, or employer organisation. The new Chamber for the Construction Sector (ZGS) is a sectoral employer organisation and as such is independent and not a member of any umbrella organisation.
At the founding general meeting, delegates elected Mirko Požar as the organisation’s first president. He is President of the Association of Subcontractors of Final Works in the Construction Sector and the Director of the subcontracting company Mipo.
According to an article by Radio and TV Slovenia (in Slovenian), Mr Požar said that membership of the new chamber will be open to all construction companies. Members will pay a ‘competitive’ fee that will depend on their turnover in the previous year.
Lack of support as reason for forming new chamber
Mirko Požar said the old ZGS had not done anything to support subcontractors in the construction sector when some of them organised protests in different regions of Slovenia to protest, for example, about the treatment of subcontractors working on the Prekmurje regional highway. This was why he and others had decided to leave the chamber and found the new ZGS.
He is best known by the public as the organiser of the highway closures, when subcontractors were protesting against the state-owned motorway company DARS which owes subcontractors €9 million for completed work. Mr Požar told the press about a new protest meeting that would take place on the highway in the Primorska region.
DARS is a joint-stock company established by law and entered in the companies’ register on 7 December 1993. On 1 January 1994, the Republic of Slovenia transferred the management of all existing motorways, as well as relevant infrastructure and plants, to DARS. It in turn assumed the right to collect motorway tolls to provide the income necessary to manage and maintain Slovenia’s motorway network, and to build new roads.
The ‘old’ reformed chamber
The old Chamber for the Construction Sector (ZGS) continues to exist as a subsidiary of the Chamber of Commerce and Industry of Slovenia (GZS).
The old ZGS was reformed in May 2006, when the Slovenian parliament adopted a new Law on Chambers of Commerce and Industry (LCCI), making company membership of the Chamber of Commerce and Industry of Slovenia voluntary rather than compulsory (SI0606019I).
Until May 2006, Slovenia had a system where all enterprises and craftworkers were organised in ‘chambers’ controlled by the state, and membership was obligatory. This contravened the conventions of the International Labour Organization (ILO), which provide for freedom of association for employers and workers.
The old ZGS stresses that it is impossible for it to deal with the direct recovery of unpaid debts, because specialised companies are dealing with these matters. However, it strives for changes in legislation and elsewhere to solve problems that exist in the construction sector, especially the issue of unpaid subcontractors.
Asked whether potential members could pursue their interests better in the new ZGS than the old, Alenka Avberšek, Executive Director for Legislation at the Chamber of Commerce and Industry, said that according to legislation the new ZGS would have to fulfil demanding criteria before it can become representative. Because it is not yet representative, it cannot represent its members in national-level tripartite social dialogue, whereas the old ZGS can represent these interests. She admitted that some members could leave the old ZGS and become members of the new chamber.
The changes in the structure of employer organisations are partly the result of a deep and overwhelming crisis in the construction industry in Slovenia, which is more serious than previous crises (SI0207102N). Construction sector output has dropped in Slovenia much more than in the rest of the EU and the value of completed construction works continues to fall. Big companies are in serious trouble and many have to close down.
As a result, any subcontractors that have not been paid may become bankrupt.
Boštjan Vasle, Director of the Institute of Macroeconomic Analysis and Development (IMAD), believes the crisis in the construction sector is not over. In a report in the Slovenian Economic Mirror (5Mb PDF), he says redundancies are expected to increase in the second half of 2011, which will boost the number of unemployed in Slovenia.
During the transitionary period from communism in Slovenia, changes in the social and economic system were accompanied by changes to the structure of the employer and trade union organisations. New organisations came into being and old ones were reformed as they competed for members. When trying to persuade potential members to join them, the old organisations stressed their representativity, the number of members they had and their expertise. New organisations questioned the legitimacy of the old ones by pointing out that their membership had been built up in times of monopoly and compulsory membership. The arguments today do not differ much and the new ZGS questions the legitimacy of the old ZGS in much the same way.
Štefan Skledar, Institute of Macroeconomic Analysis and Development (IMAD)