EurWORK European Observatory of Working Life

Latvia: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe

About

Country: 
Latvia
Author: 
Kriss Karnitis
Institution: 
EPC Ltd.

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The new Latvian energy strategy till 2030 is built on four pillars: security of supply, competitiveness, renewable energy resources and effectiveness in energy use that are developed in nine sub-directions. The main changes have affected the state owned JSC Latvenergo. The company was divided in five enterprises in two steps so that production of electrical energy was separated from its distribution. The trade union has followed the process through collective bargaining; nevertheless the total number of employees in companies after transformation has been reduced. New enterprises have appeared in the renewable energy sector, yet the produced amount has not increased remarkably and employment effects are insignificant.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

  • Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?
  • Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?
  • Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?
  • What is the Government stance and what are the ongoing/envisaged action towards generation of electricity from the different broad groups of sources: nuclear /fossile /renewable energy?
  • What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossile/renewable energy? Please indicate development since 2005 with reference to generation, disribution, and sale separately.

Policy and plans for change towards electricity production

The highest level policy document – the Sustainable Development Strategy of Latvia until 2030 envisages five priorities in energy sector: exploring of renewable energy resources (creation of local renewable energy market); increasing effectiveness of energy use; ensuring security of energy supply by diversifying energy sources and suppliers; innovation and research in energy; energetically effective and sustainable transport.

On 1 August 2006, the Cabinet of Ministers approved The Principles of Energy Sector Development 2007-2016 - a policy planning document that sets forth main principles of the Government policy, goals and directions of actions in energy sector and long-term development trends.

In 2011 the Ministry of Economics who is responsible for energy policy in Latvia announced drafting of a new energy strategy – Latvia’s energy strategy until 2030. The need for a new strategy is due to faster than foreseen change in energy consumption where demand exceeds supply, and the general situation in the energy sector. It is necessary to formulate more precisely the national position regarding the most important items in energy sector for longer time period.

The targeted energy mix for the future

The Electricity market law (adopted on 5 May 2005) sets forth that the share of electrical energy that is produced on the basis of renewable resources in the total final consumption of electrical energy is set by the Cabinet of Ministers regarding each kind of renewed resources for each five year period so that up to 31 December 2010 it is not less than 49.3% of total final consumption (Para (2) Article 29. This norm is neither fulfilled nor amended.

The new Latvia’s energy strategy until 2030 respects the priorities of the long term development strategy. It is built on four pillars: security of supply, competitiveness, renewable energy resources and effectiveness in energy use that are developed in nine sub-directions.

Figure 1 reveals that the total consumption is provided equally by production and imports. The primary electrical energy is produced by hydro electrical stations and wind stations (marked as Production). Part of this is exported in peak production periods (springs, intensive raining periods). Part of obtained energy is consumed for production of heat in cogeneration stations (marked as Energy sector) that also produces electrical energy (marked as Transformation sector). In the transformation sector the major contributors are cogeneration stations of general use.

Figure 1. Production, imports, exports and consumption of electrical energy in Latvia, GWh

Figure 1. Production, imports, exports and consumption of electrical energy in Latvia, GWh

Source: Central Statistical Bureau of Latvia database (www.csb.gov.lv)

The share of renewable energy resources in supplies of primary energy has increased from 13.1% in 1990 to 32.5% in 2010. The goal is to achieve that in 2020, 40% of the total final consumption of energy and 10% of the final energy consumption in transport (0.9% in 2008 and 1.4% in 2009) is produced from the renewable resources.

Planned steps for implementation of the Strategy (reaching targeted energy mix) include elaboration of two action plans – for the period of 2011 – 2015 and for the period after 2015.

The first plan will focus on short term goals that are set forth in EU level and national level energy policy documents.

The second plan will include measures that shall be performed in nine strategic sub-directions:

  • to expand alternative sources of supply,
  • to facilitate market of electrical energy and natural gas,
  • to reduce imports of electrical energy and natural gas from the third countries,
  • to develop international connections and the state system of energy transportation,
  • to elaborate terms for delivering of qualitative and competitive service for consumers,
  • to support attractive investment environment, using instruments of energy policy,
  • to increase efficiency of energy use, in particular in living and public houses and transport,
  • to provide grants’ support for facilitating of efficiency of energy use and use of RES,
  • to increase share of RES consumption in production of electrical energy and heat, and in transports,
  • to propose amendments in the tax policy in order to support wider use of RES in energy sector,
  • to investigate and expand extraction and use of local recourses (biomass, biogas, peat),
  • to facilitate development and implementation of new technologies by increasing funding of research and science.

The network development

The network development is envisaged and focused on diversification of energy suppliers and sources in order to increase security of energy supply. The Latvian market of electrical energy is seen in the context of Baltic and EU markets, ensuring secure energy supply. Amid this purpose investments are focused on establishing of interconnection links. Major investment projects are: Kurzemes link in 2018; Latvia – Estonia interconnection link in 2020, EstlinkII, Nordbalt in 2014-2016, Latvia – Belarus interconnection link.

The ongoing/envisaged action

In the energy sector the main problems are high the dependence on imported fuel (Figure 1), decentralized heating, poor technical condition of heating systems and low effectiveness of energy use.

It is envisaged that the demand for electrical energy will be covered on the basis of local production, Visagina AES (Lithuania) and other suppliers. The largest portion of final energy consumption (60%) will be provided by fossil fuel. The renewable energy is planned to provide 40% of final energy consumption. Building of the nuclear energy plant in Latvia or in Lithuania on the basis of cooperation is discussed for several years, but it is not envisaged in the energy balance for future.

Based on local resources, main sources for renewable energy production will be hard biomass (timber), biogas, wind and hydro power.

Employment trends by subsectors of power generation

Data on employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossil/renewable energy, and separately in generation, distribution, and sale is available since 2008, when the Central Statistical Bureau of Latvia (Latvijas Republikas Centrālā statistikas pārvalde, CSP) introduced NACE 2 classification system. Unfortunately, data is not comparable before and after 2008.

Tables 1 and 2 provide employment data available from CSP.

Table 1. Number of employed according to the main sector of economic activity (without employees who were in statutory child care leave)

Sector NACE 1.1 ed.

NACE 1.1.code

2005

2006

2007*

2008*

Extraction, processing and agglomeration of peat

10.30

1940

2040

1957

2005

Production of electrical energy

40.11

6252

5428

3267

1801

Distribution and sale of electrical energy

40.13

458

445

1986

3559

Supply of steam and hot water

40.30

7592

7052

6726

6726

Source: CSP Summary Annual Report, prepared according to the main sector of activity of the merchant.

* In June 2007, JSC Sadales tīkli was separated from the JSC Latvenergo (NACE 1.1.ed. 40.11) and obtained status of independent enterprise in (NACE1.1.ed. 40.13).

Table 2. Number of employed according to the main sector of economic activity

Sector, NACE 2. ed.

NACE 2.ed. code

Number of enterprises, October 2011

2008

2009

Extraction of peat

08.92

49

1980

1994

Production of electrical energy

35.11

275

1801

1867

Supply of electrical energy

35.12

4

   
Distribution of electrical energy

35.13

25

3514

3115

Sale of electrical energy

35.14

11

45

46

Supply of steam and air conditioning

35.30

249

6726

5960

*Data in breakdown by sector for 2010 will be available in end of 2011.

**Annual average number of employed on basis of working contract, without employed who were in statutory child care leave.

Source: CSP

1.2. Government policy for increase of the share of renewable resources according to the RES directive

  • Are any subsidies being granted for different types of RES for electricity providers? If yes, please provide briefly the details
  • Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disporportionate use of subsidies, etc.)? Please provide brief details.
  • Are there any other forms of support foreseen for promoting electricity generation of RES?
  • Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

Subsidies for different types of RES for electricity providers

Direct subsidies to producers do not exist, but some groups of producers are granted price and market preferences, established by the Electricity market law.

The law sets forth that a producer who produces electrical energy on the basis of renewable resources is granted the right of guaranteed supply and special price regime that is set by the Cabinet of Ministers on the basis of a complicate calculation.

Producers who explore electrical power stations with less than 1 MW and use biomass or biogas for production are granted a guaranteed price for installed electrical power.

The foreseen support policy is focused more on promoting of the process from the demand side rather than from the supply side. In other words, not production, but consumption is promoted in new RES support policy. It is planned to introduce until 2020 technologically neutral state payments for the production of renewable energy (regardless whether it is cogeneration of biomass, or wind station) that shall be reduced so that only fiscal and emission market factors determine the price after 2020. In the medium term, the support for reconstruction of heating systems will be applied. This direction is seen as more effective; therefore direct state grants for energy production will be reconsidered in future.

In transport the tax policy and increasing norms on a compulsory bio fuel mix will be applied.

Up to now, the costs of subsidies are covered by Latvenergo, more precisely, incorporated in Latvenergo tariffs. These subsidies are not cut.

Other forms of support foreseen for promoting electricity generation of RES

Several measures are implemented, funded through EU Structural funds projects. These are: measures for increasing of efficiency of centralised heating systems (started in 2009); measures for improving efficiency of undertaking’s heating systems (started in 2011); and development of cogeneration stations based on use of renewable energy resources (started in 2009).

Promotion measures that are covered by EU structural funds projects are dependent on the state budget policy as far as concerns their co-financing. These measures were specifically promoted during the crisis and did not suffer from the crisis, budget constraints, or any policy revision.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

There are no studies on employment effects of transformation of energy sector. The Internet site of the Ministry of Economics displays more than 20 studies on topic of energy policies, expanding of production and use of renewable resources. Several studies are prepared in the Riga Technical University (Rīgas Tehniskā universitāte, RTU). These studies concern mainly technical aspects of change in energy policy and energy mix, including different quality aspects.

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

There is one strong trade union in the energy sector – Trade Union Energija (Latvijas Arodbiedrība “Enerģija”, LAB “Enerģija”) which is deeply involved and consulted as concerns the governmental energy policy.

In the social dialogue, employers are represented by four larger companies: JSC Latvenergo, JSC Latvijas elektriskie tīkli (former JSC Augstsprieguma tīkli), being members of the national level employers’ organisation Latvian Employers’ Confederation (Latvijas Darba Devēju konfederācija, LDDK), and JSC Sadales tīkli and JSC Pārvades sistēmas.

Small companies are represented by many associations: Latvian wind energy association (Vēja enerģijas asociācija, VEA), Small hydro energy association (Mazās hidroenerģētikas asociācija, MHEA), Latvian biogas association (Latvijas Biogāzes asociācija, LBA), Latvian thermogasification association (Latvijas Termogazifikācijas asociācija), Latvian biomass association LATbio (Latvijas biomasas asociācija LATbio, LATbio) and several other less active organisations (Latvian National Geothermal association (Latvijas Nacionālā Ģeotermālā asociācija, LNGA), Solar Energy association (Saules Enerģijas asociācija, SEA). There are two more public organisations, dealing with energy issues more general: National Energy Confederation (Nacionālā enerģētikas konfederācija) and International association ENERĢIJA (Starptautiskā asociācija ENERĢIJA). National Energy Confederation unites smaller associations and represents the energy sector in negotiations with the government.

None of the small employers associations is a member of LDDK, and do not have the status of employers’ organisation set by law.

The trade union not only monitors the situation in relation to employment impacts – number of people employed and wages, but also analyses causes of possible employment impacts. The involvement is on a structural, permanent basis in the policy planning period and on a stage of legislation developments.

Consultation takes place at all levels - national, sector level, and at the initiative of individual companies. There is a special tripartite national level social dialogue body for such consultations – the National Tripartite Cooperation Council (Nacionālās trīspusējās sadarbības padome, NTSP). Specific electric energy sub-council of NTSP does not exist.

Employers may discuss energy issues deeper in framework of the Council of the National Economy with the Ministry of Economics. This format is foreseen for discussion with social partners (national level trade union and employers’ organisation is represented in this council), yet the discussion concerns chiefly business issues. The Council has its energy subcouncil, where LAB Enerģija is represented. Social partners also organise individual meetings with ministers and participate in debates in national parliament Saeima.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)

Electricity production companies are not ranged in Latvia, neither in general, nor by types or market shares. We provide informal selection of the best known companies.

Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

Latvenergo

518 (total in production, division by kind of resources not available)

2010

Private

Several thermo electricity cogeneration stations basically generating heat for cities: Liepājas TEC, Daugavpils Siltums etc.

n.a.

 

n.a.

       
NUCLEAR

None

     
       
       
HYDRO

Latvenergo

518 (total in production, division by kind of resources not available)

2010

Private

Cirīšu HPP

1-5 (micro enterprise)

2010

Private

Spridzēnu HPP

1-5 (micro enterprise)

2010

Private

WIND

Latvenergo

518 (total in production, division by kind of resources not available)

2010

Private

Baltic Wind park (informal group of several SME-wind station all owned by the same owner)

n.a.

 

Private

       
BIOMASS

Ludzas Bio-Enerģija

n.a.

2010

Private

 

n.a.

 

Private

 

n.a.

 

Private

PHOTO-VOLTAIC

None

     
       
       

There are 275 enterprises registered under NACE.2 code 35.11 – Production of electrical power.

The state owned JSC company Latvenergo is the main producer of electric energy in Latvia. In total, approximately 70% of the electricity generated by JSC Latvenergo comes from renewable and environmentally friendly energy sources, whereas the remaining electricity is generated by combined heat and power plants working in cogeneration mode. Other electricity producers supply energy into Latvenergo networks. Some of them produce energy as a side product (for instance, landfill Getliņi EKO).

Table 3. Production of electrical energy on the basis of renewable resources
   

1990

1995

2000

2005

2006

2007

2008

2009

2010

Total

4496

2937

2824

3414

2787

2828

3213

3555

3635

4496

In percent of total production

100

100

100

100

100

100

100

100

100

100

In percent of total consumption

56

57

61

62

53

49

56

69

82

56

Hydroelectric stations, total

4496

2937

2819

3325

2698

2733

3109

3457

3520

4496

..< 1 MW

0

3

25

57

36

63

64

60

70

0

..1 MW to 10 MW

0

0

0

5

4

6

6

6

6

0

..>10 MW

4496

2934

2794

3263

2659

2665

3038

3391

3444

4496

Wind stations

0

0

5

47

46

53

59

50

49

0

Biomass electric stations

0

0

0

6

7

5

5

4

9

0

Biogas

0

0

0

36

36

37

40

44

57

0

..electric stations on basis of landfill gas and other biogas

0

0

0

26

27

28

31

35

46

0

.. electric stations on basis of sewage sludge gas

0

0

0

10

9

9

9

9

11

0

Source: CSP database

Latvenergo owns the cascade of the river Daugava hydro electrical stations and is the largest producer of electric energy from hydro resources. Other hydro stations are built on small rivers and their contribution to total production is insignificant. There are about 40 wind stations in Latvia, giving all together 1.3% of electrical energy, produced on the basis of renewable resources, among them also wind station of Latvenergo (Table 3). 33 wind stations belong to enterprise group, amalgamated under the code name Wind Park. Biogas and biomass electric stations together produce 1.8% of electrical energy, produced on the basis of renewable resources.

2.2 Please provide an overview of the current oganisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

According to data from the Company register 4 companies are registered under NACE.2 code 35.12. Supply of electricity (transfer of energy from production facilities to distribution systems), and 25 companies are registered under NACE.2 code 35.13. Distribution of electricity (operation of distribution systems from production or distribution systems to final consumers).

The market of electrical energy is open, but the infrastructure is owned by Latvenergo. Two independent operators provide access to the Latvenergo network for any company who wish to distribute (sell) electrical energy regardless where it was produced, and the prise for network use shall be equal to all users.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Electricity distribution companies are not ranged in Latvia, neither in general, nor by types. Therefore we provide an informal selection of the largest companies.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

JSC Sadales tīkli

2552

2010

Private

JSC Latvijas Elektriskie tīkli

493

2010

Private

       

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

Since 2008, major developments are connected with the restructuring of Latvenergo. Impact of the state support program for development of small electricity companies and consumption of electricity produced on the basis of renewable resources is not important. A large number of projects was started and licenses granted for the production of electrical energy from renewable resources, yet the result is modest (Table 3).

In the first step, JSC Sadales tīkli (distribution company, independent company) and JSC Augstsprieguma tīkli (supply company, part of Latvenergo concern) were separated from the JSC Latvenergo (production enterprise). In the second step, JSC Augstsprieguma tīkli was divided into JSC Latvijas elektriskie tīkli (part of Latvenergo concern) and JSC Pārvadu sistēmas operators (independent company). JSC Sadales tīkli was divided into JSC Sadales sistēmas operators and JSC Sadales tīkli (independent companies).

Employment has declined. Before transformation (in 2001), Latvenergo employed 6701 employee. The employment figure for all companies of former Latvenergo concern was 4563 employees in 2009 and 4372 employees in 2010. The figure includes two companies, JSC Sadales tīkli and JSC Augstsprieguma tīkli.

The status of employees has not changed – both those working in state owned companies and in private ones are employed according to private labour law.

Special social plans were not made, but the impact of changes was foreseen in collective agreements. Identical collective agreements were concluded with all enterprises derived from the former Latvenergo and adjusted to the second step transformation. The agreement envisages special provisions in case of restructuring of enterprise, including social measures: the employer is requested to safeguard jobs and to provide social support if a person is made redundant.

3. Industrial relations in the electricity sector: Actors

4. Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

Latvenergo

Latvenergo represents itself in LDDK

LAB Enerģija represents only Latvenergo employees

   
   
NUCLEAR

None

None

None

   
   
HYDRO

Latvenergo

Latvenergo represents itself in LDDK

LAB Enerģija represents only Latvenergo employees

Cirīšu HES

None

Spridzēnu HES

None

WIND

Latvenergo

Latvenergo represents itself in LDDK

LAB Enerģija represents only Latvenergo employees

Baltic Wind park

None

   
BIOMASS

Ludzas Bio-Enerģija

None

None

   
   
PHOTO-VOLTAIC

None

None

None

   
   
And in the distributing companies

Distribution GRID

companies

JSC Sadales tīkli

JSC Sadales tīkli represents itself in LDDK

LAB Enerģija

JSC Latvijas Elektriskie tīkli

JSC Latvijas Elektriskie tīkli represents itself in LDDK

   

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

The general condition is that trade union organisations are established in large enterprises, namely, in Latvenergo and enterprises that diverged from Latvenergo. Division by subsectors follows the division of companies derived from the large enterprises. For instance, in distributing companies that diverged from Latvenergo there are trade union organisations, while in those which have appeared independently from Latvenergo new trade unions rarely exist.

In order to eliminate the impact of the crisis LAB Enerģija agreed with Latvenergo on changes of some items of the collective agreement. LAB Enerģija promised to postpone their requests for wage indexation due to inflation and some on norms regarding additional holidays on the condition that the company promises to postpone measures that might cause redundancies. Despite the agreement the company fired 600 workers. The case was not classified as collective redundancy because workers agreed to leave the company voluntarily and to receive social benefits laid down in the collective agreement.

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

Trade union LAB Enerģija is holding the position as main trade union organisation with about 4500 annual membership. LAB Enerģija unites 21 trade union organisations, of which 8 are organisations within Latvenergo enterprises. The membership has declined from 6700 members in 2001 to the current membership, also amid the reorganisation activities. It may be added that in 1992, LAB Enerģija represented 28 thousand members from the energy sector, among them also producers of electrical equipment.

Splits and mergers have not occurred in the sector during the last years, however, the structure of trade union organisations have changed at company level amidst restructuring.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

Only lately some new trade union organisations have claimed to represent employees in the sector (Latvian united members trade union (Latvijas apvienoto biedru arodbiedrība, LABA)). These organisations usually are not based within a particular enterprise or sector. Activities of these new trade unions include legal assistance in disputes rather than day to day support. These trade unions are rarely involved in collective bargaining and are not members of the national level social dialogue partner – the Free Trade Union Confederation of Latvia (Latvijas Brīvo Arodbiedrību savienība, LBAS).

Before the last reorganisation, employers were represented in the national level employers’ organization by two companies – Latvenergo and JSC Augstsprieguma tīkls. It is expected that after reorganisation new organisations will also join LDDK.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

LAB Enerģija consistently work with the newly emerging parts of the sector. Recently two new trade union organisations have joined LAB Enerģija, one of which represents the energo-construction sector. The results are limited regarding the newly emerging sector, because the majority of new enterprises are very small with 2-5 employed people. Some of them joined trade unions as individual members.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

  • At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?
  • Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

Collective agreements are not publically available and thus we can not provide a subsectoral breakdown - traditional providers/newly emerging providers. Identical collective agreements are concluded at company level in former JSC Latvenergo enterprises represented by LAB Enerģija, therefore there is no difference between the producers and the distributors.

Information about collective agreements in other enterprises is not available. Sectoral level and/or inter-sectoral level agreements are not concluded, because there is neither an explicit definition of the electrical sector nor employers’ organisation representing the entire sector.

70% of workers in enterprises covered by LAB Enerģija are trade union members. The collective agreement, once agreed, relates to all workers in enterprise. In enterprises, covered by LAB Enerģija, there are no differences in coverage across different subsectors of electricity production.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

  • Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

There are no collective agreements at sector level. The process has started on renewal of existing collective agreement at company level, identical to all former JSC Latvenergo companies. Regarding pay, the new agreement requires to revise company’s pay policy and system. The system is used in order to enable trade unions to control promises of employee. The collective agreement includes stipulations regarding working time, including conditions of aggregated working time, overtime work and night work. Compensations are envisaged for employees who have been involved in accidents or amid their death. Supplementary benefits are envisaged depending on the number of years worked in the company when the employee resigns.

In the electricity sector, pay levels are slightly higher the national average. Differences across subsectors of the electricity industry cannot be seen.

4.3. Cooperation between the social partners and government

  • Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.
  • Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?
  • Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?
  • Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

The social dialogue has been active in the energy sector prior and after 2008. It can be initiated bythe government, because the law requires consultation with the social partners in any legislatory step.

Since 2008, new bipartite and/or tripartite bodies dealing with specific issues of the electricity industry have not been created.

Since 2008 there have not been any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government. Trade unions have expressed their attitude towards employment impacts of restructuring by organising picket at the Latvian Saeima.

Social partners have been involved in the making of the national action plan to reach the 2020 target, and in issues aiming to secure the supply of enough electricity.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

Leaders of Energy criticise the restructuring plans because of negative employment effects and rising prises. Enerģija suggested that the state companies first and foremost should safeguard jobs in difficult times such as during the crisis, and avoid large restructurings that entail jobs losses. People that are fired from the legal employment move to illegal employment.

The second complain regards outsourcing of functions to private enterprises. Enerģija supports the view that such outsourcing may occur when it is economically reasonable, but not in a technocratic way, as it is done in the framework of current reforms. These results in multi-step deals where different actors want to earn money in each of steps so that the final price increases.

There are not “real” employers’ organisations in the sector. Multiple associations have expressed shared views of reorganisation depending on their narrow interests.

5. Commentary

On the basis of the current analysis we see that adoption of EU and national level legislation and promoting measures (including investments in the commercialisation of renewable energy) regarding the increasing share of energy from renewable sources have led to appearing of more actors in the sector and new modes of energy production. Still the new sector is small compared with the traditional one (in Latvia a large portion of the traditional sector already includes production from renewable resources). Some of the expected tendencies, for instance a more decentralised energy production, is achieved.

On the other hand, appearing production units are small, with some 2-5 employed people, therefore expected employment effects, such as the net growth of jobs, reshuffling of job opportunities across sub-industries and regions were not observed. Problems like re-skilling of established workers, provision of adequate basic sectoral skills, the need for spatial besides occupational mobility was insignificant amid the small scale. It is true that the newly emerging renewable energy industries develop different (and sometimes worse) working conditions.

The new energy sectors are scrambled, because their organisation is subjugated to the government promotion policy towards small units. Employment effects are not the target of enterprises in the new energy sector. Social partnership practically does not exist in the newly emerging part of the energy sector.

Raita Karnite, EPC, Ltd.

References.

Persons contacted

  • Jevgēņija Stalidzāne, Latvian Trade Union “Enerģija”
  • Paulis Barons, Latvian wind energy association (Vēja enerģijas asociācija, VEA), phone: +37129411216
  • Aivars Nātre, Small hydro energy association (Mazās hidroenerģētikas asociācija, MHEA), National Energy Confederation, phone: 37126517194
  • Didzis Palejs, Latvian biomass association LATbio (Latvijas biomasas asociācija LATbio, LATbio) (interwiew in Dienas Bizness 7 February 2011).
  • Data obtained on:
  • Latvian biogas association (Latvijas Biogāzes asociācija, LBA),
  • Latvian thermogasification association (Latvijas Termogazifikācijas asociācija),
  • Solar Energy association (Saules Enerģijas asociācija, SEA),
  • National Energy Confederation (Nacionālā enerģētikas konfederācija)
  • International association ENERĢIJA (Starptautiskā asociācija ENERĢIJA)