2004 Annual Review for Bulgaria

Source: Executive Agency General Labour Inspectorate

Pay

According to the National Statistics Institute (NSI), the average increase in earnings in the first nine months of 2004 stood at 6.5%, compared with 6.1% in the whole of 2005. The overall conclusion of the majority of macroeconomic analyses is that an ongoing trend for incomes growth to fall behind GDP growth continued in 2004. Government incomes policy for 2004 may be described as restrictive. This approach influences directly the largest part of income. The statistics indicate that almost 70% of employees today work in enterprises and organisations paying an average monthly wage of no more than BGN 300 (EUR 150).

Trade union studies indicate that 2004 was another hard year for pensioners. It ended with a fall in the value of pensions of between 2.5% and 2.6%. In 2004, there was a wide discussion regarding the method of indexation of pensions in the future. The social partners and the National Social Security Institute suggested the so-called 'golden Swiss rule', under which the annual inflation rate and the growth of social security income influence the annual indexation of pensions equally. However, parliament rejected this proposal and decided to index pensions in a way giving greater weight (75%) to the inflation rate and less weight (25%) to the growth of the average monthly social security income. This means that the differential between earnings and pensions will widen. Further, people with low pensions and consumption and thus limited to basic goods and services may become even poorer if prices rise significantly after the Bulgaria’s accession to the EU.

Working time

Some trade unions continued demands throughout 2004 for a gradual decrease of working hours from 40 to 35 a week. However, the initial view of all employers’ associations was that it is too early for Bulgaria to discuss the introduction of a seven-hour working day. The Ministry of Labour and Social Policy (MLSP) insists that this discussion should be between employers and trade unions and for the time being is not getting involved in the debate.

Trade unions believe that cutting the level of working hours is a tool for raising the price of labour and creating new jobs. Taking such an approach, according to the trade unions, will have several positive effects:

• the price of labour will increase;

• overtime work will decrease;

• new jobs will be created; and

• employment will become more flexible.

However, the employers’ view is diametrically opposed - they believe that reducing working hours will make companies less competitive. Bulgarian employers also stress that during the years remaining until Bulgaria’s accession to the EU, they will have to allocate enormous resources to improving working conditions and meeting EU environmental requirements. These expenses have to be met by every employer that wants to be competitive on the EU market. If, during the same period, weekly working time is reduced, this would put employers under even more financial strain.

Even though it is in its infancy, the discussion has, according to commentators, highlighted several crucial points in the views of the parties on the issue of working time reduction:

• despite the fact that they were the initiators of the idea, trade unions do not yet have a specific proposal on how to phase in working time reduction;

• trade unions have not supported their proposal with large-scale research on workers’ views on working time reduction;

• the impact of reduced weekly working hours should be assessed not only with regard to large and medium enterprises but also micro-enterprises;

• the immediate opposition of the employers towards reduced working hours has not been supported by efforts to improve the organisation of working time. A significant number of employers in Bulgaria are still trying to raise their productivity by increasing working hours (mostly using overtime), instead of by introducing new technologies.

Job security

The issue of job security is being brought to the fore by large-scale privatisation exercises across the economy (BG0409101F). Trade unions have been concentrating their efforts on ensuring job guarantees and fighting for decent pay and working conditions for employees of the organisations undergoing privatisation. For example, in May 2004, trade unions engaged in negotiations with the Ministry of Energy and the Privatisation Agency over the employment and industrial relations terms to accompany the privatisation of energy companies. The unions demanded major pay increases and a freeze on job losses. However, the negotiations proved difficult and the unions organised protest actions (BG0405202F).

Similarly, September 2004 saw a number of protests by employees of the state-owned tobacco group, Bulgartabac. The workforce and trade unions were concerned about the employment and social consequences of the group's planned privatisation (BG0410102N).

Equal opportunities and diversity issues

There were no significant collective bargaining developments in the area of equal opportunities and diversity in 2004. However, there were a number of legislative measures and government actions in this area, summarised below.

Protection against discrimination

The new Law on Protection Against Discrimination, in force since 1 January 2004, protects against discrimination all natural persons, associations of natural persons, as well as legal persons on the territory of the Republic of Bulgaria, against discrimination on the grounds of sex, race, nationality, ethnic origin, citizenship, origin, religion or belief, education, opinions, political affiliation, personal or public status, disability, age, sexual orientation, marital status, property status, or on any other grounds, established by the law, or by international treaties to which the Republic of Bulgaria is a party. The law transposes almost all EU Directives related to protection against discrimination.

The law prohibits:

• direct discrimination (open discrimination on any of the above grounds, which the discriminator clearly states);

• indirect discrimination (an apparently neutral attitude towards people showing certain characteristics that has the effect of placing them in a less favourable position than to persons who do not possess those characteristics);

• incitement to discrimination; and

• presumption-based discrimination (when a person is ascribed a feature that the person does not possess and due to the presumed existence of this feature the person becomes an object of discrimination).

The law provides that the defendant and not the plaintiff should prove their innocence - ie reverses the burden of proof.

Equal opportunities for people with disabilities

There are around 265,000 people with disabilities in Bulgaria (2001 data). Some 90,000 of them are more than 90% permanently disabled; 106,000 are 71% and above permanently disabled; and 69,000 are 50% permanently disabled.

During the past few years the number of disabled people registered at the Labour Offices and seeking employment or training has been growing, Around 15,916 registered people were disabled in 2003 (average annual figure), an increase of 30.1% on 2002. The proportion of disabled people in the total number of unemployed people is 3.0% (up from 1.9% in 2002). A specific occupational feature of this group is that most do not have a speciality. The opportunities for employment for people with disabilities are limited and they have little opportunity to work in non-subsidised jobs, especially in the case of those who are 71% disabled and above.

Most registered disabled job seekers are disabled by a general illness, meaning that they have a reduced work capacity of between 50% and 70%. They are the most numerous group among all disabled unemployed people. To a large extent, they have preserved their work capacity and therefore it is easier to find jobs for them, with the exception of jobs where heavy physical work is required. These people with disabilities have greater chance of succeeding on the labour market.

The next-largest group of disabled people is those with an injury that reduces their mobility. These make up around 20% of the total number of disabled people. It is difficult for them to find an appropriate job, and even if they do, they often cannot take it due to lack of accessibility.

The proportion of people with mental and psychological disability registered as job seekers is about 11% and these people find it hard to find work. Employers are often reluctant to recruit them and their only opportunity for work is usually specialised enterprises and/or work at home.

In order to increase the opportunities of people with disabilities, in 2004 a National Programme for Employment and Vocational Training of Disabled People was approved. Its main objectives are:

• to create opportunities for the training and retraining of disabled people;

• to provide subsidised jobs for disabled people; and

• to support employers in adapting and equipping specialised jobs for disabled people.

Gender equality

At the end of 2004, the government approved a national plan to encourage equality between men and women for 2005. The aim of the plan is to unite the efforts of the institutions in implementing a policy for equal opportunities for women and men in all areas of social and economic life. It involves actions in various areas, promotes equality in access to healthcare and education, and wider involvement in decision-making, and aims to improve public information and to remove stereotypes regarding the roles of women and men.

Some of the measures in the plan include efforts by district and municipal governments in developing regional projects for the employment of women and stimulating training and access for women from the Roma minority to secondary and higher education through special assistance by social workers and pedagogical teams. The plan also envisaged the establishment of consultative and expert teams with the active involvement of the social partners and non-governmental organisations in the drafting of laws and regulations in that sphere. The finance for the national plan will be allocated from the budgets of the various institutions.

A National Council on Equality of Women and Men was established in 2004. This is a body for consultation, cooperation and coordination among government bodies and non-governmental organisations in developing and implementing a national policy on equality of women and men. It is chaired by the minister of labour and social policy.

An International Labour Organisation (ILO) study has found that Bulgarian women work eight hours per week more that women in the EU on average and that Bulgarian men work four hours more than men in the EU on average. Bulgarian women receive 24% lower wages than men. However, if they are in the same position in state-owned enterprises, men and women receive the same wage. Around 30% of Bulgarian entrepreneurs are women.

Training and skills development

There were no significant collective bargaining developments in the area of training and skills development in 2004.

The majority of the workforce consists of people with high-school educational attainment only - 55.7%. Some 23.4% are university graduates, and 20.9% have completed only primary or lower school. Employers believe that most high-school graduates are not sufficiently prepared for the labour market and that vocational school graduates do not have practical skills and experience. The curricula do not take into account the needs of the economy for staff with special education and vocational training. These and some other factors contribute towards high rates of youth unemployment - 26.8% for the age group 15-29, compared with an EU average of 15.8%.

Considering that workforce skills levels are of the utmost importance for the improvement of competitiveness, in 2004 the Ministry of Labour and Social Policy and the social partners aimed additional efforts and resources at improving the employability of the workforce. Some EUR 14 million were spent during the year for training of about 50,000 people. The maximum amounts of funds allocated for education, scholarships and travel expenses were raised. In line with European practice, apprenticeships in real jobs with genuine employers were introduced during the training of unemployed people, in order to apply skills in a real environment.

Legislative developments

In June 2004, parliament passed a number of amendments to the Labour Code, covering matters such as the content of employment contracts, redundancy procedures, women's night and overtime work, overtime pay and parental leave (BG0408101N).

A significant amendment to the pension scheme, adopted in 2004 and enforced as of 1 January 2005, involves the abolition of the granting of disability pensions due to general illness to people who already receive an old age and length of service pension (BG0501101N). Until now, if a person was receiving a pension for permanent lost work capacity due to old age, this person could also apply for a disability pension and receive a second payment again for permanently lost work capacity. These applications for a new, second pensions were often made in order to increase the cash payments received from the National Social Security Institute. This amendment does not apply to labour accident or occupational disease disability pensions.

The organisation and role of the social partners

New trade unions and employers' organisations were recognised in 2004, adding to the social partner groups involved in tripartite cooperation at national, branch and regional level, together with the government (BG0412102F).

Two new representative employers’ organisations - the Bulgarian Employers’ Association and the Bulgarian Industrial Capital Association (BICA) - joined the four that had been in existence for the past 10 years - the Bulgarian Industrial Association (BIA), the Bulgarian Chamber of Commerce and Industry (BCCI)., the Union of Private Bulgarian Entrepreneurs Vazrazhdane (UPBE) and the Union for Private Economic Enterprise (UPEE).

At the beginning of the year, there were two representative trade union confederations, both members of the European Trade Union Confederation (ETUC) - the Confederation of Independent Trade Unions in Bulgaria (CITUB) and the Confederation of Labour Podkrepa (CL Podkrepa). In November 2004, the government recognised as representative the United Trade Unions Association Promiana (Promiana).

This situation indicates a trend towards the fragmentation of social partner organisations. Over less than a year, they increased by 50%, from six representative organisations (two trade union and four employers’ organisations) to nine (three trade union and six employers’ organisations). The new representative organisations included in the tripartite cooperation process will arguably complicate the work of the dozens of national, industrial and territorial social dialogue structures.

The process of coordinating the views of employers’ bodies on significant issues may now become more complex. Census data on employer representation reveal a widespread phenomenon of double or treble membership by the same employer in several representative employers’ associations.

The recognition of a new representative trade union organisation strained the relations between the government and the two main confederations. At the end of 2004, both confederations appealed against this decision of the government in the courts.

Industrial action

2004 saw the largest-scale trade union protests in Bulgaria in the last 12 years. In October-November, CITUB and CL Podkrepa organised protest actions and strikes throughout the country, culminating on 10 November in a protest meeting of 30,000 people in front of government offices (BG0412203F). A protest declaration, including the specific demands of CITUB and CL Podkrepa, was handed over to the President of the Republic and the cabinet. The unions claimed that there is lack of national bargaining on some urgent social problems, and were concerned about the 2005 state budget, which is seen as including inadequate social provisions, and about the effects on workers' rights of a memorandum signed by the government and International Monetary Fund. CITUB and CL Podkrepa called a national one-hour warning strike on 18 November 2004. According to the national strike committees of CITUB and CL Podkrepa, more than 417,000 union members and sympathisers from various companies, departments and institutions participated in the one-hour strike.

Employee participation

No changes regarding the information and consultation of employees are reported.

Absence from work

No data are available on recent developments in dealing with absence from work.

Psychological harassment

No systematic data are available on bullying and psychological harassment at work.

New forms of work

There were no changes in this area in 2004.

Other relevant developments

Analyses of audits by the Labour Inspectorate during the first nine months of 2004 show that most violations of labour law concern health and safety at work - 76% of all violations. Other violations concern employment relations. The data on injuries at work during 2004 are as follows:

• total number of labour accidents - 3,197;

• total number of fatal labour accidents - 75; and

• total number of labour accidents causing disability - 74.

Compared with the nine months of 2003, there were 429 fewer accidents during the first nine months of 2004, although the number of fatal accidents increased by 10.

Outlook

The expectations are that the events that will influence most strongly the development of industrial relations in 2005 will be the forthcoming parliamentary elections and the continuing process of preparing for accession to the EU. (Rumiana Zeleva, Ivan Neykov and Nelly Stonova - Balkan Institute for Labour and Social Policy)