The Government of Slovenia has been ordered to pay millions of euros to public sector employees who didn’t receive an agreed pay rise after it was frozen as part of austerity measures. The Trade Union of State Bodies of Slovenia has won a case against the state in the Higher Court. The court ruled that a pay deal agreed in 2008 must be honoured, and the wages of about 20% of public sector employees should be raised. The money will be paid in two instalments with interest.
Background
The Slovenian Press Agency (STA) announced on 26 September 2013 that the Trade Union of Civil and State Bodies of Slovenia (SDDO) had won a lawsuit against the Government of Slovenia in the country’s Higher Court. SDO is a member of the Union of Free Trade Unions of Slovenia (ZSSS).
The court ordered the government to raise the wages of about 20% of public sector employees in line with a public sector pay agreement reached in 2008. The agreement gave an extra pay increase to certain professions in the sector as part of a package to balance wage discrepancies (SI0708039I).
The court decision will cost the state €35 million. It ordered that employees should be compensated for a wage increase agreed in 2008, and which was to be implemented between 1 October 2010 and 31 May 2012. However, if the government felt the ruling set a precedent and decided to increase wages for all public sector employees, the cost could surge to €170m.
Wage freeze due to financial crisis
The government and the public sector trade unions had agreed in 2008 that wages would be raised in four instalments.
Two instalments were paid, but the final two increases were unilaterally frozen as part of the government’s response to the financial crisis. The ruling of the Higher Court ordered the state to honour the third instalment.
It seems that the basis of the court’s ruling is that although the government and public sector trade unions agreed in 2010 to postpone any further pay increases, this agreement was reached only after the third instalment should already have been paid.
The Soldiers’ Trade Union (SVS) had also been successful in a similar lawsuit, and a further 100 individual claims had also been filed.
Unions and Minister sign deal
On 8 November 2013, the public sector trade unions and the Minister of the Interior and Public Administration, Gregor Virant, signed a deal on the payment of the third instalment of wage rises set out in the 2008 agreement. While the two biggest trade union confederations had already approved the deal, several other unions were unhappy with it.
The agreement stipulates that the third round of the wage rise are to be paid in two instalments with default interest. The first payment was to be made by the end of February 2014 and the second by the end of January 2015.