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Estonian unions and current crisis

Estonian unions and current crisis. Harri Taliga May 29, 200 9. Unions 2009. Union density rate – below 10% , declining 1,5 (?) confederations: EAKL Confederation of Estonian Trade Unions re-established in April 1990 (first TUC in 1919)

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Estonian unions and current crisis

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  1. Estonian unions and current crisis Harri Taliga May 29, 2009

  2. Unions 2009 • Union density rate – below10%, declining • 1,5 (?) confederations: • EAKL Confederation of Estonian Trade Unions re-established in April 1990 (first TUC in 1919) • TALO (Estonian Employees’ Unions’ Confederation) – split from EAKL in 1993-1994 • February 2009 – Teachers and univeristy teachers unions left TALO

  3. EAKL EAKL has 19 affiliates in: industry transport private services health care state and local authorities

  4. EAKL (2) • Central office – 11 employees • 6 regional offices – 7 employees Central office: • President • Secretaries: organising, legal issues, wages/negotiations, international • PR-manager • lawyer

  5. Social dialogue • 1992 April – first tripartite agreement • 1992-2003 – 17 tripartite agreements • Minimum wage • State unemployment allowance • Basic income tax exemption • Participatory democracy • Guarantee fund • Principles of new Employment Contract Act

  6. Social dialogue (2) • Spring 2008 – tough tripartite negotiations on new Employment Contract Act • April 23, 2008 – delegations signed agreement on the Bill • amendments only on tripartite approval • enforcement one year after adoption • Government broke its word

  7. Bipartite negotiations • Unions – employers • National: confederations • Branch: sectoral federations/associations • Company: union and employer • Unions – government • Civil servants’ salaries • Teachers’ salaries

  8. EAKL – Employers’ Confederation • December 1999 – memorandum • February 2001 – unemployment insurance • March 2001 – social partnership • August 2001 – principles of increasing minimum wage for 2002-2008 • September 2003 – principles of new Labour Contract Act • Agreements on minimum wage (2002 – 2008)

  9. Collective agreements 2008 • Total coverage – 28% • 1 national agreement • 2 sectoral/branch agreements • public transport • health care • Energy, railway, mining covered by company agreements

  10. Unions’ achievments • Protection of unions’ rights in Employees Representatives Act (12. 2006) • National minimum wage agreements • 2007: increase by 20% – 3600 EEK • 2008: increase by 20,8% – 4350 EEK • 2009: no increase - 4350 EEK • ESF money for social partners’ capacity building (2008 – 2014)

  11. Priorities for unions • Organising and recruiting members • Increasing representativity • Increasing bargaining capacity • Increasing ability to take industrial actions • 2004 – 2007 EAKL and affiliates organised 14-16 strikes, demonstartions, picket lines every year • 2008 – warning strike of EMSA

  12. Priorities for unions (2) • Promote European social model • strong industrial relations – partnership and workers’ participation • higher labour and social standards • social inclusion • fight against any discrimination

  13. Challenges for Estonian unions • Reluctance of the state to engage in social dialogue • no real interest in social partners’ involvement • attempts to limit (by amendments to legal acts) the unions’ influence and to push unions out from the dialogue

  14. GDP growth • 2000–2007: 8,7% p.a. in average • 2008: –3,6% (preliminary) • 2009: –8,5% (MoF) vs –12,3% (BoE) • 2010: –2,5% (MoF) vs 0,2% (BoE)

  15. Increasing unemployment • 2000–2007: 9,3% p.a. in average • 2008: 5,5% • 2009: 12,2% • 2010: 15,6%

  16. Inflation • CPI • 2000–2007: 4,1% p.a. in average • 2008: 10,6% • 2009: 0,7% • 2010: – 0,6%

  17. Wages • Nominal wages • 2000–2007: 12,5% p.a. in average • 2008: 14,4% • 2009: – 4,4% • 2010: – 2,3% • Minimum wage • 2000–2007: 14,2% p.a. in average • 2008: 20,8% • 2009: 0,0%

  18. Policy of the Government • Autumn 2008: unrealistic 2009 budget bill – adopted in December • GDP increase +2,6% • Spending 98,5 billion kroons (deficit –0,8%) • February 2009: • Public spending cuts – 6,6 billion kroons • Join Euro in mid-2010

  19. Policy of the Government (2) • April 2009: • Additional cuts – 8,5 billion kroons • Enforcment of the new Employment Contract Act, but without of agreed increase of the unemployment insurance benefits • Euro is not the goal, but additional benefit

  20. Income tax changes

  21. Unions response • Cuts are not creating economic growth • Support of the domestic demand needed • Redistribution of the income tax: • basic exemption up to 5000 EEK/month • income tax rate up to 26% • Joining Euro at any costs not acceptable

  22. Unions response (2) • Social insurance reserves to be used according to their purpose • Enforcement of the Employment Contract Act • only on agreed in spring 2008 conditions • alternative – new agreement

  23. Thank you for your attention! www.eakl.ee

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