Social dialogue and the public services in the aftermath of the economic crisis: strengthening partnership in an era of austerity in the Czech Republic National report



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Social dialogue and the public services in the aftermath of the economic crisis: strengthening partnership in an era of austerity in the Czech Republic

National report

Zuzana Dvorakova* and Alexandra Stroleny**

*VŠE University of Economics, Prague

** King’s College, London

December 2012




European Commission project

Coordinated by Professor Stephen Bach, King’s College, London

Industrial Relations and Social Dialogue’



VP/2011/00

Table of Contents


1

Summary 7

1. Introduction 7

The responsibilities for public services and the size of the sector 8

Regions 8

Municipalities 8

Main features of public sector social dialogue 9

National 11

Pay 12

Sectoral vs. Organisational/enterprise level 13



2. Drivers and Measures of Austerity 14

Main Drivers 14

Measures 14

Main measures as of 2011 15

Wages 15

Consequences for social dialogue 16

Pension Reform 17

Current developments: 2013- 2015 budget 18

Other current developments: 18

Trade union responses 18

Industrial relations in the health care sector 20

Trends in the health care 20

Social partners and collective bargaining 21

Views of the social partners on changes in the health care 22

Current situation in the Civil Service 22

3. a Local Government 23

Background: local government reform 23

Local government - social dialogue 25

Fiscal restrictions 26

Annual change of revenue and expenditure of municipal authorities 26

Annual change in income items in the budgets of municipalities (excluding Prague) 27

TTRozhodují daňové příjmy a dotaceax revenue and grants 28

Income growth rates of municipalities 28

Tempo růstu výdajů obcíGrowth rate of expenditure of municipalities 29

Debt 29

Consequences of fiscal restrictions 30



Differential impact of fiscal restrictions 30

3.b Case studies 31

Background Information: 31

Vsetín 31

Employment reductions 31

Reduction in wages 31

Productivity 31

Organisational Change 32

Brno 32

Survey: Reactions of the social partners - Trade unions and employees’ satisfaction in municipal authorities 33



Impact on service quality 35

4. Discussion and conclusion 35

References: 37

Appendices 42





List of Tables
Table 1: Average Number of Employees in the Czech Republic by institutional sector
Table 2: Outlook for balances (2011)
Table 3: Labour disputes in the Czech Republic - Examples
Table 4 1. Celkové příjmy obcí – roční změna (%) Total income - Annual change (%)

List of Figures

Figure 1: Annual change of revenue and expenditure of municipal authorities
Figure 2: Roční změna příjmových položek v rozpočtech obcí (bez Prahy)Figure 2: Annual change in income items in the budgets of municipalities (excluding Prague)
Figure 3: Figure 3 Graf 4.Annual change in tax revenues of municipalities (excluding Prague)
Figure 4: Annual change: grants to municipalities (excluding Prague)
Figure 5: Central and local government employment levels
List of Boxes
Box 1: The Czech Republic Labour Code
Box 2: Key changes to Pension provision
Box 3: Local government financing

Summary


While taking into account the influence of long-term public sector reform, from the fall of Communism and beyond, this report analyses the impact of the economic crisis on social dialogue in the Czech Republic. In particular, it focuses on the following underlying research questions:
1. What changes have there been in terms of job levels, terms and conditions of employment and patterns of work organisation?

2. How have these changes been implemented and to what extent has social dialogue contributed to the change process at national, sectoral and local level?



3. How have institutions of social dialogue influenced industrial relations processes/ outcomes in the public services?
Although the Czech financial sector is stable and has not been immediately impacted by the financial crisis, there are pressures on public sector finances as well as pressure for reform, however only partly stemming from the advent of the economic crisis. After a period of political uncertainty, in 2010 the newly elected has introduced a set of austerity measures in a pursuit to fiscal consolidation. This report considers the quantitative and qualitative nature of these measures as well as the main underlying drivers, while also recognising longer term influences on reforms of public sector employment relations (i.e. demographic changes with an aging population putting increased pressure on public expenditure) and the specific legal peculiarities in the Czech context. Overall, since dialogue at the national and sectoral level is very limited as institutions of social dialogue are either non-existent or rather a mere formality, but there is generally scope collective bargaining at organisational level.




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