Pension and labour market reforms

Labour market reforms

In 2011 and 2012, Semester CSRs addressed the issue of Slovenian employment protection, which traditionally favoured insiders’ rights and protected workers from firing. Specifically, the Commission was worried about the “asymmetries in rights and obligations guaranteed under permanent and temporary contracts” (European Commission, 2012c). Employment legislation tilted towards permanent employees, promoted job insecurity for temporary workers and created obstacles for transition to permanent employment. The disproportion in protection between different contractual arrangements created segmentation on the labour market which affected young and older workers the most. With EU accession, labour market segmentation worsened. Facing strict labour market regulations and strong trade unions on the one hand and tough competition from other countries on the other, employers started using temporary contracts more to keep up with market pressures (Stanojevic et al., 2016: 287). According to Eurostat, around 14 percent of the workforce was employed on fixed-term contracts between 2005 and 2017, which is 4 pp above the EU average. Under such circumstances, EU authorities encouraged Slovenia to decrease employment protection for permanent workers and, in parallel, to increase the protection of fixed-term workers and ease their transition to permanent employment (Council, 2011c: 2).

Two pieces of legislation addressed the issue of labour market segmentation in 2013—the Employment Relationship Act and the Labour Market Regulation Act. The new legislation reduced the gap in rights and obligations between open-ended and fixed-term contracts. The duration of one or consecutive fixed-term contracts was limited to two years. Unemployment benefits as well as severance pay were made available to fixed-term workers, but severance pay could be reduced in case of business-related terminations. Dismissal of permanent workers was simplified only for a limited minority of workers who worked for either less than a year or more than 25 years (European Commission, 2013e: 26). The notice period for permanent workers was significantly reduced, but the workers could now participate in job search activities already during the notice period (GRSI, 2013a: 41). Employers were stimulated for offering open-ended contracts with a two-year exemption period from unemployment contributions. As a general undertone, new labour market regulations kept job security high and extended rights to precarious workers on the one hand, and simplified hiring/firing procedures, made open-ended contracts more attractive to employers and de-stimulated temporary work on the other (Filipovic Hrast and Kopac Mrak, 2016: 705). Policy

Slovenia and the European Semester 185 evaluations confirmed that, while the use of fixed-term contracts was still pervasive among new workers, a much higher proportion of workers transitioned from fixed to permanent contracts (European Commission, 2016d: 51).

The reforms of 2013 were preceded by attempts of the Pahor government to implement labour market reforms, which were heavily criticized by trade unions and student organizations who opposed a Mini-Job Act regulating occasional and temporary work of students, unemployed and retirees. Pahor could not come to terms with trade unions and passed the bill in the National Assembly in November 2010 without any agreement with trade unions and junior partner DeSuS, which disapproved of the reform (Fink-Hafner, 2010: 1165,2011: 1133). The unilateral action made trade unions and students take things to the street, after which they started collecting signatures for a referendum. The consequences of Pahor’s manoeuvre were harsh. The initiative collected over 40 000 signatures which triggered a referendum and led to the revocation of the Mini-Job Act in April 2011 (Stanojevic and Klaric, 2013:224).

The labour market reforms explicitly drew inspiration from and sought to apply the EU’s reinvented ‘flexicurity’ concept (Fink-Hafner and Lajh, 2018; GRSI, 2011: 36). As Bekker (2018) points out, the Semester promotes a postcrisis version of the flexicurity concepts which assigns greater importance to the social aspect of flexicurity and seeks to prevent dualities on the labour market, adequate social protection of precarious workers during unemployment and smoother transition to permanent employment. Such a balanced vision as opposed to a more neoliberal notion of flexicurity was reflected in the Commission’s interaction with Slovenia, and further cemented during tripartite negotiations which resulted in more flexibility and security at the same time. Thus, the Semester helped keep alive the reinvented flexicurity concept and contributed to its active use in the government’s official policy documents.

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