MACEDONIA: NEW ERA IN LABOR RELATIONS

UNCLAS SKOPJE 000066

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EUR/SCA

E.O. 12958: N/A
TAGS: ELAB PHUM ECON EAID PGOV MK
SUBJECT: MACEDONIA: NEW ERA IN LABOR RELATIONS

Summary
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1. (SBU) The GOM and the Federation of Free Trade Unions (KCC)
signed a collective bargaining agreement for public sector workers
on January 16. The agreement will not directly increase civil
servants' wages or benefits, since the GOM is already providing
public employees with a 34 percent wage increase over three years.
However, the agreement does clarify some important labor rights for
government employees. Most significantly, the process of the
negotiation signified the end of an era in which government
officials and labor leaders had enjoyed a too cozy relationship
which did little to advance workers' interests. End summary.

Expanding Labor Rights
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2. (U) The collective bargaining agreement signed by the GOM and the
Federation of Free Trade Unions (KCC) replaces a previous agreement
that expired in 2004. The new agreement focuses primarily on
clarifying the rights of public sector employees and union leaders,
including provisions that union representatives have the right to
attend management board meetings, and employers are obligated to
provide logistical support (office space, etc.) to the employees'
union.


3. (U) The agreement does not directly increase salaries or
benefits. The GOM already is providing a 34% salary increase to
public employees over the period 2007-2009. KCC requested that the
agreement include a minimum wage for public sector employees, which
does not currently exist. The GOM refused, arguing that it could
not afford to set a minimum wage that would then be used as the
basis for calculating all wages, and would likely lead to wage
increases above the already announced pay increase. The union did
win agreement from the GOM that benefits, such as food and travel
allowances, would be adjusted annually. The allowances have not
been increased for several years.


4. (U) The collective bargaining agreement applies to all public
sector employees. Unions representing specific categories of public
employees, e.g.; teachers, doctors, etc., can negotiate a separate
agreement for their members, as long as the agreement does not
conflict with the collective bargaining agreement.

KCC Strengthens Role As Independent Union
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5. (SBU) The fact that KCC succeeded in negotiating the agreement
with the GOM signifies an important milestone in Macedonia's labor
relations. Past collective agreements have been negotiated by the
Federation of Trade Unions (CCM),the successor of the socialist era
labor federation. There were credible allegations in past years
that CCM's leaders had overly close ties with government officials,
making CCM susceptible to political influence. CCM also received
direct financial support from the GOM. KCC was formed in 2005 as an
alternative to CCM, and appears to be operating as a relatively
effective, independent representative for its members.


6. (SBU) KCC earned the right to negotiate with the GOM as the only
union organization able to demonstrate that it represents over 33
percent of public sector workers. The 33 percent threshold is a
requirement of the labor law which was passed when CCM was still the
undisputed labor leader. Initially, the GOM appeared hesitant to
begin negotiations with KCC. In early 2007, the Embassy weighed in
and told GOM officials that if KCC was the only labor federation
able to meet the legal requirements, then the law should be followed
and the GOM should deal with that organization. CCM lambasted the
GOM for negotiating with KCC, but CCM has clearly lost its once
favored status with the GOM, as demonstrated by the successful
KCC-GOM negotiations.

Comment:
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7. (SBU) The labor climate in Macedonia has improved considerably
over the past three years. When the teachers union, SONK, broke
away from CCM and became independent in 2005, CCM's leaders, with
the apparent collusion of GOM officials in the previous government,
tried to remove SONK's leaders and to require SONK's members to
rejoin CCM. With support from us and international labor
federations, SONK won its battle to remain independent. SONK then
went on to form KCC with other independent unions and some former
members of CCM. Now KCC appears to be effectively advocating for
its members, while CCM is becoming increasingly irrelevant. End
comment.

Milovanovic