Industrial relations and unemployment benefit schemes in the Visegrad countries during the COVID-19 pandemic

Abstract

German

French

The COVID-19 pandemic and the ensuing economic and technological adjustment increased the risk of unemployment, underemployment and skills mismatch across Europe. These increased risks highlighted the importance of national unemployment benefit schemes for income security. This article examines the role of industrial relations in shaping unemployment benefit regimes in the Visegrad countries during the COVID-19 pandemic. We adopted an actor-oriented approach based on desk research and 12 semi-structured interviews with the representatives of trade unions and employers in all the Visegrad countries. Our research showed that the capacities of the trade unions and employers' associations to shape the unemployment benefit regimes were rather limited. State control over social policy remained very strong and shaped the dynamics of industrial relations, without inclusive involvement of social partners. National governments sought to implement measures to protect employment (mainly wage subsidies), rather than to reform existing unemployment support regimes.

Keywords

Unemployment benefits short-time work industrial relations Visegrad countries Central and Eastern Europe COVID-19 pandemic

Introduction

The literature on industrial relations in Central and Eastern Europe generally portrays the social partners as relatively weak, with limited direct influence on policy-making (Bohle and Greskovits, 2012; Nölke and Vliegenthart, 2009; Varga, 2015; Visser, 2009). The evidence shows, however, that in an economic crisis, social partners are able to depart from the traditional regulatory instruments and adopt unconventional responses or innovative practices (Bernaciak and Kahancová, 2017). This has occurred in the Visegrad countries during recent economic downturns, such as in the late 2000s, when, even with limited institutional power and shrinking membership, the social partners were able to act strategically to mitigate the crisis. In some instances, using the usual tools, including mass labour mobilisation, trade unions were able to stabilise their position and sometimes even improve their bargaining power.

The COVID-19 pandemic is an exogenous shock that once again is testing the social partners’ capacities. While the first wave in spring 2020 was relatively moderate, mobility restrictions stymied the economy and led to hardship. The escalation of the pandemic during the next waves in autumn and winter 2020–2021 resulted in even stricter mobility restrictions and lockdowns. Combined with the demand shock for consumables and investment goods and disrupted supply chains, the COVID-19 pandemic strongly affected the small, open and relatively specialised economies of the Visegrad group. The economic slowdown also hit Visegrad labour markets hard. After six years of uninterrupted economic growth, the Visegrad countries experienced real GDP decline of around 5 per cent in 2020,¹ with a steep fall in hours worked (Astrov and Holzner, 2021).

Concerning the social partners’ role in government social policy-making in response to the COVID-19 pandemic and its economic and social repercussions, various tools for coping with unemployment that states, unions and employers had at their disposal before the pandemic were no longer available or effective. Social distancing and lockdown measures ruled out such union actions as mass mobilisation. Similarly, individual responses, mobility restrictions and other state interventions aimed at mitigating the pandemic put pressure on employers to adapt and experiment with new approaches in workplaces, especially where remote work was not possible (for example, in sectors with a high share of non-repetitive manual work and those with a high share of foreign workers, whose mobility (commuting) across national borders became, at least temporarily, problematic). Under these circumstances, labour market actors on both sides had to consider new approaches to organising labour.

Czechia, Hungary, Poland, and Slovakia differ from their European counterparts in the regulatory set-up of their unemployment benefit schemes, including the relatively low level, strict eligibility criteria and shorter duration of support (Banaszewska and Pilc, 2020). All four countries were severely hit by the COVID-19 pandemic, as their heavy specialisation in highly globalised sectors and the severe public-health effects of the second wave of the pandemic had a significant impact on employment.

The aim of this article is to examine the role of industrial relations in shaping unemployment benefit regimes in the Visegrad countries during the pandemic. Based on a review of the literature and analysis of semi-structured interviews with social partners, we explore the roles and interactions of trade unions, employers and states in initiating and shaping changes in the unemployment benefit system in four countries: Czechia, Hungary, Poland and Slovakia. The main research question of this article hence is: (RQ) what role did social partners play in shaping unemployment benefit systems in Visegrad countries during the COVID-19 pandemic?

The two research sub-questions are: (SRQ1) to what extent and in what capacity were social partners involved in developing unemployment support structures in response to the pandemic?, and (SRQ2) on what issues and through what channels were they involved in the formulation of unemployment benefits policy? The article proceeds as follows: we review the relevant literature (Section 1); conceptualise the role of social partners in shaping unemployment benefit systems (Section 2); describe the situation in Central and Eastern Europe; develop a methodological framework and present the case studies; and discuss the findings and conclude.

Industrial relations and welfare systems in Central and Eastern Europe: literature review

The involvement of the social partners in shaping unemployment benefit systems differs considerably across EU countries, depending on institutional factors and actors’ strategies. The literature on industrial relations in Central and Eastern Europe often points to the weakness of trade unions and employers in organising, as well as actively engaging in policy dialogue (Bohle and Greskovits, 2012; Crowley, 2004; Varga, 2015). Indeed, compared with other European countries, CEE industrial relations are characterised by declining unionisation, lack of established employer organisations, low bargaining coverage, a strong position of the state in social partnership, contested nature of tripartite bodies and social dialogue and a lack of transparency of negotiations (Eurofound, 2020).

Additionally, Czechia, Hungary, Poland, and Slovakia fall into the ‘post-communist’ or eastern European social model. This so-called ‘mixed’ system comprises characteristics of both liberal and conservative-corporatist regimes with significant legacies from the socialist period (Aidukaite, 2011; Haggard and Kaufman, 2008; Szikra and Tomka, 2009). In social policy, the four countries inherited a shared commitment to social insurance with high social security absorption capacity, but relatively low benefit levels (Aidukaite et al., 2021; Banaszewska and Pilc, 2020).

Even though in comparative research they are often treated as similar (especially in cross-EU comparisons), many scholars point to differences within the CEE group (Bohle and Greskovits, 2007; Jahn, 2018; Kuitto, 2016). While the other CEE countries (Baltic, Balkan countries, with the exception of Slovenia) practise ‘minimalist’ social policies, the ‘welfarist’ Visegrad four (Bohle and Greskovits, 2012) offer generous support, although under strict conditions. The common feature of the Visegrad countries is strongly pension-oriented social provisions targeting those not in employment, while failing to actively reintegrate people into the labour market (for example, through active labour market policies). Another criticism of such systems is that such passive labour market policies as support for the unemployed have significant loopholes that, in a crisis period, tend to exclude many people (Aidukaite et al., 2021). Such shortcomings call into question such systems’ effectiveness, calling for their reform. Besides many political constraints (see Scharle, 2014: 9), such reforms would require complex bargaining with key actors and stakeholders, careful design and thorough implementation and monitoring (Bonoli, 2010). Some scholars (for example, Baxandall, 2003; Vanhuysse, 2007) argue that the emphasis on pension schemes, and less support for unemployment support in Central and Eastern Europe was caused by the stronger political emphasis on business as a success factor than the protection of workers’ social rights during the transition, and also because unemployment benefits are generally received by a smaller portion of the population and hence have a smaller support base than pensions. The weak position of CEE unions (and employers) in policy engagement is often described as deriving from the difficulty of adapting organisational structures and strategic repertoires to new socio-economic conditions after regime change (Crowley and Ost, 2001; Ost, 2000). According to Crowley and Ost (2001), in the transition years the CEE trade unions had a difficult starting point. They faced difficulties in adjusting their strategies and organisational structures to the novel political and socio-economic situations, and thus were not fully capable of influencing policy-making and steering welfare reforms. Between 1992 and 2012, unions in the new Member States lost 77 per cent of their members (Visser, 2015).

Economic transformation towards an open economy and investment strategies of foreign employers strengthened the bargaining power of capital in the Visegrad countries. On the one hand, the welcoming conditions fostered by Visegrad governments attracted many foreign employers, who employed thousands of skilled workers. As many workers were released from transforming, formerly state-owned companies, the role of foreign employers in mitigating unemployment was generally welcome. Scholars also argue, however, that by doing so they assumed an important role in propelling the region towards ‘dependent market economies’ (Nölke and Vliegenthart, 2009) or ‘embedded neoliberal’ capitalism (Bohle and Greskovits, 2012) and failed to engage in genuine collective bargaining (for example, Müller et al., 2019). Over the years, such preconditions have led to ineffective social dialogue with strongly entrenched tripartism, but with low influence of social partners on policy-making (low co-determination).

Nevertheless, Kahancová (2015) points out that even trade unions with weak institutional power and a reduced membership base can significantly influence policy-making with a well-organised strategy. The mobilisation of trade unions in the region was particularly evident during the 2008 financial crisis when they opposed state austerity measures and government policies and responded to the increasing prevalence of flexible and non-standard forms of work (Bernaciak and Kahancová, 2017). Examples of union revitalisation and their reform role (particularly in subsidiaries of foreign multinationals) include offering new member services and new alliances (Meardi, 2012). In addition, the union agenda covered innovative practices such as acknowledgement of workforce diversity and addressing of atypical employment in national labour legislation.

In industrial relations terms, this can be explained by changing approaches (Baccaro and Howell, 2017; Kochan, 2004; Roland, 2004). Industrial relations institutions, in general, are subject to such broad factors as market internalisation (Fetzer, 2009), state regulations (Kochan, 2004), technological change (Gasparri and Tassinari, 2020), ideological shifts, geopolitics, or past path-dependent decisions (Crouch, 1993; Hall and Soskice, 2001). In this context, institutions are characterised by constraints within which social actors operate. Industrial relations institutions change constantly as collective social actors introduce innovative practices and transform or create them to cope with new challenges (Streeck, 1998).

With reference to the Second World War, Katzenstein (1985) claims that when an exogeneous shock threatens the foundations of social stability, this leads to a punctuated balance between actors, causing systemic change. Such moments are defined by high uncertainty and time pressure and evoke reactions from elites characterised by inner unity and cooperation rather than particularistic interests. The COVID-19 pandemic, too, has triggered a response to, for example, rising unemployment. Basing our analysis on the pandemic, we continue the debate on revitalising industrial relations and, from a theoretical perspective, on the role of collective social actors (unions and employers’ associations) in the reproduction and regeneration of industrial relations institutions (Baccaro and Howell, 2011; Frege and Kelly, 2004; Hyman, 2008). In the following section, we will look at agential and structural factors that shape the extent to which industrial relations actors can participate in change.

Methodology, concepts and case studies

Unemployment benefit systems typically support the unemployed with job search conditions or conditions related to participation in active labour market policies (ALMPs), such as requalification schemes, skill maintenance schemes and others (Asenjo and Pignatti, 2019; OECD, 2020). The role of unemployment benefit schemes is therefore manifold and may be characterised by (i) income compensation and protection against poverty, (ii) work incentives for the unemployed and (iii) enhanced skill-matching by allowing the unemployed to find the most suitable job (Asenjo and Pignatti, 2019; OECD, 2020).

A similar role is played by short-time work schemes, usually tied to the social insurance system (for example, the German Kurzarbeitergeld) and activated in response to economic downturns to prevent unemployment by avoiding extensive lay-offs (Hijzen and Martin, 2013; Müller et al., 2022). In other words, short-time work schemes typically serve to retain jobs and skills. In this respect, the objectives of the unemployment benefits and short-time work considerably overlap; both provide income support, the former following redundancy and the latter to prevent job loss. Both unemployment benefit and short-time work schemes will be discussed here as two intertwined responses to the current health and economic crisis.

To examine the role of social partners in shaping unemployment benefit systems in the pandemic, we consider both structural and agential factors. Depending on the institutional arrangements, the influence of industrial relations actors on policy outcomes can vary considerably. The structures in which such actors operate provide both opportunities and constraints. We therefore hypothesise that social partners’ actions are shaped by the interplay between institutional dynamics and strategic behavioural patterns in various political and economic contexts (Thelen, 2001). Particular stress is put on ‘political opportunities’ defined as the potential for and obstacles to strategic action and intervention (Gasparri and Tassinari, 2020; McGuire, 2013).

We thus aspire to address a gap in research on recent developments in unemployment benefit systems in terms of social partner involvement in policy-making during the COVID-19 pandemic. The methodology is based on two key sources. Desk research in the existing academic literature, policy documents, legislative and regulatory framework and collective agreements concerning industrial relations in the Visegrad countries and unemployment benefit systems will provide important insights into key contexts and arguments at the country level surrounding the role of social partners in shaping unemployment benefit systems in the pandemic. In addition, 11 semi-structured interviews were carried out with relevant stakeholders in national social dialogue from employers’ associations and trade unions in all four countries. The respondents were identified based on the literature review and discussions with experts that preceded and informed semi-structured interviews. These were assessed using thematic analysis. Also, respondents were chosen from national employer associations and unions to cover all sectors (except for Czechia where also a representative of the automotive industry was approached because of its involvement in social dialogue on short-time work). This actor-oriented approach enables us to explore the interests, power and capacities of stakeholders with an impact on policy-making (Long, 2001). The combination of primary and secondary data aspires to provide a comprehensive picture of how the unemployment benefit systems have been shaped by social partners through lenses and experiences of relevant stakeholders in social dialogue in all four countries.

Country case studies

In this section we present the four country case studies based on desk research of the relevant regulations and interviews. To understand these studies in regional comparison, we summarise the key features of the respective unemployment benefit systems, such as eligibility, duration and level of support (Table 1). The table demonstrates relatively wide variation across the four countries. Hungary has the shortest duration and meagre support. Slovakia comes next, with somewhat longer duration, prolonged during the pandemic, but similarly modest support. Czechia offers unemployment benefit for as long as 12 months, with support declining from 65 per cent of the average net income in the first two months to 45 per cent in the last six months. Poland has the most differentiated system, with duration dependent on the regional unemployment rate (6–18 months) and size of benefit depending on the number of years worked (80–120 per cent of base amount).

Table 1.

Main features of unemployment benefit schemes in Visegrad countries.

Country	Eligibility	Duration	Level of support
Slovakia	Registered as jobseeker at Labour Office (UPSVaR) Insured for unemployment for at least 730 days in past 4 years before registering as jobseeker	Six months (Prolonged during pandemic)	Unemployment benefit provided per day and 50% of daily assessment base Daily assessment base (DVZ) is a proportion of the number of days the insured person has paid unemployment insurance contributions
Poland	Registered at Labour Office and committed to accept job offers, training, internship, vocational preparation Has worked and been insured for at least 365 days within the past 18 months	Depending on unemployment rate in place of residence 0–125% of average unemployment rate – 6 months 126–200% of average unemployment rate – 12 months Over 200% of average unemployment rate – 18 months After initial 90 days claimant receives full amount and subsequently a reduced rate	Not earnings-related, varies with length of time worked 0–5 years – 80 per cent of basic amount for initial 90 days 5–20 years – full basic amount Over 20 years – 120% of basic amount As of 1 June, basic amount: ZL 1240.80
Czech Republic	Registered as jobseeker at Labour Office Insured for unemployment for at least 365 days in the past 2 years before registering as jobseeker	12 months	Defined based on average net income; 0–2nd month: 65% of average net income paid in first two months 2nd–4th month: 50% of net income 5th–12th month: (depending on age of benefit recipient) 45% of net income
Hungary	Registered as jobseeker at Labour Office Insured for unemployment for at least 360 days in the past 3 years before registering as jobseeker	Three months	60% of previous average wage; cannot be higher than 100% of minimum wage

Source: Authors.

Czech Republic

Unemployment benefit scheme and short-time work schemes during the pandemic

The provisions of the unemployment benefit system in Czechia are contained in two laws. Act No. 435/2004 on Employment specifies eligibility criteria, level of support and competences of Labour Offices as the main bodies implementing unemployment benefit schemes, as well as the compliance mechanism; Act No. 589/1992 on Social Insurance and Contributions to State Employment Policies stipulates the rights and obligations of employers and employees regarding social security. In Czechia, jobseekers are eligible for unemployment benefit if they have completed at least 12 months of the insurance period before losing their job. The level of unemployment benefit is defined based on average net income: 65 per cent of average net income is paid in the first two months, followed by two months at 50 per cent, while in the remaining period (depending on the age of benefit recipients) 45 per cent is paid. Recipients are allowed to work if their income does not exceed 50 per cent of the minimum wage.

To alleviate the consequences of the pandemic for employment in Czechia, several compensation measures have been implemented, particularly sick pay for workers in quarantine, financial compensation in case of mandatory closure, and several types of financial incentive in relation to reduced hours as part of the so-called Antivirus Programmes (Drahokoupil, 2021). While the unemployment benefit system has not been changed, the Czech government has adopted incentives supporting partial unemployment in the form of wage subsidies to employers affected by the pandemic, to prevent job losses.

Role of social partners

According to the union and employer association representatives at tripartite level, the aim of the anti-pandemic measures was to retain jobs to keep unemployment down. Rather than amending the unemployment benefit system, the social partners focused on job retention. Particularly, the Czech government attempted to institutionalise the short-time work scheme by turning it into a permanent policy measure financed by social insurance instead of as an active labour market policy or as a part of the Antivirus programmes, merely reacting to the current labour market situation.

The amendment of the Act on Employment to establish a permanent short-time work scheme was adopted by the Czech government in September 2020. In October, the amendment was adopted at the first reading by the Lower House of the Parliament. Attempts to adopt the short-time work schemes in the legislative process were blocked by disputes between the coalition parties² about the replacement rate. In July 2021, both chambers of the Czech parliament approved the short-time work scheme as a permanent measure to be activated if certain industries or the whole Czech economy are negatively affected by a pandemic, natural disaster or another extraordinary situation. Some 80 per cent of the average wage will be compensated if the employer does not assign tasks to employees that amount to 20–80 per cent of weekly working time.

Regarding the tripartite discussion on the short-time work scheme, in December 2020 representatives of trade unions and employers’ associations jointly called on lawmakers to adopt it, given that the Antivirus programme was set to run for a maximum of one year (initially until December 2020), at which point compensation to employers would end.³ According to the representatives on both sides, they had reached a consensus, inspired by the German model of short-time work. The unions and the employers used the media to demonstrate their consensus. According to the union representative at tripartite level, the discussion on adopting a permanent short-time work scheme – which resulted in policy proposals – has been shaped by the automotive industry.

Hungary

Unemployment benefits and short-time work schemes during the pandemic

In Hungary, jobseekers are entitled to unemployment benefit if they have worked at least 360 days within the past three years before losing their job. Jobseekers are also entitled to one day’s unemployment benefit for every 10 days worked. Unemployment benefit in Hungary is paid for a maximum of 90 days, among the shortest in the EU.⁴ The level of the benefit is 60 per cent of the previous average wage, based on the four calendar quarters preceding job loss. The amount of the support cannot be higher than the minimum wage. If the jobseeker has worked for more than one employer in that time, the amount is calculated based on the average pay received from all employers. Also, if the jobseeker’s average wage cannot be determined, the amount of the allowance is calculated on the basis of 130 per cent of the national minimum wage.

The unemployment benefit system in Hungary is regulated by the Act on Social Security of July 2020, replacing Act CXXII of 2019 on Entitlements to Social Security Benefits and on Funding These Services. The newly adopted Act introduces a single social security contribution (18.5 per cent), purportedly to reduce the administrative burden, replacing a fragmented system of several social security contributions, including health care and unemployment insurance contributions.

During the first COVID-19 wave, the Hungarian government introduced several measures to mitigate the impact of the pandemic on the economy, including a short-time work job retention subsidy (Government Decree No. 141/2020 on support for reduced working time), to be activated in case of emergency. The subsidy remained in place until the end of August 2020 providing support to workers whose working hours had been reduced at least by 15 per cent, but no more than 75 per cent in the event of an emergency caused by the adverse economic impact of the pandemic. The scheme was not extended, but Government Decree No. 485/2020 was adopted, providing short-time work subsidies to the culture and hospitality sectors (György, 2021).

Role of the social partners

Trade union and employers’ association respondents at national level declared that the social partners were barely involved in social dialogue on the adoption and implementation of the pandemic measures. According to the union representative, the Fidesz-led government made little effort to engage in discussion, while most of the pandemic measures and legal changes were adopted without a proper discussion at tripartite level, on the grounds that the crisis required swift action. Thus, according to the union representative, the pandemic highlighted the limitations of social dialogue in Hungary: the pandemic was used as another excuse to impose labour market measures without consultation.

The Act on Strikes was identified by the trade union representative as a major obstacle to taking industrial action. The Act (in force since 2011) stipulates that strikes are lawful only if both employers and trade unions draw up an agreement on the minimum level of services to be provided before the strike takes place. If they fail to agree, employers and the governing body may turn to the Labour Court, which has the power to overrule the strike action, on the assumption that public services may be adversely affected. According to the trade unionist, this undermines industrial relations and the role of trade unions in particular. The union representative also reported that large companies were likely to terminate or not prolong company-level collective agreements. This puts more downward pressure on working conditions and jeopardises rights at work.

The trade unionist also said that the unions backed various anti-crisis measures, including raising unemployment benefits and extending short-time work subsidies. None were adopted, however. The representative of the employers’ association claimed that at tripartite level, the employers attempted to advocate for a sustainable Kurzarbeit scheme that would be embedded in legislation. The representatives of both sides criticised the fact that short-time work support was provided only after a long delay and that implementation was troublesome and complicated.

The trade unions launched several protests in response to government policy changes, such as the transformation of the status of civil servants in state institutions and the lack of involvement of the tripartite partners in policy discussions about these reforms. According to our respondents, their protests had little impact and channels of negotiation were eroded further.

According to Hárs (2021), the government used the notion of a so-called 'work-based society' to shape the policy discussion over anti-pandemic measures and, as a result, did not adopt generous policy measures to strengthen the safety net or to improve working conditions in a significant way.

Poland

Unemployment benefit scheme and short-time work mechanisms during the pandemic

The unemployment benefit system in Poland was set up during the economic transition in the 1990s. Initially, there were multiple allowances and eligibility criteria were highly flexible (Spieser, 2007). Later on, in response to the sudden increase in unemployment and growing deficit, the criteria were tightened up. The European Committee of Social Rights (OPZZ, 2017) found an exceptionally high number of violations of the European Social Charter. In the area of labour market policy, two irregularities were pointed out: low unemployment benefits and a shortening of their duration from 18 to six months.

The Polish unemployment benefit system is exceptional in Europe. The benefit amount is not linked to previous earnings (and insurance contributions), but to unemployment status and years of service. The conditions for unemployment benefit allowance are defined in the Law on the Promotion of Employment and Labour Market Institutions, adopted in 2004 and amended several times since then (Act No. 99/2004, Coll).

During the COVID-19 pandemic, new regulations were introduced, including a new ‘solidarity allowance’. Starting from June 2020, people losing their jobs could apply for a solidarity supplement of PLN 1400 (approximately €350) per month for a maximum of three months (ZUS, 2020). The solidarity cash benefit, however, functioned in parallel with the regular unemployment compensation scheme (also amended). Unemployment allowance was increased twice: in June 2020 from PLN 861 (€187) to PLN 881 (€191), and in September 2020 to PLN 1240 (€272) (Aidukaite et al., 2021). This was the first significant increase in unemployment benefit since 2014.

Apart from unemployment-related measures, in April 2020 the Polish government adopted a legislative package aimed at counteracting the socio-economic effects of the pandemic, called the ‘Anti-Crisis Shield’. The employment protection measures were available for employers experiencing difficulties since the outbreak of COVID-19, such as falling sales (i) by at least 15 per cent compared with two consecutive months in 2019, or (ii) by at least 25 per cent compared with the previous month in 2020. In the first case, employers could have either reduced the working time (by 20–50 per cent), or halt the operation. In case of a working time reduction, employers are entitled to apply for wage subsidies up to a maximum of 50 per cent of the reduced wage, paid from the Guarantee Fund. In the second case, employers may ask for a contribution of up to 50 per cent of the minimum wage. Overall wage compensation must be at least equal to the minimum wage, while the employer's wage contribution may not exceed 40 per cent of the national average wage. In exchange, dismissals were prohibited; in case of a breach, employers must return the funds received (Interview carried out in 2021; Surdykowska, 2021).

Role of the social partners

From the beginning, social partners in Poland had no opportunity to engage actively in intensive social dialogue leading to national-level agreements, for two reasons. First, the government attempted to reduce the social partners’ policy-making influence by altering the functioning of social dialogue. This allowed the prime minister to dismiss members of the tripartite council.⁵ Furthermore, the government did not convene regular meetings of the tripartite committee under the pretext of the adverse pandemic situation, neglecting alternative channels used in the majority of European countries, such as online assemblies.

To address the adverse effects of the pandemic all social partners worked together to produce a joint statement objecting to the adopted measures and initiated protests. The government’s actions attracted foreign attention, receiving heavy criticism from the European Commission and the European and Polish social partners for using the pandemic to limit social dialogue (Rogalewski, 2020). Following union protests, the regulation was removed from the draft before submission to parliament; nevertheless the Sejm adopted the amendments, even against opposition in the Senate. While the acts have not yet come into force, social partner interviewees mentioned that in the meantime negotiations with the state have been carried out in a spirit of great uncertainty. Regarding tripartite meetings, social partners appealed to the Polish government to renew social dialogue meetings. A first (online) gathering took place in August 2021 and this virtual format has continued.

At the outset of the presidential campaign, national trade unions were able to draw public attention to the long-term problem of extremely low and restrictive unemployment benefits. Prior to the government draft on the unemployment support scheme, the trade unions used the media strategically, ‘making the issue visible to the public’ (Interview, 2021).

When framing the media debate, the unions had to overcome the government’s attempt to use ‘low unemployment as a sign of [the benefits of] a strong state’. They relied on a strategy of practice, pointing to structural features of western European countries such as Germany, France or Belgium, where unemployment benefits are at least 60 per cent of the previous wage. All three main union confederations (OPZZ, FZZ, Solidarność) cooperated to increase the level of unemployment benefits. Moreover, the union OPZZ had sought to make use of their network embeddedness and consulted left-wing MEPs. This resulted in the drafting of a law on crisis benefits, which was submitted to the Senate. Even though it was not adopted, it put pressure on the government. On 1 June 2020, the government adopted a regulation on a solidarity supplement and its extension in the form of an increased unemployment allowance. This came into effect in September 2020. Even though the increase seems quite large, the level of regular unemployment benefits in Poland was (and still is) very low. One of the trade unions also emphasised that the self-employed or people under civil law contracts have been granted much higher compensation for lost income.

The union representatives interviewed considered the changes in unemployment benefits as a success. They are not likely to lead to broader social reform, however, partly because the unions disagree about fundamental issues in this connection. While OPZZ emphasises that unemployment benefits should be tied to wages (at least 50 per cent of the previous salary in line with ILO Convention No. 168), NSZZ Solidarność prefers flat-rate increases.

Slovakia

Unemployment benefits and short-time work mechanisms during the pandemic

In historical perspective, the unemployment benefit system in Slovakia has been subject to a large number of flexible adjustments rather than complex reforms. Apart from pre-EU accession social reforms in 2003, there have been several legislative amendments adjusting eligibility criteria, benefit level and duration of support, following a gradual downward trend. Because of the growing uncertainty at the beginning of the transition the unemployment criteria remained generous, based on a broad definition of unemployment with room for further modifications.

In Slovakia, an entitlement to unemployment insurance arises from the right to work defined by the Constitution (Act No. 460/1992 Coll). Unemployment insurance is regulated by the Social Insurance Act (No. 461/2003 Coll) and the Employment Service Act (No. 5/2004 Coll). Over the years, both Acts have been amended several times (in 2011, 2013, 2018), but the period since March 2020 has seen 10 revisions of the Social Insurance Act. In less than a month after the first case of COVID-19 was reported, the Slovak government adopted a revision of the Labour Code (Act No. 66/2020 Coll), which authorised the government, if necessary, to regulate unemployment allowances during the emergency. Since then, the government has adopted temporary adjustments in unemployment benefits. Throughout the state of emergency, the duration of unemployment benefit has been extended four times, to up to six months following the end of the normal period of benefits.

Apart from enhanced unemployment benefits, wage subsidies emerged as an effective policy tool to mitigate adverse consequences of the pandemic on the Slovak labour market. These simplified short-time work mechanisms were adopted under the governmental ‘First Aid’ packages⁶ targeted at employers and the self-employed. While similar temporary tools were already used to mitigate the effects of the economic crisis in 2009 (such as the ‘flexikonto’), more recent pandemic allowances for retaining jobs during the pandemic were far more generous. As for the short-time work schemes, employers could apply for financial support of up to 80 per cent of the average wages of employees who are unable to work due to pandemic restrictions adopted by the Slovak health authorities, or falling company revenues (Kováčová, 2021). The economic measures remained in effect until June 2021.

Role of the social partners

Since the advent of the COVID-19 pandemic, the macro level of industrial relations has emerged as a significant domain for social partner interventions. The pandemic hit just as the newly elected government took over from the social democratic party Smer SD. A turbulent period now ensued for social partnership in Slovakia.

Under threat of rising unemployment because of the economy’s dependence on highly globalised sectors, the government took swift action against COVID-19. The majority of labour-related measures were adopted in a fast-track legislative process without tripartite consultations. To compensate for this limited involvement in policy-making, both employers and the trade union confederation developed alternative channels. The KOZ SR (Konfederácia odborových zväzov) confederation launched online campaigns and addressed letters to government representatives. More importantly, after a long period of social peace, KOZ SR initiated a nationwide protest march, which enhanced its mobilisation capabilities. National employers’ associations worked together on many occasions to secure a greater voice. They used their established media presence to send a clear message to the incoming government that social partners must be included in discussions. One respondent mentioned that they find the tripartite rules to be formal and inflexible, and so have tried to obtain seats in alternative government organs, such as the Pandemic Commission or Crisis Staff, which present more opportunities to influence pandemic policy-making.

Pressed by the social partners, in May 2020 Minister of Labour Krajniak held the first tripartite meeting and proposed German-style Kurzarbeit. All respondents stressed that this idea has been mooted on many occasions, but that it was the limited scope of job protection measures in the context of the pandemic that triggered a discussion on its legal implementation. According to the representative of the biggest employers’ association, an extensive debate over its design took place among all social partners in the working group established by the Ministry of Labour. The employers’ organisation representing automotive companies has played a pivotal role in the implementation of Kurzarbeit, having tried to open a discussion on it many times in the past.

Once the new government got on track, it introduced a minimum wage policy. KOZ SR objected to this initiative as ‘unlawful’ and decided to boycott the tripartite meetings in August 2020. According to the representative of one employers’ association, however, ‘cooperation had to go on’ and therefore labour issues were negotiated between employers and the Ministry of Economy in the Economic Crisis body. Deepening conflict between the trade unions at the national level, on the one hand, and the government and employers’ associations on the other has resulted in government attempts to diminish the role of the union confederation by amending the Labour Code. The amendments liberalised the conditions of representativeness, allowing additional organisations to participate in national-level social dialogue. The amendments in the Tripartite Act have changed the balance of power, with new confederation Common Slovak Unions (Spoločné odbory Slovenska) joining the tripartite National Economic and Social Council.

As the organised protests were relatively ineffective, but more importantly in fear of adverse government measures against unions in the future, KOZ SR decided to re-enter the tripartite meetings in February 2021 (Interview, 2021). Once the meetings restarted, a law on short-time work support was negotiated. Both the union confederation and employers’ associations were critical of its implementation. KOZ SR highlighted the two-year-old average wage as a reference for the calculation of the maximum allowance, pointing out that this was likely to reduce the maximum entitlement. The three employers’ associations that were most engaged in the discussions about the Kurzarbeit law raised the following controversial points: (i) exclusion of the self-employed, (ii) a new financing tool even though the existing unemployment insurance fund shows a long-term surplus, and (iii) an unclear definition of ‘external factors’ as a trigger for applying the law. Following the standard comments procedure including all social partners, in May 2021 the Slovak government approved the law on permanent Kurzarbeit as a compromise. While the establishment of a new insurance fund⁷ did not increase employers’ social contributions, the self-employed were not covered. Despite their generally limited say in the unemployment benefit system and pandemic policy-making, the social partners found the tripartite negotiations productive as they led to an institutionalisation of the long-lasting debate on short-time work. The law came into force in January 2022.

Discussion and conclusions

The empirical analysis sheds light on the diverse roles of social partners in shaping unemployment benefit systems in the four Visegrad countries during the COVID-19 pandemic. In general, we find that social partner involvement was to a large extent shaped by trade unions’ and employer associations’ limited opportunities to participate in national policy-making. Based on our analysis, we summarise this in Table 2.

Table 2.

Summary of social partners’ roles.

	Czechia	Hungary	Poland	Slovakia
Unemployment benefit system	No changes, the government focused rather on incentives to support partial unemployment in the form of wage subsidies	Neglected by the government	June 2020: New benefit Solidarity allowance – a cash benefit for people who lost their jobs during the pandemic (PLN 1400 per month for a maximum of three months) June 2020/September 2020: increase in unemployment allowance from PLN 861 (€187) to PLN 881 (€191), and additionally to PLN 1240 (€272)	Since April 2020: series of unemployment allowance prolongations; the Labour Code amendment gave the government the right to adjust unemployment allowance criteria during state emergencies; unemployment allowance prolonged five times
Social partners’ position	Social partners critical, trade unions advocate increase in unemployment allowance	Social partners critical, trade unions advocate increase in unemployment allowance (no outcome)	Government-led initiative, trade unions active advocates for increasing unemployment allowance	Government-led initiative with no social partner consultation, trade unions in favour

In Czechia, we found no changes in unemployment benefit or the short-time work scheme within the framework of the government’s labour market responses to the pandemic. There was consensus among the social partners to adopt a short-time work scheme as a permanent measure. Most disputes were among political parties in the Babis' government rather than the social partners. Policy discussions were shaped by the desire to keep the unemployment rate low and prevent lay-offs rather than to amend benefit schemes.

The social partners’ room to manoeuvre in Hungary had been deteriorating for years before the pandemic gave the government the opportunity to further limit their influence on policy-making. In Hungary, no change in the unemployment benefit system was implemented; according to the stakeholders interviewed it remains insufficient in terms of its level and very short duration. The negotiation and communication channels have been eroded, undermining trade union efforts to promote improvements. As concerns the overall institutional and legislative setting, the strike legislation further undermined the role of industrial relations and especially trade unions. Finally, the pandemic has highlighted the overall deterioration of industrial relations in the country over recent decades and the disabling of several instruments, such as collective agreements, that might serve as mechanisms of adjustment and protection of employment and workers in times of crisis.

The labour market in Poland did not deteriorate as dramatically during the COVID-19 pandemic as it did in many other European countries. Similarly to its Visegrad counterparts, social dialogue was sidelined. Unlike the other Visegrad countries, however, some changes have been made on the unemployment benefit front, namely a permanent increase in the level of unemployment benefit. The results of our analysis are therefore mixed. On the one hand, trade unions robustly resisted their exclusion from policy-making, including national-level social partner protests against particular new regulations. Interestingly, this adverse situation has to some extent fostered trade union support and perhaps undermined the perception of Solidarność as an ally of the ruling party among the other trade unions.

On the other hand, when it comes to having a significant impact on unemployment benefit, trade union action was restricted during the pandemic. Unions have sought to gain public support through extensive digital outreach, and have used various, mainly traditional tools such as collaboration with left-wing political parties, selective coordination between unions, and sharing good practices about unemployment benefit levels across EU states. No broader reform of unemployment benefit was achieved in this way, however, mainly because the two biggest unions did not share the same vision on how it should be calculated. Nevertheless, the pandemic helped to boost union membership, which had been declining since the 1990s.

In Slovakia, tripartite meetings ceased after 4 April 2021, and the government did not consult the social partners on the unemployment benefit system in this format. This left the trade unions and employers’ associations with little scope to influence the system’s design. As a result, the social partners acted outside the usual tripartite framework and developed alternative initiatives to attract public attention, mainly through social media (podcasts, social media channels, online gatherings). In contrast to the other Visegrad countries, where the unions’ mobilisation capacities were limited by the COVID-19 disruption, the union confederation in Slovakia organised several nationwide protests throughout the period. Our analysis shows that while the social partners’ initiatives did gain significant public attention, their ability to intervene in pandemic policy-making remained largely limited to the role of passive consultants. While a constructive dialogue between social partners could be observed in the implementation of permanent short-time working in Slovakia, it is notable that discussions between the social partners and the government started before the pandemic (spearheaded by employers in the automotive sector). Nevertheless, the pandemic was critical for launching and institutionalising the Kurzarbeit scheme in Slovakia.

Overall, our findings uncovered interesting common features in the Visegrad countries. In response to significant labour market disruption during the COVID-19 pandemic, national governments sought to implement protectionist measures rather than reform existing unemployment support infrastructures. Even though central governments (except in Hungary) unilaterally decided to increase benefits for people who lost their jobs because of the pandemic, the adopted changes were superficial and did not include consultation with social partners. All countries followed the path of subsidising employment, a policy initiative within the framework of which governments actively engaged with social partners. Short-time work schemes were institutionalised in Czechia and Slovakia.

In general, social dialogue and industrial relations were weakened during the decades of these countries’ transition to market economies. The necessary instruments and political capital were lacking to affect policy choices significantly. Our findings confirm that state control over social policy remains very strong and shapes the dynamics of industrial relations, namely trade union engagement in shaping unemployment benefit systems. Their inability to achieve unemployment benefit reforms in the pandemic thus further calls into question trade union capacities to affect labour and industrial relations policies. The analysis has demonstrated that in the adverse context of the pandemic, trade unions in the Visegrad countries wielded the instruments available to them, often non-standard and non-institutionalised. While such strategies helped them to raise issues and to some extent strengthened their immediate capacities, they had no direct effect on their inclusion in social policy negotiations.

Based on these findings, to increase their effectiveness in shaping unemployment benefit systems, trade unions should invest in mobilising their power resources in already established industrial relations institutions, where actions are more concentrated, such as collective bargaining institutions. Although collectively negotiated benefits might be less favoured by the social partners and more limited in contrast to national social provision (Trampusch, 2007), they may represent a way to stabilise the social policy areas in Visegrad countries that have been adversely affected by recent government policies. For trade unions, such a new opportunity structure might represent a way to recruit members and revitalise organisational resources (Madsen, 2003). Further studies should explore the applicability of and industrial relations actors’ interest in collectively negotiated benefits in order to understand how industrial relations affect the development of welfare states in the Visegrad countries.

Footnotes

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

1

Source: (accessed 16 November 2021).

2

The Minister of Finance is a member of the ANO party, while the Minister of Labour is affiliated with the Czech Social Democratic Party.

3

Statement of OS KOVO, available at: (accessed 20 October 2021).

4

Source: (accessed 20 October 2021).

5

Article 85 of the Act on Special Solutions Related to the Prevention, Counteracting and Combating of COVID allows the prime minister to dismiss members of the council during a national emergency. Article 46 (without time limit) allows the prime minister to do so under two circumstances: if members of the Council cooperated with the Communist security authorities under the former regime or when they are engaged in inappropriate actions against the council, rendering it unable to conduct transparent, substantive and regular dialogue among workers and employers’ organisations and the government side.

6

Including the revisions First Aid +, First Aid +++. These packages included different measures mitigating the effect of the crisis, such as wage subsidies for employees with reduced working hours (STW policies) but also financial aid for the self-employed and employers whose business operations were restricted due to economic downturn or government order.

7

The so-called ‘Employment Retention Fund’ (effective from January 2022) is a new insurance fund established in addition to the unemployment insurance fund. The idea is to avoid increasing the current contribution burden of employers and employees, by reducing the unemployment insurance premium, which is made possible by the long-term surplus of the unemployment insurance fund.

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