Transcript barijere na tržištu rada i predlozi privanog sektora za njihovo

BARRIERS AT LABOR MARKET AND
PROPOSALS OF PRIVATE SECTOR FOR
THEIR ELIMINATION
Slaviša Delić
Montenegro Business Alliance
Solun, May 27, 2005
Briefly about Labor Law
• Labor Law has been adopted in July, 2003
• Changes are done in December, 2004
• The Law has 156 articles
• Valid Labor Law anticipates existence of
economy with large number of stable jobs
General Economic Situation in Montenegro
• High level of unemployment, primary because of
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the lack of investments
High level of employment in grey economy. As
consequence it has increase of pressure on: (i)
social funds and (ii) everyone who pays taxes
and contributions
Most of existing employment is situated in areas
in which sufficient number of workers already
exist: (i) public sector and (ii) large quasi private
enterprises
Review of Existing Law Regulations
• Regulation is primary directed on maintenance
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of existing employment in state-owned and
privatized enterprises
Freedom to make agreements is violated, as one
of the most significant market principles.
Protection of workers is too emphasized. The
Law regulates 48 cases in which employers are
to be fined 50 to 200 lowest prices of work and
about 60 articles about rights and protection of
employees.
Review of Existing Law Regulations
• Collective agreement includes many elements of
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arbitrary and bureaucratization in work relations.
Represents inheritance of the past and it is not
adapted to market conditions for doing business.
The role of the Union is over dimensioned
(employers are obliged to pay a membership fee
to the Union, although they aren’t, according to
definition, members of the Union). Law
regulations are at edge of Union interference in
business policy.
Guiding ideas-basic recommendations
concerning regulation of labor market
• The Law has to contain general frame of basic
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rights, in which free agreement between worker
and employer is going on. In all of that the Law
and the state appear as protectors of agreement
and guarantees of its execution.
Necessity to protect workers in privatized
enterprises should be realized through concrete
agreements with buyers of enterprises. If this
protection is included in general regulation it
represents burden to all enterprises and
employees.
Guiding ideas-basic recommendations
concerning regulation of labor market
• More liberal labor market brings about greater
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possibilities to open new jobs. Too much of
regulation, which disables free negotiations
between worker and employer, represents
limitation of new employment. Plans for
rationalization of state administration, as well as
Agenda of economic reforms which as one of its
priorities has support of entrepreneurship and
opening of new jobs, should be kept in mind.
Collective agreement shouldn’t relate on those
who were not included in its passing
Unemployment in Montenegro and
measures for its reduction
• The level of unemployment in Montenegro
is above 20%
• Taxes and contributions in Montenegro are
at level of around 90% of net wage. Just
for comparison, in surrounding countries
this level is: Serbia 70%, Bosnia and
Herzegovina 68%, Croatia 64%,
Macedonia 70%, Slovenia 62%
Unemployment in Montenegro and
measures for its reduction
• MBA analysis of reduction of taxes and contributions on wages
• Workers and employers and the state would have benefits due to reduction
of these charges
Benefits for employers:
• Reduced operational costs;
• Increase of investments;
• By increased budget for wages provision of professional cadre is possible,
and existing workers are more motivated and more professional in their
work by increase of wages;
• Necessity to express wages on minimal level (due to high taxes and
contributions) and usage of cash money (outside of legal flows) for
payment of the rest of agreed wages to workers, would be eliminated;
Unemployment in Montenegro and
measures for its reduction
Benefits for workers:
• Wages of workers would be at higher level, really
expressed;
• Contributions would be paid regularly and in real amount;
• Provided social and health insurance;
Benefits for state:
• Reduction of grey economy;
• Increased employment;
• More stable sources of income for the budget of
Montenegro;
• Increased investments;
• Real expressions of wages and real payments of taxes and
contributions;
• Growth of standard;
Instead of conclusion
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To increase employment in Montenegro, considering
Labor Law, it is necessary to:
replace unnecessary bureaucracy procedures which
burden employers,
not regard enterprises and investors as opponents to
workers,
labor market becomes more flexible, where employment
will be considered as mutually beneficial agreement
between employer and employee,
make the Law in every aspect more flexible from the
viewpoint of potential investors i.e. capital owners.
supplement regulations concerning prohibition of
competition
Instead of conclusion
• If we want economic recovery we must change our
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attitudes concerning doing business
We must understand that a person who invests money
and takes over a risk shouldn’t be a subject to sanctions
and to be subordinate to employees
Many other laws influence ambient for doing business
Through private - public sector partnership make better
conditions for doing business
This is a common interest and private sector represented
by Montenegro Business Alliance is ready to respond
that challenge
THANK YOU FOR YOUR ATTENTION!