Abstract………………………………………………………………………………..1
Introduction …………………………………………………………………….…….. 1
Problem description …………………………………………………………..………  2
Policy options ………………………………………………………………..……….  2
Conclusions and recommendations …………………………………………....………. 3
Policy paper for Montenegro ………………………………………………...……….   4
Problem Description ………………………………………………………..………… 4
Conclusions and recommendations …………………………………………....………. 5

This policy paper contains the main findings of the research on the development of social dialogue in the SEE countries. The goal of the research was, on the basis of the analysis of the development of social dialogue in the EU countries, countries in transition, and especially in the SEE countries, to prepare the recommendations for the future development of the social dialogue in Montenegro.

The transition process has its social cost. Due to this, socially acceptable price of the transition process was hitherto the subject of social conflicts in SEE countries, in the same way as future social conflicts, that will more or less shake all societies in SEE, will be primarily determined by social consequences of necessary reforms in them.
SEE countries are at the historical crossroads between conflict and peace. The period of stabilisation of political relations in almost all SEE countries is starting after years of ethnic and ideological wars and conflicts. This means that the countries of this region have to build and make functional the mechanisms of social dialogue and social peace, as one of the vital issues of their future.

The most common approach in achieving the social peace in the SEE countries was to institutionalise the mechanisms for social dialogue and tripartism. The main institutions of tripartism in the SEE countries are the Social and Economic Councils.

Tripartite councils in all SEE countries have predominantly a consultative role, but sometimes governments are obliged to consult them when a law in the area of economic relations or social policy is contemplated or prepared for enactment. Economic and social councils usually deal with the wage policy, pensions, active employment policy, working conditions, competitiveness of the national economy, consequences of introduction of new technologies, occupational health and safety, problems of national development, social issues, workforce retraining, etc.
 

Problems in the development of ideas, institutions and practice of social dialogue faced by SEE countries are numerous. The prerequisite for the establishment of social dialogue is the existence of authentic social partners, which have not existed here before, or else were very weak and very similar to government structures.

The reasons for the founding of social and economic councils were partly in the pressure of trade union organisations which saw bipartite or tripartite dialogue as an opportunity for their greater participation in the creation of the policy on the economic and social plan, and partly in the attempt of new authorities to harmonise labour legislation with the EU laws and practices.

Since trade unions were the main initiators of the institutionalisation of tripartism and social dialogue, their role is particularly important. If trade unions face membership erosion, if they spend more energy on solving disagreements with other trade unions, the less capacity they will have for full exercising of the role of social partner. Trade unions in SEE are generally much stronger in the public sector of economy, and less-well organised in newly founded (usually small and medium-sized) enterprises. By contrast, new employers’ organisations are based in newly founded private enterprises. Such imbalance of power and interest represent additional problem for quality development of social dialogue in SEE.

Practice in Southeast Europe so far leads to the conclusion that social dialogue, despite many obstacles and weaknesses, started to function and that it produced the best results in the creation of institutional and legal assumptions for new labour relations in the conditions of transition to market economy, resolution of major conflicts in the world of labour and participation of trade unions and employers in the formulation and implementation of government’s economic and social policy measures. Tripartism has played the key role in the reduction of social tensions and in providing social peace.

Three main functions of tripartite institutions in SEE countries could be identified:

- participation in the creation of institutional assumptions for new industrial relations, as well as in eliminating obstacles in the way to the development of labour relations in the conditions of market economy;

- participation in the broader elaboration and implementation of government measures (primarily in the area of wage policy, social welfare, employment) and

- settlement of collective labour disputes.

Comparison of the forms through which social dialogue is conducted in the EU and in SEE countries indicates that similar forms conceal different substance. In SEE countries participants in social dialogue are still not strong enough to be really able to participate in consultation and harmonisation about the character of measures of economic and social development and consequences that these measures could produce. Hence, they are not able to assume responsibility for pursuing adequate policy harmonised on tripartite basis. Therefore, the course of social dialogue in national tripartite institutions is only an imitation of democracy, a political theatre play with participation of social partners, whose aim is to provide marketing promotion and thus strengthen their insufficient legitimacy or power.

In such situations, the institutionalisation of social dialogue and tripartism serves only as a façade, as a cover to governments for their alleged democratic legitimacy. “Façade democracy” thus obtains only another ornament, without actual meaning for the total social life in the countries of the region. Often social partners also lack sufficient bargaining capacity with which they can bring life and responsibility into social dialogue institutions which thus remain only formal and without actual influence on social development. The gap between new democratic laws and undemocratic reality is still too wide and only the development and strengthening of social partners can contribute to real democratisation of social life in the countries of the region.

In this regard, tripartism is both the “product” and mobiliser of political and economic transition. It ensures consolidation of actors and institutions of industrial relations and contributes to greater sensitivity of the ruling parties and hence to mitigation of social tensions.

For faster overcoming of the inherited and newly-emerged obstacles to stable social development of SEE countries it is necessary to:

1. Develop the culture of social dialogue and social partnership. The philosophy of negotiation, compromise and responsibility should be developed and implemented both among new private employers and in their associations and also in trade unions as the key actors of democratic pluralist system of industrial relations. Economic and social councils gradually contribute to the stabilisation of conflicting relations between the government, employees and employers, creating preconditions for social peace and, as the bodies for tripartite dialogue, function as a mechanism for avoiding labour disputes and larger social conflicts and as a central place where differences between the representatives of labour, capital and government are reconciled.

2. Strengthen the specific role of the Governments in the development of social dialogue. In SEE countries the government has a specific role in the development of social dialogue. On the other hand, it sets the basic rules of the game, the legislative ambience and social environment for the establishment and development of social dialogue, but on the other hand, governments, together with trade unions and employers, participate in social dialogue as partners in discussion taking place in economic and social councils. Objectively, governments have the most powerful role in social dialogue, because they control the entire government apparatus and have political power. In the present political relations in SEE countries, such role of the government is actually contradictory. On the one hand, they formally advocate the need to develop civil society and social dialogue, and, on the other, due to a range of factors, they realistically tend to preserve the instruments of social dialogue only at the level of support for ongoing reform projects they promote as governments.

In addition, greater political power of governments, as a rule, resulted in their lesser interest in social dialogue, while governments with weaker parliamentary support have shown more interest in the participation in social dialogue and in the development of its capacities and actual effects.

3. Increase the influence of the ILO in the establishment and implementation of the international standards in the sphere of social partnership in the SEE countries. Development and institutionalisation of tripartism contribute to acceleration of the harmonisation of labour and social legislation of SEE countries with international norms and standards. For SEE countries burdened with the legacy of undemocratic past, social dialogue represents a very important assumption for successful establishment of social consensus and stable and long-lasting social peace and economic development.

4. Speed up the preparatory processes in the SEE countries related to the integration into the EU. The harmonisation of the labour legislation in these countries with the European standards can significantly contribute to the further strengthening of the institutions and practice of social dialogue in them.

5. Develop faster the development projects based on the assistance of the Stability Pact, especially those that are planned within the initiative for social cohesion.

Montenegro was the last country in the region of South East Europe to establish the Social and Economic Council. The Government has established it through a Decree adopted in February 2001, while it was actually founded in February 2002. During the year 2002, the Council held only two sessions, and it's composition is still incomplete, from the aspect of the Decree. Although the Governmental Decree defines that the representatives of the NGO's are supposed to participate in the Council, as well as the representatives of the Montenegrin workers temporarily employed abroad, these posts have not been filled, yet.

This fact already says enough about the quality of work of this body. Apart from that, Montenegrin Social and Economic Council is faced with the esential problems of legitimacy and representativeness of the social partners that it gathers. Namely, the employers are represented in the Council by the Chamber of Commerce, which is against the international standards. (Standards in this field are defined by the ILO – Recommendation No: 113 on the consultations at the level of industries and at the national level from 1960; Convention No: 144 on tripartite consultations – international labor standards from 1976, and Recommendation No: 152 on tripartite consultations from 1976, etc.) In these documents, among other things, it is defined that the social partners can only be voluntary organizations of the workers and the employers, and not the chambers of commerce that exist on the basis of the legal obligations of the companies to pay some contributions to them.

Social and Economic Council hasn’t founds for it's activities, but it's members receive a monthly compensation for their «work» in the Council. These are just some of the reasons why the Social and Economic Council of Montenegro practically does not look like a body for tripartite discussion and harmonization of the views of the legitimate social partners, but is closer to the model of a round table, discussion group or a Q&A meeting, with no specific conclusions or agreements, and without any conclusions that would be obligatory for anyone. It is true that until now the Council didn't do practically anything, thus, this conclusion may sound too harsh. But, irrespective of that, it is clear that at the time of the establishment of the Council a mistake was made that causes the problem of it's legitimacy and financing of it's work, which results in the current existence of the Council only as a democratic facade, with no true influence on the social and economic development of Montenegro and the prevention of conflicts and collective labor disputes.

As Montenegro is currently preparing to implement a whole set of reforms in the field of labor and social legislature, which will have serious social consequences, the role of the Social and Economic Council will have to become more and more important. The Social and Economic Council of Montenegro, as it is today, cannot respond to those challenges. Because of that it is necessary to define a new model of work and organization of the Social and Economic Council.

In order to meet those needs the following recommendations are proposed:

1. Speed up the reforms of the labor legislation

- Adoption of the modern labor and social legislation is a necessary precondition for the successful functioning of the market economy and for the speedy preparations in Montenegro to start the negotiations related to the accession to the EU. For that reason it is necessary to ratify in the Montenegrin Parliament the European Social Charter, as well as a number of ILO Conventions, primarily the ones related to the right to collective bargaining and the bipartite consultations.

- Harmonization of the labor legislation with the European social law is one of the main preconditions for the faster inclusion of Montenegro into the European integration processes. For that reason, an important precondition for it is a greater liberty and a greater influence of the collective bargaining and the social dialogue. Bipartite and tripartite harmonization is especially needed in order to achieve the social cohesion for the more successful economic and social reforms, in order to achieve pluralism, democratic and stable system of industrial relations, and in order to reduce the negative social effects of the privatization and the reforms.

- Having in mind a relatively large problem of non-paid salaries to the workers, the new labor legislation should define a realistic possibility for the exercise of the rights of the workers to the guaranteed salary through the creation of a special fund for the payment of guaranteed salaries, in accordance with the ILO Convention no. 131.

- As the system of court protection of the rights of the workers is very inefficient, it is necessary to establish as soon as possible the labor courts, as specialized, professional institutions that protect in the most efficient and comprehensive manner the individual and the collective rights of the workers. Also, administrative protection of the workers through the labor inspection is not giving desired results, thus, the labor inspection should be given greater authority, in accordance with the ILO Convention no. 81.

2. Further development of social dialogue

- It is necessary to create the systemic conditions for the greater freedom in collective bargaining and bipartite and tripartite negotiations. Labour relations and the social legislation have to be changed and improved, in order to adopt and implement the international labour standards (including the signing of the ILO Convention 144 on tripartite consultations, and Convention 154 on the improvement of the collective bargaining), and they also need to be harmonised with the European social model.

- It is necessary to develop the culture of social dialogue and social partnership, to implement the philosophy of bargaining, compromise and responsibility among the new private employers and their associations, as well as among the unions as the fundamental elements of the democratic, pluralist system of industrial relations. The new employers should accept the trade unions and tripartism, and the Government should take the leading role in the promotion of this process.

- Tripartism and the social dialogue have proven to be the most efficient methods for the development of industrial democracy. No economic system can survive and develop without the social dialogue – the participation of the social partners in the preparation and adoption of decisions on the basic directions of the economic and social development. This is especially important in the case of Montenegro, which is faced with the problems of late transition and devastated economy.

- The social dialogue is a necessary precondition for the creation and implementation of the economic policy with the social dimension in the conditions of transition towards the market economy and the structural adjustment. Exactly through the development of tripartite relations and the social dialogue it is possible to achieve the necessary social consenzus for the successful implementation of the reforms in Montenegro. In that sense, the establishment of the Social and Economic Council, the way it was done in Montenegro, is not enough. This body should become legitimate and have legitimate representatives in it. It has to be provided with the funds necessary for the regular and continuous activities related to the solution of the most important issues related to the economy and the needs of the population in general.

3. Adoption of the Law on the Social and Economic Council

 - For that reason it is necessary to adopt the Law on Social and Economic Council that would establish this body in accordance with the international standards and the needs of the new labor legislation in Montenegro.

- The new Law must contain the criteria for representativeness of the social partners, in order to timely prevent future conflicts between the trade unions and the increasing number of the employers’ organisations.

- The new Law should prescribe the conditions, manners and models of participation of the overall civil society (NGO’s) in the discussions on the economic and social development of Montenegro.

- The social partners and the NGO’s have to participate actively in the preparation of the new law.
 

 June 2003                                                                                                                                             Dragan Djuric