The results of the Working Conditions Survey

1. Introduction

Survey „Information on working conditions“ (IPP) annually monitors the working and wage conditions for employers in the Czech Republic based on an analysis of collective agreements. Under the auspices of the Ministry of Labour and Social Affairs (MoLSA), this survey has been conducted regularly since 1993. Its purpose is to map and analyse the content of collective bargaining in the Czech Republic. The aim of the survey is to provide the state and other institutions (CNB, Research Institute for Labour and Social Affairs (RILSA), etc.) an overview of trends of collective bargaining and to provide contractual partners adequate information for further negotiations on an enterprise level or for negotiations in respect of a higher level collective agreement.

The Commission composed of the representatives of the Ministry of Labour and Social Affairs, the Czech Statistical Office, the Ministry of Finance, the Czech National Bank, the Czech-Moravian Confederation of Trade Unions, the Confederation of Industry of the Czech Republic, CERGE-EI, the University of Economics in Prague and other institutions comments on the course of the investigation and the outputs. IPP is carried out by TREXIMA, Ltd.

The survey focuses on agreements of social partners in the areas of:

• cooperation of contracting parties
• remuneration of employees
• length of working hours, forms of work, increase of holiday, changes in employment
• employment rate and employees' professional development
• working conditions and benefits
• employees' professional development, fair treatment, industrial safety and health protection at work

The IPP survey monitors enterprise collective agreements and higher level collective agreements. The most important criterion for classification of results is whether the investigated economic entity belongs to a business or non-business sector. The business sector includes economic entities which remunerate with a wage pursuant to Sec. 109 (2) of Act No. 262/2006, the Labour Code; the non-business sector includes entities which remunerate with a salary pursuant to Sec. 109 (3) of the Labour Code, as amended. Input data are entered electronically by means of the acquisition programme „EKS”, or by direct collection of collective agreements.

In 2023 selected data about wage and working conditions were analysed from 1,782 collective agreements from 28 different trade unions (TU), which represented almost 828 thousand employees. In 2023, 21 higher level collective agreements or their amendments were also analysed and evaluated.

2. Aim of Collective Bargaining

The aim of collective bargaining is to agree on the working conditions of employees (including remuneration) and to regulate the relationships between an employer and the trade union organization (employees' representative) operating in the enterprise (e.g. the scope of provided information, the form of discussions on important issues, etc.) with the aim of ensuring enterprise, branch and nationwide industrial harmony. In order to achieve these objectives, the state (that sets minimum standards) and both contracting parties need a comprehensive and quality information base, which will enable to make comparisons both with other enterprises and economic possibilities of the employer. The function of a collective bargaining agreement (CA) is to create conditions which will help the company or institution secure stability and enable it to concentrate on its strategic objectives. In regard to employees, the CA guarantees them fair wage and good working conditions.

An important part of collective bargaining includes higher level collective bargaining agreements and the extension of their binding effect on employers in the relevant line of business. The main purpose of this institute is to prevent any undesirable competitive advantages among comparable employers due to substantially lower labour costs that would be to the detriment of employees. At the same time the extension of the binding effect of higher level collective agreements is recognized as a provision of the state to support collective bargaining according to the Conventions and recommendations of the International Labour Organization.

3. The survey results for the period 2023 based on a sample of 1,298 Enterprise Collective Agreements in the Business Sector

Remuneration – minimum monthly wage rates

The monthly wage rates were negotiated in less than 42% of Enterprise Collective Agreements (ECA) this year. As some employers agree on ranging from-to wage rates in their ECA, the Working Conditions Survey (IPP) monitors only the lowest level of the relevant tariff scale.

The survey results of enterprise collective agreements showed that the dynamics of monthly wage rates negotiated for the 12-scale tariff system has changed in comparison with 2022. While in 2022 the dynamics ranged from 4.7% to 5.7%, with the highest wage rate increases for the lowest earners, in 2023 the dynamics accelerate significantly and reach a level of 8.0% to 9.2%. This year, the dynamics show an upward trend in all tariff levels, with the highest increase in wage tariffs for high-income employees.

Further the analysis showed considerably different level of the minimum monthly wage rates in individual Trade Unions this year. While the wage level of employers who are part of Trade Union for UNIOS reaches only 28,418 CZK per month at the 12th tariff scale, employers of the Trade Union for Mines, Geology and Oil Industry pay 79% higher (50,973 CZK per month) wages at the same tariff.

Wage development

More than 74% of the analysed enterprise collective agreements regulate the field of wage development, of this 0.4% of the ECA in the form of maintaining the level of the average wage. This year, a growth of any of the wage forms is included in 74.1% of the ECA, which means a increase in ECA by 3.3 p.p. compared to 2022. The increase wage is not expressed by one figure in enterprise collective agreements, but is represented by several different forms - by increasing the average nominal wage (19.5% ECA), by increasing wage scales (49.5% ECA), by maintaining real wage (7.8% ECA), by increasing total volume of wage funds (11.6% ECA), or by increasing the average real wage (0.5% ECA). An analysis of the data showed that in 2023 an increase of 6.1% was agreed to in enterprise collective agreements regulating wage increases by increasing the average nominal wage. In ECA in which social partners regulate wage trends by increasing wage scales, the average agreed increase amounts to 7.1%. As concerns agreements in which the wage development is agreed in the form of an increase of the average real wage, the average agreed increase amounts to 2.1%. This year, the increase in average real wages remained at about the same level as in 2022, while average nominal wages increased by 1.7 p.p. and wage tariffs rose by 2,1 percentage points.

Level of most frequently used premiums

The premiums are an integral and important part of enterprise collective agreements. The survey information on working conditions focuses especially on premiums, which appear most frequently in enterprise collective agreements. Such premiums include namely premiums for overtime work, night work, work on Saturdays and Sundays, work on public holidays and work in difficult conditions. Regarding the number of ECA and an average agreed amount of extra pay, these levels remain on the same level as in 2022.

Almost 84% of enterprise collective agreements include the amount of premium for overtime work. This year a premium for overtime work was agreed to on working days at 45.8% ECA, for overtime work on public holidays (Saturdays and Sundays) at 33.3% ECA and for unspecified overtime work at 37.5% ECA. In the business sector, the average level of the agreed premium for overtime work on working days amounted to 26.3% of average wages and premium for overtime work on Saturdays and Sundays 47.4% of average wages.

An arrangement on wage supplement for night work is included in 82.3% of enterprise collective agreements and its minimum amount is at least 10% of the average earning pursuant to Section 116 of Act No. 262/2006 Coll. The analysis evaluated the average value of the premiums in enterprises at the level of 12.4% of average earnings with 51.3% of ECA. This premium can be agreed, in accordance with the option stipulated in Sec. 116 of the Labour Code, in a different way, for example in hourly rates (39.6% ECA), when the average value of the premium amounts to 21 CZK per hour.

The premium pay for work on Saturdays and Sundays was agreed to in 79.2% of enterprise collective agreements. The average premium pay reached to 23.4% of average wages this year (72.1% ECA), which means that its value is similar as in 2022. If we compare the agreed values of this premium in individual trade unions, its level is the highest in the TU of Banking and Insurance with an average value amounting to 37.4% of average wages. On the contrary, the lowest level of this premium in the amount of 10% of average wages is shown with the TU of Catering, Hotels and Tourism and the TU of Postal, Telecommunication and Newspaper Services.

More than 77% of enterprise collective agreements include an agreement for contracting parties on the premium for work on public holidays, where the average amount of this premium amounts to 102.5% of average wages.

57.0% of enterprise collective agreements include an agreement on the provision of the premium for work in difficult conditions. The analysis recorded that this year maintain the average value of this premium at approximately the same level as in 2022. In 2023 this premium amounts to 10.6 CZK per hour (agreed in 36.8% ECA), 10.4% of the basic rate of minimum wages (agreed in 16.8% ECA) or 10.8% of average wages (agreed in 5.5% ECA).

Benefits and working conditions

Canteen meals

The most frequent benefit provided to employees in enterprise collective agreements this year is the employer's contribution to canteen meals. The entitlement to this contribution was agreed in 95.0% of enterprise collective agreements in 2023. Of this number, almost half of all employers make a contribution towards canteen meals from expenses in crowns or as a percentage of the meal price. The average amount of the contribution determined as a percentage of the meal price equals 54.7% and approximates the maximum amount specified in Sec. 24 (2)(j)(4) of Act No. 586/1992 Coll., the Income Taxes Act, as amended, for recording these contributions in expenses. The amount of the price paid from the employer's expenses then amounts to 61.7 CZK in 2023. In 13.3% of the ECA, employers contribute to their employees for canteen meals also from a social fund or another fund created from profit. The average contribution agreed to here amounts to 17.5 CZK per meal or 25.8% of the price of the meal. There is a sample of almost 23% ECA in the survey that contain an agreement on the provision of the canteen catering allowance; however, they do not stipulate the actual amount of such allowance.

This year, the employer's contribution for canteen meals was agreed also for former employees (almost 15% of the ECA), employees during a period of leave (2.2% ECA) and employees during the period of temporary inability to work (almost 2% ECA).

Employer’s pension plan

Arrangements for the provision of employer contributions towards a pension plan have become another important part of enterprise collective agreements. This year, 68.9% of enterprise collective agreements contained this arrangement, when the average monthly employer contribution increased by 35 CZK compared to 2022 and amounts to 849 CZK. This year the minimum amount of allowance amounts to 641 CZK, and the maximum amount of the granted allowance amounts to 1,038 CZK. The data analysis showed significant differences in the amount of the contribution of employers covered by individual trade unions. While the maximum average value of the contribution of the employers covered by TU of Commerce amounts to 411 CZK/month, this contribution is almost 4 times higher for the employers covered by Trade Union STAVBA and amounts to 1,501 CZK/month. The survey has shown that compared to 2022, this year has recorded a slight increase, by 2.0 p.p. in the number of enterprise collective agreements in which the payment of this contribution is conditioned by fulfilment of specific conditions (agreed in 55.2% ECA). This year’s survey disclosed a certain number of agreements (13.3% of enterprise collective agreements) in which this contribution is determined as a percentage of an employee’s monthly assessment base and averages 3.1%.

Life insurance

Life insurance contribution is agreed in 24.5% of enterprise collective agreements this year, which is approximately the same number of enterprise collective agreements as in 2022. The average amount of this monthly contribution provided by the employer increased compared to 2022 by 29 CZK and amounts to 745 CZK per month. The minimum allowance amount granted this year is 587 CZK, and the maximum amount of such allowance amounts to 886 CZK.

Social fund

To ensure certain social needs of employees, employers can create a social fund or they can use other social programmes (without differentiation of financial resources). The survey implies that 32.4% of organizations determine in their corporate collective agreements the creation of social funds and 20.2% of organizations create other social programmes. The data analysis has shown that the creation of the social fund is in this year mostly subject to the volume of wages paid, when its average level is 1.9%, like other social programmes. Should the organizations use the appropriations to the social fund in the form of an absolute sum per one employee from profit, such sum amounts to 2,423 CZK or 7,117 CZK for other social programmes. In 19.4% of all corporate collective agreements employers can draw the funds in the form of drawing accounts.

Working time and holidays

Working time

90.8% of enterprise collective agreements contain an agreement on working time, of which 59.7% specify uniform working time for the whole organization and 31.1% contain an agreement on different working times according to different systems of shift work.

Analysis of data has shown that in 80.1% of enterprise collective agreements, which stipulate uniform working time for the whole organization, the weekly working hours of 37.5 hours/week have been agreed to, while working hours of 40 hours/week have been agreed to in only 18.5% of enterprise collective agreements.

Regarding work in a shift system, the weekly hours have been agreed to as follows: 1-shift system of work - most often the working hours have been agreed to at 40 hours/week (86.6% ECA), 2-shift system of work – 38.75 hours/week (70.3% ECA), multishift system of work – 37.5 hours/week (96.0% ECA) and in continuous system of work – 37.5 hours/week (90.6% ECA).

Leave

The Working conditions survey also monitors the range of the holiday leave for employees, providing above the limit specified by the Labour Code, according to which the basic claim for the holiday leave amounts at least to 4 weeks per calendar year. The extended holiday leave was provided in 89.6% of enterprise collective agreements this year. An extension of the holiday leave by one week is arranged in 78.2% of enterprise collective agreements and 3.2% of enterprise collective agreements extend the holiday leave by two weeks. The survey has shown that only 8.2% of enterprise collective agreements contain an agreement on an increase of leave entitlement in days. The average number of days by which leave was increased amounts to 4.6 days.