Labour ministry plans controversial cuts to state employees’ salaries

Come 2011, the Ministry of Labour wants to see state employees’ salaries cut by 10%. That was the main point of a proposal put forward on Thursday as part of the coalition’s pledge to reform the public sector. The relevant unions wasted no time in voicing their absolute opposition to a plan that will likely be a matter of heated debate for months to come.

Jaromír Drábek, photo: CTK

Reform of the public sector has been expected of the new, centre-right government since elections at the end of May. But the first actual move in that direction came on Thursday, with a proposal from the labour minister, Jaromír Drábek, to systematically change the way state employees have been paid for the last 18 years. The plan is to reduce salaries by 10% and stop incremental pay rises based on tenure. Mr Drábek explained what he saw as the benefit of this for Czech Television on Thursday evening.

“The concept used until now has significantly rewarded people for the number of years they have worked, rather than what we want to strengthen, which is the quality of the work being done. If workers are automatically rewarded for the number of years they’ve spent in their position, there’s no motivation in that. What we really want to do is to significantly motivate those working in the state administration towards greater productivity, not towards working in state administration for as long as possible.”

Alena Vondrová, photo: CTK

In addition to the hope that greater reliance on bonus payments will raise the effectiveness of employees, the state aims to save up to CZK 35 billion. At present the proposal is still in the refinement stage, but the Union of Public Sector Employees, headed by Alena Vondrová, has already said that that there was no room for negotiation on such a radical change.

“This change does not only involve the state administration, it involves all state employees with the exception of regional teachers, policemen and firemen. It affects professional soldiers, it even affects clergymen. It involves the entire public sector. I think it is objectively defective. Today, public sector employees have 70% of their salary guaranteed by law and 30% constitutes personal bonuses. The minister’s proposal is to turn this upside-down, with a salary-to-bonuses ratio of 40/60%; in certain exceptional cases it would even be 30/70%.”

It is clearly a tricky debate, and with 640,000 people to be affected it is probable it will reach a sharp pitch before it is sent to Parliament as an amendment to the Labour Code, particularly as the current salaries of state employees in the Czech Republic are not high. A teacher with 16 years experience, for example, could see their pay drop from roughly 1,100 dollars a month to around 830 dollars in the plan’s stricter version.

Meanwhile, even the lighter version would mean a pay cut of 90 dollars a month for a young driver currently making about 478 dollars a month according to state employees’ salary tables. Ms Vondrová has said that if the proposal is implemented, workers should take to the street en masse.