VZCZCXRO2605
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSQ #0066 0281125
ZNR UUUUU ZZH
R 281125Z JAN 08
FM AMEMBASSY SKOPJE
TO RUEHC/SECSTATE WASHDC 6951
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE 0175
RUEHNO/USMISSION USNATO 3741
RUEAIIA/CIA WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RUESEN/SKOPJE BETA

UNCLAS SKOPJE 000066 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/SCA 
 
E.O. 12958: N/A 
TAGS: ELAB PHUM ECON EAID PGOV MK
SUBJECT:  MACEDONIA: NEW ERA IN LABOR RELATIONS 
 
Summary 
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¶1.  (SBU) The GOM and the Federation of Free Trade Unions (KCC) 
signed a collective bargaining agreement for public sector workers 
on January 16.  The agreement will not directly increase civil 
servants' wages or benefits, since the GOM is already providing 
public employees with a 34 percent wage increase over three years. 
However, the agreement does clarify some important labor rights for 
government employees.  Most significantly, the process of the 
negotiation signified the end of an era in which government 
officials and labor leaders had enjoyed a too cozy relationship 
which did little to advance workers' interests.  End summary. 
 
Expanding Labor Rights 
---------------------- 
¶2. (U) The collective bargaining agreement signed by the GOM and the 
Federation of Free Trade Unions (KCC) replaces a previous agreement 
that expired in 2004.  The new agreement focuses primarily on 
clarifying the rights of public sector employees and union leaders, 
including provisions that union representatives have the right to 
attend management board meetings, and employers are obligated to 
provide logistical support (office space, etc.) to the employees' 
union. 
 
¶3. (U) The agreement does not directly increase salaries or 
benefits.  The GOM already is providing a 34% salary increase to 
public employees over the period 2007-2009.  KCC requested that the 
agreement include a minimum wage for public sector employees, which 
does not currently exist.  The GOM refused, arguing that it could 
not afford to set a minimum wage that would then be used as the 
basis for calculating all wages, and would likely lead to wage 
increases above the already announced pay increase.  The union did 
win agreement from the GOM that benefits, such as food and travel 
allowances, would be adjusted annually.  The allowances have not 
been increased for several years. 
 
¶4. (U) The collective bargaining agreement applies to all public 
sector employees.  Unions representing specific categories of public 
employees, e.g.; teachers, doctors, etc., can negotiate a separate 
agreement for their members, as long as the agreement does not 
conflict with the collective bargaining agreement. 
 
KCC Strengthens Role As Independent Union 
----------------------------------------- 
¶5. (SBU) The fact that KCC succeeded in negotiating the agreement 
with the GOM signifies an important milestone in Macedonia's labor 
relations.  Past collective agreements have been negotiated by the 
Federation of Trade Unions (CCM), the successor of the socialist era 
labor federation.  There were credible allegations in past years 
that CCM's leaders had overly close ties with government officials, 
making CCM susceptible to political influence.  CCM also received 
direct financial support from the GOM.  KCC was formed in 2005 as an 
alternative to CCM, and appears to be operating as a relatively 
effective, independent representative for its members. 
 
¶6. (SBU) KCC earned the right to negotiate with the GOM as the only 
union organization able to demonstrate that it represents over 33 
percent of public sector workers.  The 33 percent threshold is a 
requirement of the labor law which was passed when CCM was still the 
undisputed labor leader.  Initially, the GOM appeared hesitant to 
begin negotiations with KCC.  In early 2007, the Embassy weighed in 
and told GOM officials that if KCC was the only labor federation 
able to meet the legal requirements, then the law should be followed 
and the GOM should deal with that organization.  CCM lambasted the 
GOM for negotiating with KCC, but CCM has clearly lost its once 
favored status with the GOM, as demonstrated by the successful 
KCC-GOM negotiations. 
 
Comment: 
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¶7.  (SBU) The labor climate in Macedonia has improved considerably 
over the past three years.  When the teachers union, SONK, broke 
away from CCM and became independent in 2005, CCM's leaders, with 
the apparent collusion of GOM officials in the previous government, 
tried to remove SONK's leaders and to require SONK's members to 
rejoin CCM.  With support from us and international labor 
federations, SONK won its battle to remain independent.  SONK then 
went on to form KCC with other independent unions and some former 
members of CCM.  Now KCC appears to be effectively advocating for 
its members, while CCM is becoming increasingly irrelevant.  End 
comment. 
 
Milovanovic