between the Government, and the Forum for the Co-operation of Trade Unions

As a result of their negotiations held so far, and according to mutual interests, the authorized representatives of the Government, and the Forum for the Co-operation of Trade Unions (hereinafter SZEF) made an agreement on the important tasks, and measures to be taken with the aim of

• modernizing the public sector, and
• improving the employment, earning, living and working conditions of civil servants and public functionaries, as well as the system of labour relations

as follows:

1. The modernization of public sector

a) The government and the trade unions are convinced that the modernization of public sector cannot be realized without the support of the majority of the concerned employees. This is why they decided to have regular co-operation for the successful continuation, and implementation of modernization.

b) The government enables the trade unions to become acquainted with the conceptions, and draft rules related to the modernization of public sector in due time. It affords possibility to express their opinions, and proposals before the final decision making. The trade unions are ready to realize this constructive co-operation during the process of modernization.

c) The trade unions take note of the fact that the revision of the state, and local governmental tasks fulfilled by the public sector is to be continued. The trade unions consider it an important requirement that the scope of public tasks to be fulfilled should be determined in light of the social demands, the professional points of view, economic influences, and the EU expectations, as well as public services should be rendered under better financial conditions, and on the basis of higher servicing standards, and in the best quality. The trade unions give priority to their participation in the indicated processes, and the government fully supports these demands.

d) In 2001, the government is going to make the EU training programme for the period up to 2004, with the aim of training those employed in the public sector. The government guarantees the central financing, and the institutional system of the preparatory training, as well as the legal and other frames of the right to participate in the preparation. The government enables also trade union officials to participate in the preparation. The conditions of participation are to be laid down in a separate agreement.

e) The government strives for setting up a better regional and institutional structure of rendering and providing public services, and fulfilling the tasks of public administration. This structure should enforce the interests of those receiving the services, and provide the optimum circumstances of servicing in a more efficient way. The basic principles of revision are as follows:

• decentralization,
• regionalization,
• district services built on the settlement centres,
• quality assurance,
• accomplishment of the public service of servicing type.

The trade unions take part in the optimization of civic public services, and public administration, and the wide-spread propagation of electronic governing.

f) In harmony with the trade unions, the government launches a national quality movement for the better, more up-to-date, and economic accomplishment of the tasks of public sector. The movement aims at the integration of local initiatives in the modernization processes, the involvement of those receiving services, and those rendering services in the innovation of public sector, and by it, the integration into the EU quality movement.

2. The situation of the employees of public sphere, career, and regulation

a) The parties agreed that important measures should be taken, in 2001, in order to establish the career-advancement system of public functionaries.

b) The government undertakes to survey the situation of the employees of public sector in 2001, and to prepare the way for measures, to be discussed also with the trade unions, to be taken for a more uniform regulation, the improvement and harmonization of the career, and income conditions . In harmony with the EU joining, the ultimate goal is the development in proportion of the increase of the GDP, the improvement of the quality of accomplishments, and public services.

3. Wage policy, and wage systems

a) In the full knowledge of the actual earning conditions of the year 2000, the government undertakes to realize, on one occasion, and at the beginning of 2001, a wage subsidy that supplements the average earning increase, measured by the Central Statistical Office, to 13 % in all the major branches (sub-branches, and professional branches) of public sphere where a smaller earning increase took place. The government negotiates with the competent trade unions on the details of the planned measures in February. Such payments can be made together with the payment of the March wages and salaries, at the beginning of April.

b) SZEF considers it the result of the negotiations held so far that in the Finances Act of 2001-2002, the government improves the wage conditions of civil servants, and public functionaries, reducing by it the great negative difference between earnings, as compared to the competitive sector. The national minimum wage considerably increases. The government provides the financial sources that are needed to take these measures in the budgetary sub-systems. SZEF insists on the continuation of this process. The government admits the legitimacy of these demands, and encourages, by all available means, and in the forthcoming years, the increase of average earnings in the institutional sphere, to a greater extent than in the competitive sector.

c) The government undertakes to realize, at the beginning of 2002, if needed, a wage subsidy, that will be discussed also by the trade unions, so as the increase of the yearly average earning should reach the extent equal to the half of the inflation rate, and the increase of the GDP.

d) In May, this year, the parties are going to discuss and evaluate the experiences of the accomplishment of wage measures at the beginning of 2001, and in case of necessity, initiate measures for the full compliance with the regulations of the wage increase, and its enforceability.

e) The parties agreed to start negotiations, on expert level, about the modernization of the pay system of civil servants. While elaborating their proposals related to the transformation of the pay system, the experts of the parties should consider the aspects as follows:

• The construction of the pay system of civil servants should be simpler, and more transparent to the employees, employers, and those making decisions etc.
• On the one hand, the general elements of determining the wages and salaries (that should apply to every branch in the same way) are to be elaborated, and on the other hand, possibility should be afforded to express, in a consistent way, the special characteristics of the different activities, and branches/sub-branches in the pay system.
• The pay system of civil servants should be mutually harmonized with that of other public service sectors, first of all, with the pay system of public functionaries. The pay systems, and the budgetary planning, and regulating systems should be also harmonized. It should be noted that the wage systems of public service cannot be solely subordinated to the financial regulating systems, but the wage systems should also fit into the present changing system of budgetary planning, and economy.
• An automatic system of possible yearly wage subsidies should be established for a longer term. The expert preparatory work, in a common professional committee, should be finished in 2001, in order to be able to submit the rules of the modifications of the pay system in 2002, in light of the proposals that have been adopted also by the government.

4. Social dialogue in the sphere of public functionaries and civil servants

a) The parties agree that the reconciliation of interests of public functionaries operated satisfactorily, on national level, in the past period. As regards the future, there is a possibility, and the mutual intention of the parties also exists, to operate, in a balanced and efficient way, the forums for the reconciliation of interests that will be established together with the next amendment of the law on public functionaries.

b) The parties urge and support the system of social dialogue on branch/sub-branch and regional (local governmental) levels, and its efficient operation in the sphere of civil servants.

c) The parties agree to establish a new forum for social dialogue – that will affect the whole range of civil servants. While operating it in due form and with appropriate authority, it can function usefully, and to the mutual advantage of the government, and the social partners alike. It can help to create the so-called inter-branch elements of the service relations of civil servants, and the regulation of the employment conditions and pay system, as well as to realize the necessary and satisfactory harmonization of the differentiated branch interests. In a common professional committee, the parties start to negotiate, without delay and on expert level, on this matter in order that the new forum could start functioning until the end of the first half of 2001.

5. Additional clause

a) The contents of the present Agreement is to be evaluated by the representatives of SZEF, and the Government on a yearly basis.

b) The parties express their intention to make the present Agreement open to the confederation, and the trade unions of public sector that do not belong to SZEF, and they can confirm their adherence, by the signature of their authorized persons, and within 30 days after the Agreement is coming into effect.

Budapest, 9 March 2001

Dr István Stumpf
Minister of the Prime Minister’s Office
Dr Endre Szabó
President of SZEF

This day, the Agreement is being adhered to by:

Dr László Vígh, President
Confederation of Unions of Professionals
Péter Molnár, Executive
Teachers’ Democratic Trade Union
Péter Tarró, President
National Trade Union of Workers in Water Supply