Annual Review 2013 Regional Project on Labour Relations and Social Dialogue Warsaw in November 2013 Slovak Republic ­Labour Relations and Social Dialogue Author: Dr. Marek Švec 1 Executive Summary 2013 as already 2012 can be characterized as a period of profound structural societal, economic and legisla­tive change. It was the result not only of the persisting global economic crisis but also of the outcome of par­liamentary elections won by social democrats under Prime Minister Robert Fico who managed to form a single-party government. Immediately Robert Fico started to implement a political programme focused on three main areas. The flat income tax of 19% was replaced with a progressive tax rate. While maintaining 19% income tax for natural persons with monthly income up to€ 3,311 higher incomes will be taxed with the so called“million­aire’s tax” of 25%. The income tax of legal entities has been increased to 23%. The second area included essential changes in the pension and health insurance systems. In the pension system, the so called second pillar which combines population’s pension-build-up with savings was weak­ened and the first pay-as-you-go pillar was strengthened. In the health insurance system, centralization into a single health insurance institution and the replacement of the current commercial principle in the system of mandatory health insurance are envisaged. The most important change, however, is the significant amendment to Labour Code and act on state active labour market measures, which intends to enhance the protection of worker’s rights and strengthen the so­cial dialogue and the competences of employee representatives. However, the outlined efforts of Prime Minister Róbert Fico are significantly affected by the overall unfavour­able social situation in Slovak society. The low income level increased the number of people threatened by poverty to 1.6 million. High unemployment rate of 14% with a high share of young people, missing reforms in education and jurisdiction and decay of working conditions especially among teachers, nurses and civil servants triggered protest and strike readiness and generates social and political pressure on Robert Fico. In addition Fico is committed to reduce public finance deficit below 3% of gross domestic product(GDP) in order to avoid the EU-fine of 0.2% of GDP(about€ 140 million). 1 Labour Law Association, Metalworkers’ Federation, Faculty of Social Sciences, University of SS. Cyril and Methodius in Trnava 1