New Labour Code takes effect

In April 2002, a new Labour Code came into force in the Slovak Republic. The new Code lays down the basic rights and obligations of employers and employees in the business sector, covering matters such as employment relationships, pay, working time and collective labour relations. The aim is to meets the requirements of the market economy and balance the interests of employers and employees, while harmonising Slovakian labour legislation with EU law. The social partners have differing views on the new Labour Code.

A new Labour Code came into effect in the Slovak Republic on 1 April 2002 (SK0206101N). The Code had been approved by the National Council of the Slovak Republic on 2 July 2001 and was published in the Collection of Laws as No. 311/ 2001.

Establishment and development of the Labour Code

The previous Labour Code was adopted in 1965, unifying the then fragmented labour legislation and facilitating its application. It was a significant contribution from the point of view of unified codification of the employment law framework for both employees and employers. Its application in practice meant a uniform status for of all employees and equal employment conditions, because the Labour Code covered all employees regardless of whether they worked in the public service, state administration or business organisations.

The political and subsequently social and economic changes after 1989 inevitably required changes in the entire legal system, including labour law. The legal regulation of labour relations gradually started to adjust to a market economy. Labour law reform began in 1991 with the adoption of the Employment Act, the Act on Collective Bargaining and fundamental amendments to the Labour Code. In the Labour Code, the'contractual principle' was strengthened, the participation of employees enhanced, and the influence of the state reduced.

Further amendments to the Labour Code after 1991 began to take greater account of international standards and treaties, mainly by harmonising the Code with theCouncil of Europe'sEuropean Social Charter,International Labour Organisation (ILO)Conventions and European Union Directives. Gradually, the legal protection of employees was intensified, health and safety protection at work strengthened, working conditions made more flexible, and employees' protection in the event of their employer's insolvency provided.

However, these changes were not sufficient in terms of the process of preparing Slovakia for EU accession, or of the need to take into account the different types of labour relations required for work in the civil service or public services. These factors led to a decision to prepare a new Labour Code. During its preparation, an attempt was made to improve the balance between the appropriate protection of employees and the requirements of employers.

The new Labour Code which came into force in April 2002 regulates labour relations for employees in the business sector, which are contract-based, and it concerns approximately 1.5 million employees (separate laws govern labour relations for employees in the public sector). The new Labour Code seeks to meet the requirements of the market economy, highlighting the principles of freedom, democracy and the contract-based nature of relationships. The new Code regulates only the basic obligations of employees and employers and minimum standards for social rights.

Main points of the new Labour Code

The new Labour Code is made up of 11 parts, divided into 256 articles, as follows.

  1. General provisions. This part covers: the legal force of the Labour Code; the position of the employee and the employer; the prohibition of any discrimination; and measures relating to employers' insolvency - meeting employees claims arising from the employment relationship in the event of their employer's insolvency and information obligations over insolvencies.
  2. The employment relationship. This includes: the establishment of the relationship; the types of contracts; the ways of terminating employment relationships; collective redundancies; and the basic obligations of both employees and employers. New issues include: a requirement for the employment relationship to be established only in the form of a written employment contract; the introduction of the term'domestic employee' to refer to home work; and procedures applicable in the case of collective redundancies.
  3. Working time and rest periods. This includes rules on: working hours (with a maximum of 40 hours a week); rest periods; breaks at work; night work; overtime work; and paid leave (with a basic annual holiday of four weeks).
  4. Wages and earnings. The main principle for remuneration is that conditions of remuneration must be specified exclusively on the basis of the contractual principle. In the event that no conditions for remuneration of employees have been agreed upon in the relevant collective agreement, the Labour Code establishes an obligation for the employer to lay down such conditions in the employment contract. The law defines: wages; minimum wages; wages for overtime work; wage compensation for public holidays; and pay premia for night work and for work in a more demanding and harmful environment etc. It also specifies the term and methods for payment of wages, and wage deductions (eg taxes and contributions to social security funds).
  5. Time off work. This part defines the types of time off work and the wage compensation during time off for selected activities, such as performance of trade union functions or participation in education.
  6. Labour protection. This covers compensation for losses arising in the event of accidents at work or occupational illnesses. It lays down the obligations of employers, the rights and obligations of employees, and the tasks of trade unions in this area.
  7. Company social policy. This deals with: catering facilities for employees; education and training for employees; the employment conditions for men and women taking care of children; the working conditions for adolescents; and medical examinations. Maternity and parental leave is also covered here: women are entitled to maternity leave lasting 28 weeks around the birth and to take care of the new-born child; and, in order to extend the period of parental childcare, employers are obliged to provide parental leave to those men and women who apply for it, in the period up until the child is three years old.
  8. Compensation for damages. This includes: employers' and employees' accountability for damages and losses; methods of compensation for damages; and earnings in the event of accidents at work.
  9. 'Agreements for work performed outside the employment relationship'. This refers to forms of work which are not considered as normal employment relationships, such as'work performance' agreements or agreements on temporary jobs for students.
  10. Collective labour relations. The Code provides that employees are entitled to collective bargaining, co-decision making and negotiations. They also have a right to information and to monitor activities. During collective bargaining, employees are represented by trade union organisations. The union organisations conclude collective agreement with employers that regulate employment and working conditions, including wages and relations between employers and employees, in a more advantageous way than provided for in the Labour Code (or by any other relevant labour law). In the event that there is no trade union organisation in workplaces with at least 20 employees, works councils are to be elected. Such works councils have rights to negotiation, information and monitoring vis-à-vis the employer. In workplaces with fewer than 20 employees but more than five, shop stewards are to be elected. The Labour Code also specifies the conditions for the establishment of European Works Councils; however, these will enter into effect only when the Slovak Republic joins the European Union.
  11. Transitional and final provisions.

Main changes

For employees and employers, the new Labour Code introduces the following main changes:

  • it enforces the principle of equal treatment of employees and extends the prohibition of any discrimination (employees who believe that they have suffered discrimination can take the case to court);
  • it obliges the employer to inform employees in the event of the establishment, alteration and termination of the employment relationship, with the aim of providing employees with better protection against possible breaches of their rights;
  • it bases the establishment of the employment relationship exclusively on a written employment contract;
  • it comprehensively regulates working time and its structure, and increases the flexibility of the employment relationship by providing employees with a possibility to perform agreed work at home;
  • it annuls the previous Act on Wages and directly lays down the principles for employees' remuneration;
  • it provides procedures to help employees have their claims met in the event of their employer's insolvency;
  • it provides for the transfer of rights and obligations arising from the labour-management relationship to the legal successor, in the event of an undertaking being transferred or closed;
  • it increases employees' rights in setting the conditions of their employment and provides greater protection of their personal data;
  • it provides for employee participation by means of works councils and/or shop stewards in those companies where there are no trade unions present;
  • it increases the powers of trade unions in co-decision making and creates better conditions for the activity of employees' representatives by specifying paid time off for trade union officials and works councils to perform their tasks; and
  • introduces a new statutory'parental leave' entitlement, which applies equally to both parents after a child is born.

Commentary

The adoption of the new Labour Code means further harmonisation of the Slovak labour law with the labour law of the European Union, despite the fact that it is still based on the 1965 Labour Code and the 30 or more amendments which were made to the Code during its existence.

Despite the highly progressive nature of the new Labour Code, there were protests before it came into force, mainly from the side of the employers, which demanded amendments. Employers represented by the Federation of Employers' Associations of the Slovak Republic (Asociácia zamestnávatel'ských zväzov a zdruzení Slovenskej republiky,AZZZ SR) argued that the new Labour Code was not liberal enough to allow them to be competitive and flexible in the face of the changing needs of the market economy. They also argued that trade union rights have been extended too far and beyond usual standards. Employers also strongly criticised the provisions in the Code setting a 48-hour weekly limit on working time (including overtime), which applies cumulatively to all employment contracts held by an employee (applying to business and public organisations equally), and the obligatory introduction of works councils in those companies where trade unions are not established.

Although the employers have a critical view of the new works councils, the creation of better preconditions for employee participation in those companies where there are no trade unions present can be considered as fully legitimate. Indeed, it might be pointed out that in order to help works councils work efficiently, their competences should have been made broader - however, trade unions had reservations on this issue.

The employers´ protests culminated in March 2002 - ie more than half a year after parliament approved the Labour Code legislation following a previous mutual agreement by the social partners in the tripartite Council for Social and Economic Concertation (Rada hospodárskej a sociálnej dohody, RHSD). The government decided to establish a special working group to analyse the employers' objections and demands, in order to deal with the new situation effectively. According to the vice-premier, Ivan Miklo, this re-examination concerned'a change in those provisions which decrease flexibility of work in an unacceptable way'. After a short discussion with the social partners, the working group reached commonly accepted compromises concerning necessary amendments to the new Labour Code. The Government submitted proposals for amendments to parliament, which applied a accelerated legislative procedure, and on 20 March 2002 the amendments to the new Labour Code were approved (Act No. 165/2002).

These changes included an extension of the weekly maximum working time (considering all employment contracts together) by 10 hours - ie up to 58 hours. Furthermore, employers should now provide their employees with a 30-minute rest break if the working day (or shift) lasts more than six working hours (under the original version of the new Code, employees were entitled to such a break where the working day was four hours). There was also originally a six-month ban on recruiting new employees to fill jobs previously eliminated due to organisational changes in the company. In order to increase companies' flexibility, this period has been reduced to three months only.

It is understandable that the trade unions are more satisfied with the new Labour Code than the employers, because the new Code has improved employees' protection and the position of unions in relation to employers. During the intensive discussions shortly before the new Labour Code was put into effect, the president of the Trade Union Confederation of the Slovak Republic (Konfederácia odborových zväzov Slovenskej republiky, KOZ SR), Ivan Saktor, stated that if the implementation of the new Labour Code were postponed, the trade unions were considering calling a short-term general strike. However, the situation did not arise and the new Labour Code entered into effect. Nevertheless, employers' representatives have continued to express their discontent with some of its provisions and call for further amendments. (Mariana Munková and Ludovít Czíria, RILSAF Bratislava)

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