Employers reject proposed changes to Labour Code

Employer organisations are refusing to accept some of the more than 100 changes to the Labour Code, which have been proposed by the government. The changes concerning working time, employment contracts, dismissals and redundancy payments are among the most controversial issues. Employer organisations argue that the changes will decrease labour market flexibility, as well as jeopardising employment in the country. The trade unions, on the other hand, appear to be satisfied with the proposed changes, as they will benefit employees and are in line with the unions’ demands. The trade unions insist that their demands are well founded and that the aim of the unions is not to threaten the employers.

Proposed changes

The government recently submitted its proposed draft Labour Code changes to the social partners. On 25 January 2007, the Prime Minister, Robert Fico, discussed the proposed changes with trade union representatives, who in turn expressed their satisfaction with the amendments. Although the draft changes also reflect the demands of the employers, the latter do not agree with most of the proposed changes. Representatives of the National Union of Employers (Republiková únia zamestnávatelov Slovenskej republiky, RÚZ SR), the Federation of Employer Associations of Slovakia (Asociácia zamestnávatelských zväzov a združení Slovenskej republiky, AZZZ SR), the Business Alliance of Slovakia (Podnikatelská aliancia Slovenska, PAS) and the Slovak Association of Small Enterprises (Slovenská asociácia malých podnikov, SAMP) are refusing to accept the changes. In their opinion, the proposed amendments to the Labour Code will impair the competitiveness of employers and lower employment levels in Slovakia. The draft amendment encompasses more than 100 contentual changes to the current Labour Code. The employers have been particularly critical of changes proposed in relation to working time, employment contracts and dismissals.

Working time

The government proposes that the maximum weekly working time of 48 hours, including overtime, should apply to all employment contracts. The current Labour Code does not declare that the maximum weekly working time concerns all engagements of an employee. The government is also proposing to decrease, by 100 hours, the annual limit for overtime work that an employer can voluntarily agree to with an employee. The employers contend that these reductions could cause problems in some occupations, for example in the provision of emergency services in the area of healthcare.

Employment contracts

Among the other changes proposed is the restriction on the repetitive use of open-ended employment contracts for a maximum period of three years. The current forms of open-ended contracts – to which there are exceptions to the three-year limit – enable employers to regulate in a more flexible way employment levels in their companies in accordance with actual labour market demands. According to Rastislav Machunek of the AZZZ SR, in a statement published in the Pravda newspaper on 26 January 2007: ‘the reason for using this possibility in practice is that we often do not know if the business for which we have employed the employee will last one month, two, three or four months. The change means that there will be a decrease in several thousands of jobs.’ However, trade union representatives argue that employers often use open-ended employment contracts in order to avoid problems relating to the dismissal of employees.

The proposed changes will also prevent employers from forcing their employees to work as ‘economically dependent workers’. Employers, on the other hand, have welcomed the proposal to re-introduce the previously abolished ‘contract on working activities’.

Dismissals

The draft proposals stipulate that employees who leave their job during the notice period should also be entitled to receive redundancy payment. At present, the dismissed employee has to decide whether to take redundancy payment or to work out the notice period and receive a wage. The PAS representative, Róbert Kicina, outlined in Pravda in January 2007 that ‘the more complicated the dismissal of employees is, the more careful the employers will be in hiring new employees.’ Owners of small enterprises are particularly unhappy about the fact that an employee could also give immediate notice when the employer is not paying them, for example, sickness pay in the required time. On the other hand, an employee who unilaterally terminates the employment contract during the notice period would be obliged to pay a penalty to the employer.

Commentary

Employer organisations did not take a united stance in their previous negotiations with the government on a new model of tripartism (SK0701019I). However, the changes proposed in relation to the Labour Code have since mobilised and unified the employers. According to the President of the Slovakian Confederation of Trade Unions (Konfederácia odborových zväzov Slovenskej republiky, KOZ SR), Miroslav Gazdík, the aim of the trade unions is not to threaten the employers but to have a balanced and modern Labour Code. However, according to the RÚZ SR representative, Juraj Borgula, in a statement to Pravda on 20 January 2007: ‘the amendment clearly hampers the creation of new jobs.’

The proposed Labour Code changes also increase the competency of the trade unions in occupational safety and health issues, enabling them to request, in a legitimate case, the provisional closure of a workplace. It is nonetheless paradoxical that some of the proposed changes do not in fact protect employees against the employers, but impede their work possibilities even if they have an opportunity and are able to work. Moreover, some of the proposals are actually favourable to the employers.

Ludovít Cziria, Institute for Labour and Family Research

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