Parliament adopts controversial new amendments to Labour Code

Following trade union demands, the Slovakian government proposed to implement over 150 changes to the Labour Code, mainly aimed at increasing employee protection. Many changes concern employment contracts, working time and employee representatives. Employers opposed the changes, fearing lower employment flexibility, higher labour costs and less job creation. After much debate, the parliament adopted the amendments, to take effect from September 2007.

Lengthy and controversial discussions

The trade unions in Slovakia had been demanding changes to the Labour Code for a long time and they anticipated that the new government would accept their requirements. Since the new government took office in 2006, the Labour Code was the most discussed piece of legislation; the adoption of changes to the Code was one of the key political tasks of the new coalition government (SK0609019I). The extensive amendments, including more than 150 items, proposed by the Ministry of Labour, Social Affairs and Family (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR) aim to increase employee protection.

However, the draft changes were strongly criticised by the employers, who refused to accept them (SK0702059I). The employers – supported by the opposition parties in the parliament – argued that the proposed amendments would reduce employment flexibility, increase labour costs, discourage employers from investing in Slovakia and raise the unemployment rate. On the other hand, representatives of the trade unions and the ruling coalition party Smer-Sociálna demokracia (Smer-SD) defended such changes in order to strengthen the existing low level of employee protection at work, caused by the previous changes to the Labour Code adopted in 2003 (SK0312103F).

The proposed amendments were also discussed in the tripartite Economic and Social Council (Hospodárska a sociálna rada Slovenskej republiky, HSR SR). Despite lengthy discussions on the reform, as well as partial concessions on the side of the trade unions and the government, the employers rejected the proposed changes. At the same time, some foreign institutions, such as the British Chamber of Commerce in Slovakia, and companies, for example the car manufacturer PSA Peugeot-Citroën, followed closely the proposed changes to the Labour Code. The labour law reform was also publicly discussed in the media.

Introducing amendments to the Labour Code became a political priority of Smer-SD and, at the beginning of 2007, the Prime Minister, Róbert Fico, regarded the adoption of such changes as ‘the act of the year’. The debate on the Labour Code amendments was one of the longest-lasting legislative discussions in Slovakia. The government submitted the final version of the proposed changes to the parliament, which subsequently adopted the amended Labour Code with some modifications on 25 June 2007. The new Labour Code was due to enter into effect on 1 September 2007.

Most important changes

The adopted changes to the Labour Code are rather extensive. However, the most important amendments relate to employment contracts, working time and employee representatives.

Employment contracts

  • The term of dependent employment has been more precisely defined. This change aims to prevent the situation whereby ‘economically dependent work’ is performed by previous employees who are now working for the employer as self-employed individuals or sole traders (SK0610019I).
  • It is again possible to sign an ‘Agreement on working activity’ with the employer for occasional jobs of up to a maximum of 10 hours a week.
  • The range of work performed by an employee according to the ‘Agreement on performance of the task’ has been extended from 300 hours to 350 hours a year.
  • The renewal of fixed-term employment contracts is limited: this can be done only once every three years. However, exceptions are allowed, for example regarding seasonal work and research activities. The probation period for new workers cannot be applied when the contract is extended.
  • If an employee is entitled to a redundancy payment, he or she is also entitled to receive a wage during the redundancy notice period. Previously, an employee was entitled to receive either redundancy pay or wages during this period.
  • Employees will be able to perform telework at places agreed with the employer in the employment contract. Previously, workers were only permitted to perform ‘work at home’.

Working time

  • The standard working time cannot exceed 48 hours a week, including overtime work. However, an exception arises for healthcare workers – who may work 56 hours a week, calculated over a four-week average and including overtime work.
  • ‘Stand-by’ time spent at the workplace has been included in the working time of employees. Employees concerned should receive a wage of at least the minimum hourly rate; from 1 October 2007, this amount will be SKK 46.60 (about €1.37 as at 25 September 2007) an hour.
  • When the working time of part-time workers is shorter than 15 hours a week, rather than the 20 hours specified up to now, the employment contract can be terminated for any reason or even without cause. The period of dismissal notice has been extended from 15 to 30 days.
  • Overtime work is no longer legal for workers performing hazardous tasks. In some exceptional cases, overtime work based on an agreement between the employer and the employee must be approved by the employee representatives.
  • The minimum continuous rest period granted to an employee must be 12 hours. The employer can shorten this time only in cases specified by legislation. If the latter is the case, the employer is obliged to ensure that the employee concerned will enjoy 12 hours of continuous rest within 30 days.

Tasks of employee representatives

The trade unions also demanded more rights for their operations at employers’ premises. However, only some of their requirements were accepted. Nevertheless, based on the trade unions’ requests, the rights of all employee representatives, including works councils, have been augmented in relation to certain aspects, as outlined below.

  • The proposal to provide full-time pay for employee representatives during their operations at an employer’s premises with more than 250 employees was not accepted. Notwithstanding this limitation, according to the amended Labour Code the employer can provide paid time off for the work carried out by employee representatives based on an agreement with the local trade union and/or the works council. If an agreement with the employer is not reached, the trade union leaders and works council members have the right to paid time off in accordance with the monthly ceilings defined by the law. The rates depend on the number of trade union officials working at the employer’s premises.
  • The trade union representatives did not obtain the right to stop the performance of work which can seriously jeopardise employees’ health. However, they were granted the right to ask the employer to do so.
  • The employer can set performance standards only after agreement is reached with employee representatives on the issue. If an agreement is not concluded between both parties, the National Labour Inspectorate (Národný inšpektorát práce, NIP) will decide on the outcome of the dispute.

Commentary

Although the majority of changes proposed by MPSVR were approved, some proposals which the employers criticised were not accepted or were adopted in milder versions by the parliament. Employees are, in some cases, better protected at work and also have more rights with regard to increasing their performance-related qualifications. The trade union representatives were often criticised for demanding too many rights for themselves. However, the amended Labour Code increased the rights of all employee representatives, not only of trade union officials.

The Labour Code amendments also provide certain advantages for employers. In this respect, trade unions should inform the employer about the start of their operations and are requested to submit to the employers a list of local trade union officials. Moreover, if an employee leaves before the end of the notice period, the employer usually has the right not to pay the employee one monthly wage. If the employer intends to apply a flexible working time arrangement, it is not sufficient merely to consult with the employee representatives – an agreement must be reached between both sides. This change can, however, be questioned, since flexible working time arrangements are usually applied in favour of employees.

Ludovít Cziria, Institute for Labour and Family Research

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