Social partners agree on amendments to labour relations law

After one year of tripartite negotiations, a consensus was reached on draft amendments to the Law on labour relations. The amendments represent a compromise between the rather radical demands of employers to reduce workers’ rights and the trade union demands to defend them. Overall, the amended law introduces greater flexibility into the labour market.

The 2002 Law on labour relations (LLR) (SI0206101N) regulating individual employment relationships is one of the most important elements of the new labour legislation in Slovenia and is often called the ‘workers’ constitution’.

However, the government and employers believe that Slovenia needs a more flexible labour market; consequently, the Ministry of Labour, Family and Social Affairs (Ministrstvo za delo, družino in socialne zadeve, MDDSZ) prepared draft amendments to the LLR. After one year of tripartite negotiations, the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS) (SI0207103F) approved the draft amendments. On 29 June 2007, the government and the social partners also concluded an agreement on the amendments to the LLR in order to confirm the consensus. The amendments represent a compromise between the rather radical demands of employers to reduce workers’ rights and the trade union demands to defend them.

Key changes to LLR

Prohibition of discrimination and of retaliatory measures

Article 6 (SI0407102F) now also covers the prohibition of retaliatory measures in addition to the prohibition of discrimination. This change is due to the requirements of Council Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation and Directive 2000/43/EC implementing the principle of equal treatment between persons irrespective of racial or ethnic origin.

Prohibition of harassment and psychological violence

A new Article 6a completes the prohibition of harassment, which is already partly regulated in Article 45 of the LLR (SI0407102F). However, pursuant to the abovementioned directives and the European Social Charter, it was also necessary to cover other forms of harassment besides sexual harassment, and psychological violence and torture.

Employment on basis of type of work

Changes in Article 29, which determines the content of the employment contract, introduce a wider definition of work which the worker is obliged to perform. A contract of employment has to contain a job title or type of work. In this way, the possibility to employ workers for a particular type of work is more clearly set out, which enables greater flexibility or movement of workers from one job to another within a company.

Atypical flexible forms of employment

The amendment allows for four additional instances where a fixed-term employment contract may be concluded, namely when:

  • no applicant for a job or type of work fulfils the requirements, the employer can conclude a fixed-term contract for a period of up to one year with one of the applicants;
  • replacing an absent worker;
  • employing a certain category of managerial staff;
  • hiring someone to work on a specific project, a fixed-term contract can be concluded for more than two years.

A definition of telework as a special category of homework is also included.

Termination of employment contract

The changes introduce unambiguous and more effective regulation of the difficult and unclear procedures which an employer must follow when terminating an employment contract. Another new feature is that an employer can terminate an employment contract when a worker is absent from work for five consecutive days and does not inform the employer about the reasons for the absence even though he or she is obliged and is able to do so.

Minimum periods of notice

The minimum periods of notice are now standardised in both cases when the employment contract is terminated by the employer due to business reasons or due to reasons of incapacity. Up to now, if the employer terminated the employment contract due to business reasons, the minimum period of notice was 150 days if the worker’s length of service was at least 25 years and 75 days if the worker’s length of service was at least 15 years. Now these periods of notice are 120 days and 60 days, respectively; the same applies when notice is given for reasons of incapacity.

Severance pay

The only change regarding the amount of severance pay is when the employer terminates the employment contract and, during the period of notice, the employer or the employment service offers the worker a new employment contract with another employer. If the worker accepts the new employment contract, the previous employer is not obliged to pay the worker the severance pay. This rule only applies if the new employer agrees in the new contract to take into account the worker’s years of service under the previous employer when determining the minimum period of notice and severance pay.

Pay

The right to pay compensation for a period of absence from work is more precisely regulated.

Another new feature is a provision stating that the worker is entitled to a share in profits in accordance with a special law.

A worker serving a traineeship, or undergoing further training or preparation for a certain job or type of work, is entitled to a minimum base wage amounting to 70% of the base wage for this job or type of work. This minimum base wage may not be lower than the minimum wage laid down by law.

Overtime work

The maximum number of overtime hours a year has been reduced from 180 to 170 hours. With the consent of the worker, overtime work can extend beyond 170 hours a year but may not exceed 230 hours. Council Directive 2003/88/EC concerning certain aspects of the organisation of working time allows the worker and employer to agree in writing on additional overtime work.

Balance between work and family life

A new provision stipulates that, when a worker proposes to the employer a change in the distribution of his or her working time in order to improve the balance between work and family life, the employer must explain his or her decision in writing, taking into account the needs of the working process.

Parents of school-age children have the right to take at least one week of their annual leave during school holidays. However, the employer may refuse to grant this use of annual leave if the worker’s absence would seriously disrupt the working process.

The employer may not terminate a female worker’s employment contract during the period of pregnancy and throughout the time that she is breastfeeding. Moreover, the employer may not terminate the employment contract of workers while they are on full-time parental leave and up to one month after the parental leave. This latter protection has been put in place because often an employer dismissed a parent – most often the mother – immediately following the return to work.

Opinions of government and social partners

Employers

The Chamber of Commerce and Industry of Slovenia (Gospodarska Zbornica Slovenije, GZS) is not satisfied with the negotiations – it expected more although it achieved the maximum possible considering the existing circumstances.

At the initiative of the Chamber of Crafts of Slovenia (Obrtna Zbornica Slovenije, OZS), the agreement on the amendments to the LLR includes a provision stating that the social partners and the government will closely monitor implementation of the amendments. OZS required that, one year after the amendments come into force, an analysis should be prepared and, on its basis, further improvements of the LLR should be proposed, particularly in relation to greater flexibility of labour.

Trade unions

The President of the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS), Dušan Semolič, announced that ZSSS was satisfied with the compromise solution because the union had succeeded in defending several worker rights which had been under threat. At the beginning of the negotiations, among other demands, the employers had made the following proposals: to abolish the paid 30-minute rest period to which a full-time worker is entitled during daily work; to increase working time; to abolish or reduce severance pay; and to reduce the influence of trade unions in companies.

Out of seven representative trade union confederations, only the KNSS – Independence, Confederation of New Trade Unions of Slovenia (KNSS – Neodvisnost, Konfederacija novih sindikatov Slovenije, KNSS) did not sign the agreement. KNSS believes that the amendments to the LLR do not include any improvements for workers.

Government

The government often notes that the LLR amendments were drafted according to the concept of flexicurity, and thus establish greater flexibility while preserving social security. Flexicurity is a topical issue across the EU, as reflected in the debate arising over the European Commission’s recent Green Paper on Modernising labour law to meet the challenges of the 21st century (EU0701019I), and also in the Commission’s Employment in Europe 2006 report (EU0701059I).

Commentary

Negotiations on the amendments to the LLR began in 2006 when Janez Drobnič was Minister of Labour, Family and Social Affairs. He favoured the employers and accepted many of their proposals regarding the amendments.

On 21 November 2006, Prime Minister Janez Janša had a meeting with all of the representative trade union confederations (see Industrial relations developments 2006), which complained about a worsening of the social dialogue in Slovenia. Soon after the meeting, Mr Janša submitted to the parliament a proposal for the dismissal of Mr Drobnič. Subsequently, the parliament nominated Marjeta Cotman as the new minister; further to this appointment, the social partners have received more equal treatment. This partly explains why the employers are not satisfied with the negotiations.

All of the social partners referred to the flexicurity concept during the negotiations, but it was unclear how it would be implemented (see the Slovenian contribution to the European Working Conditions Observatory comparative study on Quality in work and employment in Europe). In fact, the LLR amendments mostly introduce greater flexibility into the labour market.

The ESSS determines which draft laws should be approved by consent of the social partners and the government, and then sent to the parliamentary procedure. As a high degree of consensus was reached on the draft amendments to the LLR, it is unlikely that the proposals will be changed during the parliamentary procedure.

Štefan Skledar, Institute of Macroeconomic Analysis and Development

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