Government amends Labour Code

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The Government of Slovakia says it will increase protection for employees as part of its amendments to the Labour Code. Unions were happy with the changes proposed by the Ministry of Labour, Social Affairs and Family, which were approved by the government after discussions with social partners. Employers, however, have criticised the planned changes, which they say will lead to job cuts. The final version has still to be ratified by the Slovakian parliament.

Background on Labour Code amendments

Since 2002, a typical scenario in Slovakia has seen the winning party or coalition in an election criticising amendments to the Labour Code implemented by the previous government. In some cases, the incoming government has simply cancelled the amendments.

Employers try to encourage new governments to bring in amendments to the Labour Code which will increase flexibility in employment relations and collective bargaining.

The unions’ however tend to criticise those demands and call for greater protection for workers.

In this respect, the changes were implemented by the right-wing liberal-oriented governments, led by Mikuláš Dzurinda Dzurinda and Iveta Radičová (SDKU-DS), and by social-democratic governments, led by Robert Fico (SMER-SD).

Redundancy pay is a typical example of a Labour Code issue disputed by employers and unions. Between 2003 and 2007, workers were not allowed to receive severance pay and work during their notice period.

Amendments to the Labour Code in 2007 reversed that ruling (SK0709029I). In 2011, a further amendment (SK1109019I) once more made it impossible for employees who had accepted redundancy compensation to work during their notice period.

Employers raise concerns over increasing costs

During the 2012 elections, SMER-SD criticised the amendments made to the Labour Code by the previous government and promised to revise them. SMER-SD leader Robert Fico repeated this promise when he was elected in April.

At the beginning of July 2012, the Slovakian Ministry of Labour, Social Affairs and Family (MPSVR SR) prepared proposals for more than 90 changes to the Labour Code that had been negotiated with social partners. Among them were:

  • the re-introduction of the option to take severance pay and to work during the notice period;
  • the cancellation of external forms of employment by agreement (that is, work performed outside the employment relationship);
  • the shortening of the maximum period for fixed-term contracts;
  • new rules decreasing the number of overtime hours an employer could request;
  • a rule that notice periods could no longer be extended by agreement;
  • the increase of night work by one hour;
  • the strengthening of the role of trade unions.

Compromise reached in some areas

Employers criticised the proposed amendments, which they said would lead to job cuts and an increase in the unemployment rate.

Employers were particularly worried about the changes allowing workers to receive redundancy pay and work during the notice period. They were concerned this would make it more expensive to dismiss workers.

Business leaders felt employers would be less likely to hire workers on open-ended contracts, and some employers rushed to announce redundancies before the amendments were due to come into effect.

During tripartite consultations, MPSVR SR worked to take into account the employers’ comments as well as those of the trade unions. In most cases, the social partners agreed on a compromise. Under the new proposals, the size of redundancy payments would be determined by the length of time a worker had been in the job. Employees who had not been with an employer for at least two years would not be entitled to any money at all. There were also agreements on changes to the flexible working hours system.

Union demands to abolish external forms of employment by agreement and to decrease the existing 150-hour annual limit on overtime were not agreed.

Despite these compromises, the employers were not satisfied. According to Luboš Sirota, Vice-President of the National Union of Employers (RÚZ SR), the Labour Code amendments were ill-timed and one-sided. He said that although the unions had not achieved everything they demanded, they seemed to be satisfied with the proposed changes, and had strengthened their position at the expense of the employers.

Minister says changes are fair

According to Ján Richter, Minister of Labour, Social Affairs and Family, the Labour Code amendments ensured equality between employees and employers. He said where social partners had not agreed, the proposal of the MPSVR SR was adopted.

The amendments include the following changes:

  • trade unions no longer need to prove their representativeness;
  • less favourable working conditions than those stipulated in the Labour Code cannot be enforced through collective agreements;
  • employers must give employee representatives paid leave of at least 15 minutes each month per employee they represent.

Employers’ demands to postpone the implementation of amendments until 2014 were not accepted. The changes should come into effect on 1 January 2013.

Commentary

The draft was approved by the government on 22 August 2012 and the parliament began discussions on the amendments in September 2012. Opposition parties have said they will strongly oppose the proposed changes. However, they do not have sufficient voting strength in parliament to veto the plans.

Ludovít Czíria, Institute for Labour and Family Research

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