Fundamental changes made to Labour Code

In July 2003, significant and extensive amendments were made to the Slovak Labour Code, little more than a year after it came into force. The changes, which resulted from employers' complaints about some of the Code's provisions, aim to to achieve a higher level of flexibility in employment relations by reducing the number of regulations and creating better conditions for autonomous collective bargaining. The areas affected include works council and trade union rights, termination of employment, overtime, paid leave, working time and fixed-term contracts.

In April 2002, a new Labour Code came into force in the Slovak Republic (SK0207102F). The new Code laid 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 was to meet the requirements of the market economy and balance the interests of employers and employees, while harmonising Slovakian labour legislation with EU law. However, employers' organisations soon started demanding changes to the Code. They were dissatisfied with some of the employment conditions laid down in the Code, and also felt that excessive rights had been given to employees represented by trade unions at enterprise level. A number of the employers' proposals were taken up by the government (SK0303101N). Thus, on 1 July 2003 the Labour Code was amended again, making important and extensive changes.

The main purpose of the new Labour Code amendments is to achieve a higher level of flexibility in labour relations by reducing the number of regulations and creating better conditions for autonomous collective bargaining. The amendment also takes into consideration the requirements laid down in the relevant EU Directives, comments from theInternational Labour Organisation on the previous Labour Code, and suggestions and issues arising from its implementation. The amendment will bring about significant deregulation as regards working and employment conditions, leaving their concrete definition to the social partners. The amended Labour Code stipulates only the basic framework, with actual working and employment conditions to be adjusted at enterprise level, taking into account regional and sectoral circumstances and the employer's situation. The new amendments also eliminate the administrative intervention in labour relations of a number of institutions, so simplifying Labour Code implementation.

Fundamental changes have been made mainly in the following areas: works councils; employment termination; overtime; trade union competences; paid leave; working time arrangements; fixed-term employment contracts; and equalisation of the status of employees and employers in the case of employment rights violations and conflicts of interest within collective bargaining. The main changes are outlined below.

Fundamental principles and general provisions

  • The rights of employers and employees are specified. The latter have the right to collective bargaining and, in case of conflict, employees have the right to strike and employers to impose a lock-out. Trade unions participate in collective bargaining, while works councils or'works trustees' (elected employee representatives in firms too small to have a works council) are involved only in other labour relations issues. The employer is obliged to permit the establishment of trade unions, works councils or works trustees at the workplace - seeSK0308102F for further details.
  • The Labour Code also covers employees of church or other religious establishments and citizens of current EU Member States working for foreign companies in the Slovak Republic.
  • Employees' representatives are designated as being trade unions, works councils, works trustees and employees' representatives responsible for occupational safety and health at work. In a cooperative, the employees' representative is a special cooperative body elected by the members' meeting.
  • The part of the Labour Code which deals with discrimination has been supplemented by a prohibition on employers' investigating employees' sexual orientation. The meaning of direct and indirect discrimination has also been clarified; the definition of direct discrimination, in compliance with the relevant EU Directive, lays down a general framework for equal treatment at workplaces and in occupation. Harassment at work is also defined as a form of discrimination. An employee can also take a case of discrimination to court.

Employment relationship

  • In order to increase employment flexibility, the Labour Code permits fixed-term employment contracts up to a maximum of three years. In special cases, these can be prolonged or renewed. The permissible grounds on which fixed-term employment contracts may be prolonged or renewed for a maximum of three years have now been broadened. Furthermore, the possibilities for prolongation or renewal of fixed-term employment without giving a reason have also been increased, because their earlier restriction was seen as causing problems. At the same time, the employer is obliged to inform employees on fixed-term employment contracts, along with employees' representatives, about open-ended job vacancies.
  • The period of notice of termination of employment has been unified: it is now identical for both employer and employee (at least two months). The minimum notice period for someone who has been employed for at least five years is three months.
  • The grounds on which the employer may give notice have been specified, the main emphasis being failure to fulfil work tasks and duties, including work discipline and quality.
  • Employees on maternity leave or parental leave, and single employees caring for children below three years of age, may not be given notice of termination of employment.
  • Employers can terminate a fixed-term employment contract with immediate effect without giving a reason.
  • People who have been employed for at least five years must receive higher (by one average monthly wage) severance pay.

Working time and rest periods

  • The amendments provide for greater flexibility of working time distribution within the current framework of employee protection in this area, in compliance with EU Directives.
  • After negotiation with employees' representatives, the employer can distribute weekly working time unevenly during a reference period not exceeding four months. In agreement with employees' representatives, the employer can distribute weekly working time unevenly over a reference period longer than four months but not exceeding 12 months.
  • For employees with a disability, pregnant women, women or men permanently caring for children below three years of age, and single employees caring for children below 15 years of age, the employer can distribute working time unevenly only upon agreement with the employee in question.
  • Provisions concerning shiftwork and employees working shifts have been supplemented in accordance with the relevant EU Directives.
  • The revised Labour Code stipulates the circumstances in which an employee's continuous daily rest period can be shortened to eight hours, according to need.
  • Legal provisions on overtime have been made more flexible, with the aim of more closely meeting practical needs. Accordingly, overtime cannot exceed an average of eight hours weekly over a maximum period of four consecutive months, unless the employer has agreed a longer period with the employees' representatives (a maximum of 12 consecutive months). The employer shall determine the scope and conditions of overtime in agreement with employees´ representatives. In special circumstances, the employer can agree additional overtime with employees, though not exceeding 250 hours per year.

Wages and average earnings

  • The possibility of favourably adjusting wage conditions has been extended to employers at which such conditions are not established in a collective agreement.
  • Employer and employee can agree that the basis wage level shall include overtime work, although this shall not exceed 150 hours per year.
  • Where average earnings are used for calculation purposes, this must be done on a quarterly basis with a view to preventing improper use of this indicator.

Grounds for claiming time off

  • In contrast to the previous legal provisions, the amended Labour Code stipulates in case of the performance by an employee of public functions, civil duties and other activities of general interest that, if such activities cannot be performed outside working time, the employer shall provide the employee with unpaid leave. Paid time off can be granted if the Labour Code or a collective agreement so stipulates, or on agreement between employer and employee.
  • The scope and conditions of long-term leave for the performance of trade union activities are to be laid down in the relevant collective agreement; similarly, works councils must reach agreement with the employer concerning the activities of their members.
  • The law contains clear provisions on activities considered to be a civil duty for which the employer is obliged to grant employees paid leave. Employers are obliged to provide employees with paid leave only in case of mandatory participation in remedial treatment, obligatory medical examinations, donation of blood, bone marrow, and so on, and training of employees' representatives. The law also clarifies the situation regarding time off within the framework of further vocational training.
  • The employer shall grant employees paid leave for medical examinations up to a maximum of seven days per year, on condition that these examinations cannot be performed outside working time. This provision is intended to prevent employees' abuse of time off work. If an employee requires further leave for medical examinations, the employer is obliged to provide it, but unpaid. Female employees shall be granted paid leave for medical examinations related to pregnancy. The Labour Code amendments also deal with time off to attend a wedding: whereas previously employees could claim time off in order to attend the weddings of children or parents, they are now restricted to (unpaid) time off for their own wedding.
  • A new provision has been added on temporary suspension from work. If an employee is, on good grounds, suspected of a substantial breach of labour discipline and his or her continued working could significantly harm the employer's interests, the latter can, on agreement with employees' representatives, suspend the employee for a maximum of one month. During this period, the employee is entitled to receive wages based on average earnings.

Enterprise social policy

  • The categories of employees whose employment can be terminated only under exceptional circumstances have been expanded. This mainly concerns women on maternity leave, women or men on parental leave, and single women or men caring for children below three years of age.
  • Pregnant women, women or men permanently caring for children below three years of age, and single women or men permanently caring for children below 15 years of age can, in contrast to the previous legal provisions, now be asked to do overtime only with their prior agreement. An employer can order such workers to go on stand-by only with their prior agreement.
  • The new amendments to the Labour Code reduce the period of parental leave (from birth) in the case of children with long-term serious disabilities requiring special care from seven years to six.

Collective labour relations

Relations between company management and employees' representatives have also been affected by the new Labour Code amendments. The changes weaken the trade unions' position in the company in favour of other employees´ representatives (essentially works councils). SeeSK0308102F for further details.

Commentary

Parliamentary discussions on the Labour Code amendments at the end of May 2003 proceeded without difficulty: only 12 MPs voted against the proposed changes. The Minister of Labour, Social Affairs and the Family of the Slovak Republic, Ludovít Kaník, was satisfied with the result. After the vote had taken place, he portrayed the amendment in glowing terms:'The parliament has taken an historic step in the liberalisation of labour law.' The president of the Confederation of Trade Unions of the Slovak Republic (Konfederácia odborových zvazov Slovenskej republiky,KOZ SR), Ivan Saktor, was more reticent. He commented that'it's possible to live with such a law', but immediately stated that he intended to ask the President of the Republic not to sign it. However, President Rudolf Schuster did sign the amendment, which entered into effect on 1 July 2003.

From the employers' point of view, the changes in the Labour Code satisfied the requirements of many companies regarding extension of overtime and simplified the hiring and firing of employees. Foreign investors' interests were also taken into consideration in preparation of the changes: it is expected that the simplification of the hiring and dismissal of employees will make investors more willing to move into Slovakia. The management of theUS Steel company in Kosice is satisfied with the changes, which will increase labour flexibility. The amendments related to fixed-term employment and employment with reduced working time are also considered improvements by employers, which have praised increased overtime and new conditions for immediate dismissal in case of a substantial breach of labour discipline. Ján Baca, a spokesperson for US Steel, stated that the'changes strengthen the employment agreement and, in a wider sense, create preconditions for autonomous collective bargaining'.

In contrast, the trade unions have identified a number of problems in the amended Labour Code:

  • the Code provides that employers cannot require information on an employee's pregnancy status, even in the case of work prohibited to pregnant women, and the unions fear that this reduces the protection of pregnant women. At the same time, the Labour Code does allow women voluntarily to inform the employer in writing of their pregnancy, in which case they are legally protected from work which might be harmful to their health;
  • the revised Labour Code allows the prolongation or renewal of a fixed-term employment contract for a period of three years or longer. Unions claim that some employers prefer, in some jobs, to employ retired people on this basis because they are willing to work for a lower wage;
  • the amendments provide for an employment contract with reduced working time (20 hours weekly). The employer or employee are entitled to terminate this employment relationship without giving a reason. This amendment was opposed by unions and not received positively even by the employers because it entitles such employees to paid holidays, which would not have been available within the previous legal framework.

On the plus side, the trade unions welcomed the extension of the period of notice of termination by one month for those who have worked for an employer for five years or more.

An overall assessment of the amended Labour Code will be possible only after it has been in operation for some time. (Mariana Munková, Bratislava Centre for Work and Family Studies)

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