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Mikloš vows changes to new Labour Code

THE DEPUTY Prime Minister for the Economy, Ivan Mikloš, has warned that a new Labour Code due to take effect April 1 could seriously limit the competitiveness of the economy if not amended.
Despite approving the legislation last year, Mikloš has said that his party, the centre-right Slovak Democratic and Christian Union (SDKÚ), will propose amendments to the Code to ensure that businesses stay competitive.
"The law contains fundamental shortcomings that would lower the flexibility of the labour market, increase the level of unofficial labour and limit the competitiveness of our economy.

THE DEPUTY Prime Minister for the Economy, Ivan Mikloš, has warned that a new Labour Code due to take effect April 1 could seriously limit the competitiveness of the economy if not amended.

Despite approving the legislation last year, Mikloš has said that his party, the centre-right Slovak Democratic and Christian Union (SDKÚ), will propose amendments to the Code to ensure that businesses stay competitive.

"The law contains fundamental shortcomings that would lower the flexibility of the labour market, increase the level of unofficial labour and limit the competitiveness of our economy.

"We therefore want to remove them before the code becomes effective," he said January 24.

Under the new legislation, which the Labour Ministry claims meets all European Union standards on work, employees will not be able to work more than 48 hours per week, including overtime, with overtime limited to 150 hours per year.

Employees will also only be allowed to work one day per weekend, and work on a 'dohoda' or part-time work agreement will be forbidden. Spouses are also forbidden to employ each other.

Mikloš attacked the new legislation as essentially putting an end to part-time employment, which he and many labour experts see as key to helping lower an almost 20 per cent unemployment rate.

As much as 17 per cent of the workforce in the EU consists of part-time employees. In Slovakia that figure is only two per cent, according to the Deputy PM.

Part-time labour is seen as a more efficient and flexible employment option for many companies, as it allows them to easily and quickly take on or lay off staff.

Labour experts have condemned the Labour Code in its current form as contributing nothing to increasing job market flexibility or helping bring down jobless levels.

"It's pitiful that a law like this has been passed, especially when Slovakia is fighting very high unemployment. The hiring and firing of labour should be made as easy and cheap as possible for employers.

"Part-time employment is very important for employers and the labour market, and in some professions it is the optimum form of employment," said Ján Tóth, an analyst at ING Bank.

"It would be a disgrace if the law is not changed," he added.

The legislation has also been criticised by trade unions, particularly health care sector unions.

Many doctors have attacked the limits on overtime, arguing that hospitals could not function if their employees had to stick within those limits.

The Labour Ministry has said that any doctor working longer hours than those prescribed in the new Code were putting patients at risk.

But Katarína Sedláková of the Bratislava University Hospital told the daily Sme: "We've already tried to find a solution to the overtime problem, but we couldn't do it without putting patients in danger."

Transport service managers have also warned the new legislation would put pressure on their services.

"With this overtime rule I don't know how we can guarantee the same services as last year. We will need more drivers, but they have to have two years' experience, and you just can't find such people on the labour market," said Martin Jerguš of the Slovak City Transport Association.

The cancellation of the 'dohoda' part-time contract is also expected to affect many companies.

In the US, where unemployment has been traditionally low, a number of firms employ workers under part-time contracts.

Under the new Code such contracts at Slovak companies would be cancelled, limiting labour force flexibility (the ability of the market to respond to changes in demand for labour) and contributing to higher unemployment, argue labour experts.

Despite the objections, the Labour Ministry still backs the Code, which its own experts prepared. Labour Minister Peter Magvaši of the former communist Democratic Left Party (SDĽ) said the criticism of the law was unfounded, arguing the lack of reform initiated by other coalition parties was the root of any problems with the legislation.

"The reforms of many of our partners, for example in health care and culture, have been delayed. Therefore it's natural that that these reforms may seem too socialist for some people ," he said.

His ministry has also claimed that many of the supposed changes have already been in effect for some time, such as the law on employing spouses.

However, some analysts have said the unique demands of the Slovak economy mean that not all EU norms on employment need be adopted, and pointed to cases where EU states have implemented separate labour legislation to combat high unemployment.

"It's as if they have just chosen all the worst parts of EU work laws. We don't have to apply every condition that the EU wants, and that should be remembered at a time when we have such high unemployment," said Tóth.

Mikloš and other business leaders who approved the Code in its present form last year said they had been mistaken in approving the legislation as it is.

Some employer groups have called for a tripartite meeting - involving the government, employers and trade unions - to discuss the Labour Code.

"We also want to amend the law," said František Bruckmayer of the Association of Employers' Unions.

"The unions wanted more, neither the government nor us were happy, but in the end there was consensus. If there is any guilt, then all three sides share it," he said.

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