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Business calls for more Labour Code changes

BUSINESSES do not hide their enthusiastic opinions about the Labour Code that was in place in Slovakia in 2007 before it underwent some significant changes under the government of Robert Fico. Although the modifications proposed by the government of Iveta Radičová are moving the Labour Code closer to what businesses call a ‘flexible law’, the Business Alliance of Slovakia (PAS) insists that the current draft, which was adopted by the cabinet on April 28, does not go far enough.

Jozef Mihál (Source: Sme)

BUSINESSES do not hide their enthusiastic opinions about the Labour Code that was in place in Slovakia in 2007 before it underwent some significant changes under the government of Robert Fico. Although the modifications proposed by the government of Iveta Radičová are moving the Labour Code closer to what businesses call a ‘flexible law’, the Business Alliance of Slovakia (PAS) insists that the current draft, which was adopted by the cabinet on April 28, does not go far enough.

The German-Slovak Chamber of Commerce (DSIHK) is also calling for additional changes to the Labour Code even though the chamber said the draft revisions include some modifications that its members appreciate. Slovakia’s trade unions are opposed to most of the proposed changes, arguing that they will cause a decline in the economic and social status of employees.

“Despite the fact that as many as 140 provisions of this law are changing, the revision does not have the potential to bring the level of flexibility to the labour law which was there before 2007,” PAS said in a news release.

The alliance called on members of parliament to focus on three key areas during the forthcoming parliamentary debate: costs related to the layoff of employees; the amount of overtime work permitted; and the authority of representatives of employees in managerial decision-making.

Markus Halt, the spokesman for DSIHK, said that the revision to the Labour Code will bring some improvement in the hiring and firing process as well as the introduction of flexible working time accounts.

He added, however, that German investors still want further changes, such as more equal treatment of trade unions and other employee representation institutions, as his organisation believes the current text in the amendment gives trade unions more privileges.

“Especially in smaller and medium-sized companies, the interests of employees are often represented by a works council or other persons of trust,” Halt told The Slovak Spectator. “The wording of the law does not grant these institutions the same authority when agreeing, for instance, on flexible working time.”

Halt also said his organisation would also like to see a cap of 12 monthly salaries on wage compensation ordered by courts.

“The long proceedings at courts often result in unjustifiably large severance pay,” Halt said.

The chamber also proposes that an employment contract should automatically terminate when an employee reaches retirement age, saying this would improve the employment opportunities for young people. The organisation is also suggesting that there be a reduction in the time period for advance announcement of vacation shutdowns to three months so that companies can react more flexibly to their current business situation.

PAS stated in its release that even though the proposed changes in the layoff notice period will moderately reduce the costs of layoffs of long-service employees, employers will still be obliged to pay two-thirds more than they did in 2007, when employees were limited to only three months’ salary when laid off.

PAS wrote that the notice period and the length of paying severance in most OECD countries is shorter than it is in Slovakia, adding that the changes in the revision would move Slovakia towards the level of protection in other OECD countries but it would not match countries such as the United States, New Zealand, Great Britain and Australia, which are characterised by low levels of employee protection during layoffs but have lower levels of unemployment.

“Slovakia has its own positive experience with how a flexible labour code inspires growth in employment and the economy,” PAS wrote.

An employee’s probationary period would remain unchanged at three months under the proposed revision, except that a period of up to six months would be allowed for managerial staff. The draft amendment would also introduce so-called shared posts, making it possible for an employer to divide work usually designated as only one job position between two employees.

The proposal would also give an employer the option of negotiating a combination of severance pay and layoff notice period with an employee and would eliminate the employer’s legal obligation to provide laid off employees with both notice and severance pay.

The draft revision would automatically entitle employees who are aged 33 and older to 25 days of annual holiday leave.

Employees who have worked for a company for at least one year but less than five years would continue to have the existing layoff notice period of at least two months.

Employees who have worked for a company for at least five years but less than 10 years would be entitled to at least a three-month notice period; those with 10 but less than 20 years of service would receive at least a four-month notice period; and those with 20 or more years of employment would have at least a five-month notice period, the SITA newswire reported.


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