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Cabinet nods through new Labour Code

ALTHOUGH the blueprint of the revision of the Labour Code, which had earlier struck a raw nerve with foreign chambers of commerce among others, has gone through some changes, the draft legislation that received the blessing of the cabinet on August 22 still has its critics. Yet one of the pet projects of the government of Robert Fico will most likely sail effortlessly through parliament thanks to the robust majority of his ruling Smer party, which claims that the changes to the labour legislation will bring more certainties for employees. Representatives of employers, however, called the proposed changes “bad news for Slovakia, investors and the labour market as such”.

ALTHOUGH the blueprint of the revision of the Labour Code, which had earlier struck a raw nerve with foreign chambers of commerce among others, has gone through some changes, the draft legislation that received the blessing of the cabinet on August 22 still has its critics. Yet one of the pet projects of the government of Robert Fico will most likely sail effortlessly through parliament thanks to the robust majority of his ruling Smer party, which claims that the changes to the labour legislation will bring more certainties for employees. Representatives of employers, however, called the proposed changes “bad news for Slovakia, investors and the labour market as such”.

Entitlement to a layoff notice period as well as severance pay, reduced overtime, making layoffs more expensive for employers, shorter temporary work contracts and more power for trade unions have been the most intensively discussed items on the blueprint submitted by the Labour Ministry under Ján Richter.

“Employees who have worked for their current employer for at least two years in a row should be eligible for this [severance] payment,” Labour Ministry State Secretary Branislav Ondruš said as he announced one of the changes pertaining to layoffs approved by the cabinet, adding that the maximum notice period should reach four months if an employee has worked for their current employer for more than 20 years, the TASR newswire reported.

The laid off employee will be eligible for the severance payment not only if their employment ends based on an agreement but also if they are asked to leave due to organisational changes within the company or health reasons, while the volume of the severance payment will depend on the number of years the employee worked for the company.

The modified Labour Code would change the rights of approximately 500,000 people working via temporary employment agreements, known in Slovak as “na dohodu”, who would gain similar working status and benefits to ordinary employees. The ministry had originally intended to grant them also the right to vacation time, but has finally dropped this benefit – and they will not be eligible for benefits such as meal contributions and vouchers either, SITA reported.

Changes will pertain also to the ‘chaining’ of fixed-term employment contracts: while currently it is possible to sign a fixed-term employment contract for three years, and then renew or extend it up to three times, the new code will permit the signing of such contracts for only two years, with the possibility of two extensions.

Under the planned changes, it will not be possible for employers to negotiate overtime work above a limit of 150 hours per year via a collective contract. Only medical personnel will be exempted from this rule. They will be able to work as many as 250 hours of overtime, according to TASR.

Nevertheless, the definition of dependent work remains an issue which has not been completely resolved. The Labour Ministry wanted to drop from the definition some of the features of dependent work, and to prevent situations in which employees would be forced to change their status while continuing to perform the same work. Richter said further discussion over the issue was possible.
Employers and businesses however agree that a thorough analysis of the application of the current code in practice should have preceded the revision.

“What we criticised regarding this amendment is that it was hastily drafted, it is poorly timed, it is very one-sided, and we have not received any analyses that would document from application practice that another change of the Labour Code is required in a such short a period of time,” said Ľuboš Sirota, the vice-president of the National Association of Employers, as quoted by SITA.

The amendment will threaten Slovakia’s competitiveness within the international business environment when it comes to attracting new jobs and investments, said Ivan Štefanec, a deputy chair of the Slovak Democratic and Christian Union (SDKÚ) opposition party.

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