Alternative forms of employment: Is Slovakia attractive for foreign and domestic investors?

The Slovak labor market is tight.

Employers are scrambling to find suitable candidates for a large number of manufacturing positions. The fate of the global economy is uncertain. There is no clear understanding of when the bottom will fall out, when companies will have to cut back. There is a strong desire for flexibility in hiring, both to attract workers and to protect companies should things go bad.

We at Noerr, as a strong partner to industry and manufacturing for more than 15 years, frequently get inquiries from clients about employment relations. “Almost daily, my phone rings with another client asking what the Slovak Labor Code permits in terms of employment flexibility”, says Pavol Rak, managing partner of Noerr. Typically, our clients seek guidance during the employment process, especially as concerns situations where a potential employee desires flexible working times or conditions.

By European standards, Slovakia is middle of the pack for labor flexibility. According to the Employment Flexibility Index published by The European Policy Information Centre (EPICENTER), Slovakia was ranked 27th (from 41) with a flexibility index of 60.7. (For those who want to impress at cocktail parties, the Danes were first, while the French, unsurprisingly, were last).

Practically, this means there are ways Slovak employers and employees can deviate from the normal full time employment contract, but that none are perfectly suited to the current state of business.

Fixed-Term Contracts can allow both employers and employees a modicum of freedom- for temporary positions, for trial runs, and the like. Outside of instances when seeking a temporary replacement for an employee on maternity leave, or long-term disability, however, Slovak law bans the “chaining” of such agreements,. such employment is possible only within a 2 year period.

Temp workers are another, partial, solution. Slovak law exempts temporary employment agencies from the chaining ban. The chaining of temporary assignments, is not. A temporary assignment to a single user employer may be for maximum of 24 months. Employers beware! This time restriction is linked to each particular employee and user employer. A temporary employee who switches temp agencies but continues with the same user-employer can only work on temporary status for a maximum of 2 years!

In all instances, the possibility exists of allowing employees to work remotely, being present at the workplace only when agreed. This type of employment provides employees their desired flexibility, the employer, lower operational costs. Attention needs be paid to compliance with regulations on data privacy and special arrangements regarding fulfillment of employer obligations (i.e. measuring working time).

Finally, flexibility can be achieved by modifying an employee’s working time. Slovak law does not specify when the working day begins. Allowing employees to work from home on occasion also is possible.

No matter which approach an employer feels would best address an individual employment situation, caution is advised. Slovak law strongly protects workers and penalties for violations can be high. Prior to entering into negotiations, companies would be well served discussing issues with a lawyer.

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