June 2016 - On 18 June 2016, new Slovak legislation on cross-border cooperation in the posting of workers within the framework of the provision of services” (the “Act”) came into effect. The Act, implements EU Directive 2014/67, governing the international secondment of employees providing services, which amends the Slovak Labour Code and should enable close cooperation with the competent authorities of other Member States in the enforcement of the Directive.
The Act sets out a new regime and obligations for employers posting employees to the Slovak Republic from another EU Member State, and from the Slovak Republic to another EU country.
What does ‘posting of employees’ mean?
The Act defines posting of workers as comprising the following situations:
- where employees are posted to the host state in order to provide cross-border services for a recipient of services on the basis of a contract with the domestic employer;
- where employees are posted cross-border between related parties (e.g. companies within a group) for whatever reason; or
- where employees are temporarily assigned cross-border to perform work at the premises and upon instructions of the host employer.
Before the adoption of the Act, only the third category (i.e. temporary assignments under specific provisions of the Labour Code) were regulated. The new rules will now apply to each of the above categories.
New obligations for employers
An employer established in another EU member state posting employees to Slovakia must notify the competent Slovak authority — the Labour Inspectorate (the “Inspectorate”) — of certain specified details of the assignment no later than the first day of the employee’s assignment to Slovakia. The foreign employer must also keep the original employment contracts and other related documents regarding posted employees at the place of performance of work in Slovakia and deliver the required documents (and arrange for their translation into Slovak language) upon request of the Inspectorate. The foreign employer must designate a contact person in Slovakia for communication with the Inspectorate on the above matters. These obligations are expected to significantly increase the administrative burden on foreign companies seconding or just temporarily assigning staff to Slovakia.
When posting employees to another EU Member State, a Slovak employer must first sign a written agreement on the posting with the respective employee, incorporating mandatory terms set out under the Labour Code, and inform the respective employee prior to the posting about his/her terms and conditions of employment applicable in the host state. The information to the respective employee about his/her working time and annual holidays must be set out in writing.
The Slovak employer must provide the Inspectorate, upon request, with all required documentation and information relating to the posting of its employees to other Member States, for the purpose of verifying compliance with the directive’s rules. The Inspectorate may request such documents and information if it is asked by the corresponding competent authority of another EU Member State to inquire into the Slovak circumstances of a particular case.
In both situations (i.e., the inward and outward posting of employees), employers must ensure that their seconded employees are entitled to the “core rights” that are in force in the host Member State and/or set by collective agreement in the host state, where applicable. This set of “core rights” covers, inter alia:
- minimum rates of pay;
- minimum overtime rates;
- maximum work periods (work time) and minimum rest periods; and
- minimum paid annual holidays.
Interestingly, the Act imposes the obligation to observe the core rights of the host country directly upon the Slovak employer, without making any reference to the application of the host country law. This may be particularly burdensome for Slovak employers seconding employees to Western European jurisdictions with rates of pay and other employee benefits substantially higher than those applicable in Slovakia.
If the new rules introduced by the Act are breached, the Inspectorate may impose a fine on the posting employer established in another Member State. The Inspectorate may impose a fine for non-compliance of up to EUR 100,000.