The Slovak Republic’s government has recently adopted a proposal for an amendment to the Labor Code (the Draft Bill). The Draft Bill has undergone interdepartmental consultations and will be submitted to the Parliament in September 2012. Although several of the proposed changes have met with strong opposition on the part of employers, it is expected that the Parliament will pass the Draft Bill without major changes to the wording proposed by the government. The Draft Bill is due to come into force as of 1 January 2013.
As the proposed Draft Bill includes substantial changes to the Labor Code, Squire Sanders has prepared an overview of a few of the most significant changes proposed.
Changes in the Scope of the Labor Code
The Draft Bill changes the definition of dependent work with the aim to limit usage of other types of contractual relationships for regulation of performance of work which in its essence is dependent work.
Monitoring of Employees
Under the Draft Bill, an employer that intends to start monitoring of employees, and monitoring employees` phone calls and emails is required to discuss with employee representatives the scope of monitoring, how the monitoring is conducted and the monitoring’s duration. The Draft Bill also introduces the right of an employee who thinks that the employer has acted in contravention of the Labor Code’s rules on monitoring of employees, and believes that as a result his/her privacy has been compromised, to file a claim with the court.
Strengthening the Position of Employee Representatives
The Draft Bill significantly strengthens the position of employee representatives. Several issues that until now the employer was able to stipulate by itself based on “discussion” with employee representatives now have to be “agreed” with the employee representatives. These issues include, among other things, introduction of flexible working time or introduction and changes to standardization of work.
Under the Draft Bill, the limit of the number of employees who have to be members of the trade union operating at the employer in order for the trade union to represent these employees will be abolished. Under the current Labor Code a trade union which wants to represent employees must, upon the employer`s request, demonstrate that at least 30 percent of the employees are members of this trade union organization. This limit is to be abolished in the Draft Bill and there will not be a minimum number of represented employees required in order for a trade union to be eligible to represent employees of the employer.
Termination of the Employment Relationship
Under the Draft Bill any termination of an employment relationship by the employer will have to be discussed with the employee representatives in advance, otherwise the termination is invalid. The current Labor Code does not contain this obligation. This new obligation should not be confused with the obligation of an employer to obtain prior consent of employees’ representatives to the serving of notice of termination or termination of employment with immediate effect of a member of the relevant trade union body, a member of a works council or a works trustee.
The Draft Bill proposes stricter grounds for serving notice of termination and also re-introduces the entitlement of an employee to be paid both remuneration for work performed during the notice period and a severance payment. Provided that an employee has worked for the employee for more than 20 years, he or she might under certain conditions be entitled to a severance payment of five times their monthly salary. The new rules on severance payment make termination of employment relationships more costly for the employer.
Under the current Labor Code, the statutory notice period is between one and three months depending on how long the employee has been employed with the employer. Under the Draft Bill the length of the notice periods stipulated in the Labor Code will be the minimum length, i.e. in an employment contract a notice period longer than the statutory notice period can be agreed.
Extension of the Hours Constituting Work at Night
Under the Draft Bill night work would be work performed between 10 PM and 6 AM instead of the current 5 AM. This will result in higher costs for employers whose employees work at night as these employees are entitled to additional pay for each hour worked at night on top of regular remuneration. This additional pay has to be at least 20 percent of the minimum wage €376.
The current Labor Code permits extension of the statutory three-month probationary period in a collective agreement up to six months. However, there are two specific categories of employees with whom an even longer probationary period of up to nine months can be agreed in an employment contract based on a collective agreement – executive employees who report directly to the statutory body or to a member of the statutory body and employees who report directly to these executive employees.
Under the Draft Bill the maximum probationary period that can be agreed with an employee is three months.With an executive employee who reports directly to the statutory body or to a member of the statutory body and with employees who report directly to these executive employees, a probationary period of a maximum length of six months can be agreed.
Changes to the Fixed-Term Employment Relationship
Pursuant to the current Labor Code, a fixed-term employment relationship may be agreed for at most three years and may be extended or renewed no more than three times within this three-year period. If the Draft Bill is passed it will be possible to agree a fixed-term employment relationship for no more than two years and to extend or renew it a maximum of two times in this two-year period.
Decrease of Maximum Working Time of Executive Employees
The current Labor Code allows a maximum working time of 56 hours per week to be agreed with executive employees who report directly to the statutory body or to a member of the statutory body and employees who report directly to these executive employees. Under the Draft Bill this option will be abolished.
Changes in Payment for Overtime Work
Under the Draft Bill it will no longer be possible to agree in a collective agreement a group of employees whose wage will include occasional overtime work of a maximum of 150 hours per calendar year.
Such an arrangement will be possible only in an employment contract and exclusively with executive employees who report directly to the statutory body or to a member of the statutory body, employees who report directly to these executive employees or with employees who perform planning, systems, creative, methodological or commercial activities, who manage, organize or coordinate complex processes or an extensive set of very complex equipment.
Changes in Agreements on Work Performed Outside the Employment Relationship
The Draft Bill makes several provisions of the Labor Code which were not previously applicable to agreements on work performed outside the employment relationship applicable to those agreements. This includes provisions on working time, distribution of working time, working time account, breaks at work, rest time, etc.
Changes in Compensation in the Case of Invalid Termination of an Employment Relationship
The Draft Bill proposes substantially increasing the compensation to be paid to the employee in the case of invalid notice of termination to an employee or termination of the employment relationship in an invalid manner with the employee immediately or within a probationary period. Under the current Labor Code if the overall time for which an employee should be paid compensation is longer than nine months, the employee is entitled to compensation for a period of nine months. Under the Draft Bill the employee is entitled to compensation for a period of up to 36 months. However, under the Draft Bill if the overall time for which the compensation is to be paid is more than 12 months, the court can, based on an application filed by the employer, proportionally reduce the compensation with respect to a period exceeding 12 months or not award the compensation at all.