Substantial changes to the Slovak Labour Code, effective from 1 September 2011, have considerably strengthened employers’ power.
“Higher flexibility on the labour market and more employers willing to employ” could be the motto of the changes to the Slovak Labour Code, Act No. 311/2001 Coll. (Labour Code), which entered into force on 1 September 2011, based on the amendment to the Labour Code passed in July 2011 (Amendment). The labour market in Slovakia is expected to change substantially due to the Amendment since it significantly shifted the balance of rights and obligations in employment relationships in favour of employers. In addition to modifying most aspects of the labour law, the Amendment also introduced new legal concepts, such as the non-competition clause following the termination of the labour agreement.
Although used in labour agreements prior to the Amendment, non-competition clauses restricting the employee from working for the employer’s competitors after the labour agreement had ended had always been considered unenforceable as there was no legal basis for them.
The new Amendment for the first time enables the employer and employee to agree on a non-competition clause; however, limits are imposed on the discretion of the parties. Employer can conclude a non-competition clause only with an employee who during the employment relationship has access to information or knowledge not commonly accessible and whose use may seriously harm the employer. The restriction on entering into a labour agreement with an employer’s competitor cannot exceed one year after termination and the employee must be compensated at least 50% of its average monthly salary for each month of the restriction.
The parties may agree that if the employee breaches the non-competition clause, it will have to pay adequate monetary compensation to the employer. But this compensation cannot exceed the amount of compensation agreed as a consideration for the employee mentioned above. Compensation paid by the employee for a breach will be reduced in proportion to the number of months the employee observed the non-competition clause.
Severance payment v notice period
An employee whose employment was terminated by the employer for organisational reasons (winding up or relocation), redundancy, or a long-term inability of the employee to perform the work due to poor health will no longer be entitled to the concurrent payment of a salary during the notice period and a separate severance payment. Before the Amendment, the employee was protected and entitled to receive the severance payment irrespective of whether the labour agreement was terminated by mutual agreement or by the employer for the above reasons. Following the adoption of the Amendment, the employee will receive either a severance payment (if the labour agreement was terminated mutually) or a salary during the notice period (if terminated unilaterally by the employer).
The Amendment introduced several legal tools which enable agreement on more flexible working arrangements.
- Shared working positions allow the employment of a number of part-time employees for one full-time position. The employees divide working time and tasks among themselves.
- A working time account under which the employee may work more or less in a working week according to the employer’s needs.
- A “flexi-account” has been confirmed as a permanent tool in the Labour Code. It had been considered a temporary anti-crisis measure to end after 2012.
It enables the employer to “postpone” the use of the employee in case of serious interruptions of production and to then summon the employee again when production rises.
Other important changes include changes to the duration of the trial period, shortening of the notice period, extension of the repetitive use of labour agreements for a definite period, increase of overtime hours, and more. Because of the Amendment, the position of the employer has been significantly improved and the flexibility of the Slovak labour market enhanced – without too much political turmoil or worsening of the social climate in the country.
The restriction on entering into a labour agreement with an employer’s competitor cannot exceed one year after termination and the employee must be compensated at least 50% of its average monthly salary for each month of the restriction.