A bill to change the Labour Code has been approved by the Lower Chamber  and will now be passed to the Senate and to the President for approval.

The changes, which are expected to come into force in 2012, include:

  • Invalid acts: enabling agreements which are invalid (because statutory requirements were not followed) to be validated subsequently (and treated as valid from the start) in certain situations; and also enabling an agreement to be declared null and void by the courts even if its validity was not challenged by a party in time
  • Probationary period: increasing to 6 months the maximum probationary period for managerial employees (those directly supervising other employees) during which their employment may be cancelled immediately without giving reasons
  • Fixed-term employment: increasing from 2 to 3 years the maximum length of a fixed term employment agreement but removing the exceptions permitting a longer fixed-term, such as for employees on maternity/parental leave 
  • Severance pay: changing the severance pay entitlement of an employee dismissed for organisational reasons from 3 months’ average earnings to a sliding scale 1-3 months’ average earnings depending on the length of employment, and extending the entitlement to employees choosing to leave due to a material deterioration in their working conditions following the transfer of their employment to a new employer  
  • Immediate termination: changing the compensation due to an employee terminating his employment with immediate effect (eg as a result of not being paid) to the salary payable during his notice period rather than 3 month’s average earnings. 
  • Temporary assignment: removing the administrative obstacles that deterred employers from seconding employees (with their agreement) to work temporarily for another company
  • Agreement on performance of work: increasing from 150 to 300 the maximum annual hours to be worked under an agreement on performance of work 
  • Overtime pay: allowing employment agreements to require employees to work up to 150 hours of overtime without additional pay, and employment agreements for managerial employees to exclude pay for overtime work completely 
  • Agreed salary in public sector: allowing public sector employees in the highest pay band to receive a fixed agreed salary instead of following the usual public sector pay formula based on salary classes and specific supplementary charges 
  • Holiday: allowing employees to choose the timing of their holiday where their employer has not allowed them to their annual holiday entitlement for a particular year by the end of June of the following year
  • Sick leave rules compliance: requiring employees on sick leave to follow the sick leave rules imposed by their doctor, and enabling them to be dismissed on notice if they fail to do so in a gross manner 
  • Non-compete: reducing (to half average salary) the compensation payable to departing employees agreeing not to compete with the employer’s business activities for a year after termination of employment 
  • Transfer of employees: entitling all employees whose employment is transferred to another employer to retain all rights they had with the transferor, even where their position is not equal with that of the transferee’s other employees, and limiting the validity of the employee’s rights under a collective bargaining agreement until the end of the calendar year after the year of transfer