A substantial amendment of the Slovak Labour Code, Act No. 311/2001 Coll., (the “Amendment”), the second in less than two years, will come into force on 1 January 2013. The Amendment, which generally strengthens the position of employees in employment relations, was adopted despite heavy criticism from employers, who warned that it might that it might cause massive layoffs on the Slovak job market.
The most important changes brought about by the Amendment include:
Stricter regulation of dependant work
New, more precise regulation of dependant work (being the basic characteristic of employment) aims at preventing fictitious self-employment (hidden employment). It will be easier for the Labour Inspection to determine whether a certain legal relationship qualifies as dependant work, as the Amendment has reduced the number of its statutory definition features to the following: (i) superiority of employer and subordination of employee; and the work is performed (ii) personally by employee; (iii) according to employer’s instructions; (iv) in the employer’s name; (v) in a time frame determined by the employer; and (vi) for a wage or remuneration.
More expensive dismissal of employees
The Amendment reintroduces the concurrence of the regular wage payment during the termination notice period on the one hand and a severance payment on the other. Currently, under specific conditions, employees have right to decide whether they prefer to work during the termination notice period and receive regular compensation for their work or whether they decide to terminate their employment and obtain a severance payment instead. Under the Amendment, certain employees will be entitled both to receive regular compensation for their work during the termination notice period and to obtain a respective severance payment.
Chaining limitation of the fixed term employment agreements
Under the Amendment, fixed-term employment relationship may be agreed for a maximum time period of two years (previously three years). Moreover, such a relationship may be extended or renewed only two times within the given two-year period (previously three times within a three-year period).
Negotiation on dismissals
The Amendment also reintroduces an obligation on the part of the employer to negotiate with the employees’ representatives in advance of the employer’s terminating an employment relationship either by notice or immediate termination. Non-fulfillment of the obligation of prior negotiation shall cause the termination notice or immediate termination to be invalid.
Legal regime of agreements
Employees performing work under agreements on work performed outside of an employment relationship (dohody) will gain certain rights enjoyed by regular employees, e.g. the right to earn a minimum wage, and a limitation in the maximum number of working hours.
In addition, the Amendment brings changes to other provisions of the Slovak employment law, such as the regulation of the probationary period, negotiations with employees’ representatives, the monitoring of employees, etc.
The declared intention of the Amendment’s drafters was to reintroduce the balance of rights and obligations between employer and employees. Nevertheless, the reintroduction of certain legal instruments that are burdensome for the employers is likely to have negative consequences on the Slovak labour market and the conditions for doing business in Slovakia. Following the Amendment, employers will closely consider employment law matters before entering/leaving the Slovak market or during the regular course of their business.