Note: This article was written in 2003. Since business changes fast in Slovakia, the information contained in it might be out of date. Please review newer articles or contact a professional consultant before making business decisions.

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Slovak labour law reform

By Dagmar Žukalová

    
 
 Courtesy: KPMG

The Slovak Parliament recently passed major amendments to the Slovak Labour Code which in the words of Mr. Kanik, Minister of Labour, Social Affairs and Family means that "the Slovak Labour Code is one of the most liberal labour codes in Europe".

The stated intention of the Government in reforming the Code was to expand the Slovak labour market and make labour relations more flexible. The most important changes in the Slovak Labour Code, scheduled to become effective as of 1 July 2003, may be summarized as follows.

Labour relations

Employers will be able to choose several different types of labour contracts depending on their requirements:

  • regular employment contract
  • part-time employment contract concluded for less than 40 hours per week
  • part-time employment contract concluded for less than 20 hours per week
  • agreement on performance of work concluded for less than 300 hours per year
  • agreement on performance of work with a student for less than 100 hours per year

All the above contracts can be concluded for a limited period of time and the employer will be given the right to prolong such contracts without being obliged to provide legal justification for doing so up to a maximum three year period. Some categories of employees are exempted from this maximum three year period which means limited period contracts can be prolonged in these cases indefinitely.

The overtime limits will be increased so that an employee may work up to 400 overtime hours per year (currently the limit is 150 overtime hours). Within this total overtime limit of 400 hours a maximum of 150 hours may be requested by the employer alone and a further 250 hours overtime is allowed if mutually agreed between the employer and the employee.

Termination of employment

More flexibility will be introduced as regards an employer's right to terminate an employee's contract. When terminating an employment contract the employer is obliged to specify the reasons for termination. These will be more extensive than previously allowed. For example, an employer will from 1 July 2003 be entitled to terminate an employment contract for violations of work discipline or due to unsatisfactory work results. In such circumstances, prior written notice to the employee to improve work performance will be required.

In all cases the statutory notice period has been reduced to two months regardless of the reason for termination. An employee working for the same employer for more than five years shall be given three months notice, unless a more favourable notice period is agreed in the individual employment contract or a collective agreement.

When made redundant, an employee may either accept an agreement on early termination and receive a redundancy payment amounting to at least two-times his/her average monthly salary, or continue working during the notice period without the right to receive the redundancy payment, unless stipulated otherwise in a collective agreement. An employee working for the same employer for more than five years is entitled to receive a redundancy payment amounting to at least three-times the average monthly salary received by him/her during the notice period.

An employment contract concluded for a definite period can be terminated prior to the agreed upon term without the employer providing a reason. However, the dismissed employee is entitled to receive compensation for future earnings.

Part-time employment contracts for less then 20 hours per week as well as certain types of special agreement on performance of work can be terminated without the employer providing a reason on 15 days notice.

Further changes

This law also brings other important changes, including the possibility of both an employees' council and trade union organization existing within the same company, protection from discrimination and the possibility to employ pensioners on more flexible terms.

The author is a legal consultant at KPMG Slovakia specializing in Slovak labour law.


These articles and related information were published in Spectacular Slovakia 2003.

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