The Labour Code and Its impact on Slovakia´s Competiveness

The pandemic situation in Slovakia caused by COVID-19 also resulted in some changes in the legal order of the Slovak Republic involving the amendments to the Labour Code that is the fundamental code of rights and duties of employers, employees and their representatives. The Labour Code is also one of the essential legal regulations of the State forming a framework for the quality of the business environment in the Slovak Republic.

There are a few charts assessing the competitiveness of individual countries and the assessment of the aspects of the labour market and employment has an impact on the evaluation of economic competitiveness of a country on both, the European and world level.

The Labour Code, as a set of legal norms regulating the labour-legal relations, should form a legal framework that creates the conditions to maintain or grow the employment and ensure labour market flexibility.

The latest Labour Code, that is effective in the Slovak Republic, is the one from 2001, and since its effective date, it has been amended already at least fifty times; its particular amendments reflect the development of social and political forces in the recent twenty years. The recent amendments to the Labour Code were passed as a result of the current pandemic situation that significantly hit the whole world.

The Labour Code amendments in 2020 were passed mainly in the context of the institute of home labour – so called home office -, employees work schedule, holidays or obstacles to work and repeated extension of part-time employment.

Home office

Before the amendment to the Labour Code in April 2020, work from home or some other place except from the one agreed in the Employment Contract, other than the employee´s place of work, was only possible when the employer agreed with the employee on that in advance.

The amendment to the Labour Code made it more flexible in this case, because it offered to the employer the power to unilaterally make an employee work from home. Employees also have a right to work from home and the reason, for which the employer may reject employees´ request to work from home, is when there are so called serious operational reasons that would preclude this employees´ right. To prove the existence of such serious operational reasons in the event of a lawsuit will be the obligation of the employer, while the consideration of the seriousness of the operational reasons will always depend on the circumstances of the particular case.

In order to exercise these rights by either of the party to the employment relation, it shall be a type of work that enables so.

Working Time and Taking Holidays

The reduction of notification periods for the employer also brought higher flexibility in the employment environment, more precisely, in respect to the employer´s obligation to notify in advance the employee of the work schedule and to notify in advance possible holiday-taking by the employee (de facto determine holiday –taking by the employer).

While in the period before the pandemic it was necessary for the employer to notify the employee of the work schedule one week in advance, now it is a shorter - only two days´ period. A shorter period also applies when notifying the employer of taking holidays, originally it was 14 days and now it is a 7 days´ period in advanced.

Obstacles to Work

Due to the outbreak of the pandemic, many employers were forced to close or restrict their shops based on the measures of the Public Health Authority. Another group of employers was the companies whose activities were not restricted upon the measures of the competent national body, however, due to the decrease in orders, they were unable to assign work to their employees. In such situation, the employee was originally entitled to have wages compensated in the amount of 100% of his/her average income; in the event of a previous written agreement with employees´ representatives the wages compensation could have been agreed otherwise, however, not less than 60 % of the average income of the employee.

Due to the amended Labour Code, the wages compensation decreased from 100% to 80% of the average employee´s income for the staff of the employers whose activities were stopped or restricted due to decisions made by the competent body or due to stopped or restricted activities of employers as a result of declared emergency situation, public health emergency or the state of emergency. Said provision does not apply to the employees of the economic mobilization entities (for example doctors or nurses).

To complete, it is essential to point out to a new provision of the Labour Code, according to which, if an employee has a serious personal obstacle to work due to quarantine measures or isolation, the employer is obliged to accept his absence at work. The employee is not entitled to have wages compensated for the period of time, however, he/she is considered as an employee acknowledged as temporarily incapable to work, therefore, such employee is eventually protected against a one-sided notice or other sanction by the employer.

Employment for a Definite Period of Time and Its Extension

Another amendment to the Labour Code, the aim of which should be to maintain the employment, is about the possibility to further extent employment concluded for a definite period of time.

In the Slovak Republic, the Labour Code prescribes certain limits regarding the chaining of employee´s jobs for a definite period of time. Employment for a definite period of time may be concluded for not more than two years and it may be extended or repeatedly concluded for two years´ period, but not more than twice.

Aiming to obviate the growth of unemployment caused by the pandemic situation, lawmakers expressly determined, that in the event when employee´s employment concluded for a definite period of time is to end during the emergency situation, public health emergency or the state of emergency declared in connection with COVID – 19 or within two months after their cancellation, it may be repeatedly extended, even if it was already previously extended twice in the 2 years´ period. In this case, due to pandemic situation, it is possible to extent employment once for not more than one year.

The amendments to the Labour Code above were adopted due to the pandemic situation and shall be effective only during the period defined by law, more concretely, during the emergency situation, public health emergency or the state of emergency and two months after their cancellation.

In the current situation, it is difficult to estimate when the emergency situation started on 12.03.2020 is to end and it is also impossible to exclude that the above described changes will remain in our legislation even after the pandemic period. In any event, the increased flexibility in employment relations may have a positive impact on employment and also on overall evaluation of competitiveness of Slovak economy.

Článok bol publikovaný v magazíne Connection 2021-1 vydaný AmCham Slovakia.