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5 November 2017

Slovenia: ‘mini labour market reform’ enters into force

The Slovene parliament adopted the so-called ‘Mini Labour Market Reform’. The reform leads to several amendments and changes of the Labour Regulations Act and the Labour Inspection Act. No common ground was found on changes to the Labour Market Relationship Act, the most controversial piece of legislation in the package.

In 2016, the government started talks with the social partners with the aim to create more effective action of the inspection services and greater legal security of employees when working under civil law contracts with elements of an employment relationship. Furthermore, the elimination of barriers when concluding employment contracts for indefinite periods was envisaged and reducing differences in comparison with other legal forms of work, while providing better social security for employees upon the termination of their employment relationships. The reform should lead to amendments of the Employment Relationship Act, the Labour Inspection Act and the Labour Market Regulation Act. The plan was to settle the legal base for an improvement of the labour market in 2017 and 2018, especially in the field of atypical forms of work, the effective activation of unemployed people and the promotion of quality jobs, with a suitable relationship between flexibility and security.

Shortly before the summer of 2017, the government reached a deal with social partners to change two of the acts, the Labour Inspection Act and the Labour Market Regulation Act. The bills state that an employment contract must be concluded for work that contains all elements of an employment relationship. Since this does not happen many times, the law stipulates that an inspector can order an employer to offer such a worker a contract within three days. Moreover, changes give the Inspectorate competences in case of non-payment of wages, with fines ranging from 2000 to 20,000 euro. Workers have the right of legal redress in case an employer does not submit decent contracts. The amendments of the Labour Market Regulation Act aim to introduce a more effective and easier labour market activation of the unemployed and to avoid that the period of unemployment is too long. Registration in the employment register becomes mandatory 3 days after receipt of a notice of dismissal or termination. If workers neglect this duty, their unemployment benefits can be reduced. Another amendment introduces an incentive for less educated recipients of unemployment benefits. The reform entered into force on 21 October 2017.

The third piece of the package, changes to the Employment Relationship Act, with a redefinition of the conditions for laying off workers, has been postponed, due to opposition of the social partners. The employers are against the proposed mandatory severance payment in case of a mutual agreed termination of a labour contract. The trade unions oppose financial sanctions of workers who do not report their disguised employment to the labour inspectorate.

(September 2018)

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