The Employment Law Review: Slovenia
Freedom of work is ensured under Article 49 of the Constitution of the Republic of Slovenia, and it is a freedom and right bestowed on all individuals. The umbrella act regulating employment relationships is the Employment Relationships Act (ERA-1).2 In addition to regulating the most important mutual rights and obligations between the two parties, the purpose of the ERA-1 is the effective inclusion of the employee in the working process of the employer, ensuring freedom of work, the employee's personal dignity and the prevention (or reduction) of unemployment. Other industry-specific acts are the Health and Safety at Work Act,3 the Pension and Disability Insurance Act,4 the Labour Market Regulation Act,5 the Labour and Social Security Registers Act6 and the Personal Data Protection Act (PDPA-1).7 The ERA-1 is applicable both for employers with their operations or address in Slovenia, and their workforce, as well as for foreign employers and employees, provided the employment contracts were concluded in the territory of Slovenia. It applies to employers in both the private and public sectors. Although ERA-1 ensures employees a minimum level of rights, in every sector or at the employer level, further rights might be granted under collective agreements, employers' internal rules or employment contracts.
Work may be performed in Slovenia on various legal bases, of which the most common is the employment contract. It is concluded between employer and employee and is the basis of the employment relationship, ensuring adequate legal protection. Work may also be performed under a civil law contract, but not when the conditions for conclusion of an employment law contract are met.
Individual or collective disputes are resolved under the specialist Labour and Social Court. The competencies, organisation and rules of procedure are set under the Labour and Social Courts Act. There are four courts of first instance, the Higher Labour and Social Court and the Supreme Court (the latter two are located in Ljubljana). The main objective in any employment dispute is to resolve the matter expeditiously. Therefore, once a case relating to the existence or termination of an employment relationship has been initiated, it will be prioritised. The key organisation for supervising the proper execution of laws, collective agreements and other acts is the Labour Inspectorate, which acts both on its own initiative and on the basis of external reports. The Inspectorate often emphasises the level of effectiveness of certain employment law provisions. Annual reports by the Inspectorate draw attention to challenges in the field of labour and employment law. This inspires domestic lawmakers to reflect on necessary changes. The Institute of Employment also has an important role, being responsible for helping unemployed workers to return to the labour market and informs workers of their rights when they become unemployed.
Year in review
The Republic of Slovenia declared an epidemic of the infectious disease SARS-CoV-2 (covid-19) on 12 March 2020. The government immediately approached the management of the situation and the long-term reduction of harmful consequences for the economy and the population with immediate intervention measures that could be implemented in a short time, and by formulating strategic measures to help the population and the economy. Those measures are called anti-corona packages (PKP), seven of which have been adopted to date.
One of the key measures, which were introduced with PKPs, was the temporary stay-at-home option. In the ERA-1, it is stipulated that when an employer is temporarily, but for a maximum of six months in a given calendar year, unable to provide work for its workers, the employer may send workers home to wait for work, in order for the employer to maintain employment and the available positions. In these circumstances, the worker is entitled to a salary compensation of 80 percent of the average monthly full-time salary from the previous three months. The Act Determining the Intervention Measures on Salaries and Contributions (ZIUPPP)8 stipulates that the right to a partial refund of wages paid to workers on a temporary stay-at-home is afforded to a company that, on the basis of a description of its business situation, determines that, for business reasons, it is temporarily unable to provide work for at least 30 per cent of employees at the same time and, therefore, decides to change the status of workers to temporary stay-at-home. The ZIUPPP stipulates that one half of the salary compensation is paid by the state and the other half by the employer, but the subsequent PKPs changed this provision and determined that all the compensation is paid by the state (if the employer fulfils the required conditions). These conditions changed almost monthly. The Act Determining Intervention Measures to Contain the Covid-19 Epidemic and Mitigate its Consequences for Citizens and the Economy (ZIUZEOP)9 determined that only employers, which, according to their estimates, will have revenues falling by more than 20% in the first half of 2020 compared to the same period in 2019 and will not achieve more than 50% revenue growth compared to the same period in 2019 in the second half of 2020, are eligible for compensation for the pay of workers. The next intervention measures act, amending the ZIUZOEP (the ZIUZEOP-A),10 required a fall in revenue of more than 10 per cent, which changed with the fifth PKP, the Act Determining Temporary Measures to Mitigate and Remedy the Consequences of Covid-19 (ZZUOOP),11 which required evidence of a fall in revenue of 20 per cent.
Another measure was the limitation regarding laying off workers for business reasons, either of those for which the employer claimed compensation for temporary stay-at-home, or any worker, as described in the following, which was enacted for the first time in the ZIUPPP. It was stipulated that during the temporary stay-at-home period, the employer may not initiate the procedure of termination of the employment contract or terminate the employment contract of (any) employees for business reasons. In addition, it also stipulated that for six months after the temporary stay-at-home period, the employer may not terminate the employment contracts of workers on temporary stay-at-home. Should an employer not pay its workers' compensation or the contributions for compulsory social insurance, or an employer initiates the procedure of termination of employment contracts or terminates employment contracts for business reasons, or orders overtime work, the employer must return all received funds in full. A penalty applies, inter alia, if an employer commences terminations for business reasons or terminates employment contracts for business reasons within six months. The Covid-19 Epidemic Intervention Measures Act (ZIUOOPE)12 stipulates that an employer should not dismiss workers while receiving the wage compensation for workers who are on temporary stay-at-home (32/6 ZIUOOPE). The Fourth Intervention Act (the Act Determining Intervention Measures to Prepare for the Second Wave of Covid-19 (ZIUPDV))13 provides that during the period of receipt of the wage compensation for workers who are waiting for work, the employer may not dismiss an employee for business reasons for whom it claimed a refund of wage compensation for temporary stay-at-home. Employers are also not allowed to terminate the employment contracts of a larger number of workers for business reasons, unless the proposed redundancies were initiated before 13 March 2020 and the employer for those workers did not claim a subsidy under the ZIUOOPE or the ZIUZEOP (10/6 ZIUPDV). The Fifth Intervention Law, the ZZUOOP,14 contains the same provision as the Fourth Intervention Law, except it complements the provision for terminating employment contracts of a larger number of workers with the condition that the employer did not claim a subsidy for these workers even under the ZIUPDV (76/6 ZZUOOP).
The Sixth Intervention Act (the Act Determining Intervention Measures to Mitigate the Consequences of the Second Wave of Covid-19 Epidemic)15 added to Article 126 of the ZZUOOP, which contains penalty provisions, a provision stipulating a penalty in the amount of between €3,000 and €20,000 for any employer that dismisses an employee while receiving a partial reimbursement of wage compensation (sixth paragraph of Article 76, ZZUOOP).
During the pandemic, a lot of employers have decided to redirect their operations and organise work from home. Article 169 of the ERA-1 stipulates that the type or place of performance of work may exceptionally be unilaterally temporarily changed even without the consent of the employee in exceptional circumstances (i.e., in cases of natural or other disasters), if such an accident is expected or in other exceptional circumstances when the life and health of people or the property of the employer is endangered. The obligation may be only temporary, for as long as the circumstances last or as long as the conditions under Article 169 of the ERA-1 are met and a change in the type or place of performance of work is necessary. It is also stipulated that when the employer orders work at home in the event of exceptional circumstances, the Labour Inspectorate must be notified as soon as possible. With the Sixth Intervention Law (the ZIUOPDVE),16 the government managed to simplify the notification procedure, such that employers are now able to send notices of work at home for employees electronically via the Slovenian Business Point (SPOT) system (106/2 ZIUOPDVE).
As early as March, the Labour Inspectorate emphasised that, even when organising work from home, an employer is obliged to ensure safe working conditions. Measures provided by the employer on the basis of a job risk assessment are generally not sufficient in exceptional circumstances. Therefore, employers must implement additional measures to ensure, as far as possible, safe and healthy working conditions for employees in the given circumstances. In doing so, they are obliged to follow all regulations, instructions and recommendations at the state or local levels. In the event of an emergency, however, when an employer requires employees to work at home as soon as possible, it is understandable that the employer often will not be able to carry out all the necessary procedures (i.e., assess new risks, check the adequacy of the situation at home, take any other necessary action for working from home) to determine the suitability of the work environment. Since cases of working from home in exceptional circumstances usually involves office work or working with a computer, it is not expected that there could be any harmful consequences for workers' health and safety if any of the preliminary procedures are not carried out in the short term, as long as the extraordinary measure of working from home do not go beyond the consequences for which the order to work from home was originally mae. Therefore, it is possible for an employer to organise working from home in exceptional circumstances and then, as soon as possible, to check the working conditions at workers' homes and introduce any additional measures to ensure safe and healthy work.
According to Article 162/4 of the ERA-1, an employee has the right to use any annual leave that has not been used in one calendar year until 30 June of the following year or, if the employee was absent because of illness or injury, maternity leave or childcare leave, until 31 December of the following year.
The Supreme Court issued two judgments on 14 January 2020. In both cases, the Court discussed the fact that the worker did not have the opportunity to use the annual leave before the end of the transfer period. In Judgement VIII Ips 42/2019, the worker was on a sick leave from 26 April 2014 until 30 November 2015 and had 30 days of unused annual leave from the year 2014 at the end of 2015. At the beginning of 2016, the employer annulled the worker's unused leave from 2014. The worker claimed she was entitled to use the leave, and also claimed monetary compensation for the unused leave for 2014. In Judgement VIII Ips 83/2019, the worker had 17 days of unused annual leave from the year 2014 and 32 days of unused annual leave from 2015, when his employment relationship was terminated in the year 2017. The worker could not use his annual live in the preceding years because he was on continuous sick leave from 24 December 2013 until 6 June2017 because of an injury and he objectively could not use his leave entitlement. The employee filed a claim for payment of monetary compensation for unused annual leave for 2014 and 2015.
The Supreme Court made reference to the Court of Justice of the European Union (CJEU), which claimed, that in an instance where the worker objectively could not use the annual leave to which he or she was entitled, the employee may still use it. The Supreme Court referenced the CJEU judgment in Case C-214/16, in which it was stated that the right to paid leave cannot be extinguished if the employee had not in fact been able to exercise that right. However, the right to take annual leave is not unlimited, as the CJEU explained, except in exceptional cases, and the Court asserted that a period of 15 months for transfer shall not be deemed too short to make use of it. The Supreme Court stated in Judgement VIII Ips 83/2019 that the National Assembly of the Republic of Slovenia has taken into account the above-mentioned case law of the CJEU in formulating the provision of the fourth paragraph of Article 162 of the ERA-1. In the explanatory memorandum to the draft law, the Assembly expressly referred to the judgment in Cases C-350/2006 and C-520/2005 and to the judgment in Case C-214/2010. They explicitly stated that the period of use of annual leave in the fourth paragraph of Article 162 is already taking into account the recent case law of the CJEU. In the fourth paragraph of Article 162 of the ERA-1, the transfer period is set at 12 months (until 31 December of the following year), which means that the reference period and the transfer period are equal. The question could therefore be raised as to whether the transfer period, as is set currently in the ERA-1, thus actually satisfies the requirement in the CJEU judgments that the transfer period is longer than the reference period. It also raises a question whether the legislator had correctly applied CJEU case law into Slovenian law when adopting the ERA-1, in which the transfer period is set at 12 months, whereas CJEU case law (C-214/2010) states that a 15-month transfer period in an appropriate amount of time.
Basics of entering into an employment relationship
i Employment relationship
Under Article 11 of the ERA-1, the employment relationship shall be deemed concluded with the signing of the employment contract. The contract must be concluded in written form. From this point, the worker assumes the rights and obligations codified in relevant legislation and is registered within the social security system. Under the Prevention of Undeclared Work and Employment Act, employers are prohibited from allowing an individual to work without having executed an employment contract. The contract also provides safeguards and assistance to employees, and ensures they are aware of their rights. A worker who is performing work without an employment contract may at any time request that the employer provides him or her with a valid employment contract. A worker may also file a complaint with the competent supervisory authority against the employer or file a lawsuit at court, on the basis of illegal employment and the failure to issue an appropriate employment contract.
The key elements of a valid employment relationship are integration into an organised work process, performing the job in person and continuously, subordination (i.e., working according to the instructions, and under the supervision of the employer) and remuneration. In this context, work may not be performed on the basis of a civil law contract, except as provided for by law. In the event of a dispute about the existence of an employment relationship between a worker and an employer, the court will assess whether the aforementioned elements are present. If neither the employer nor the individual who has been working illegally prove the duration of the employment, it shall be deemed that the worker was employed illegally for three months and the employer is obliged to provide a written contract within three days of the supervisory authority determining that there has been illegal employment.
An employer must provide an employee with a written proposal of the employment contract at least three days prior to commencement of employment. Once it has been negotiated and prior to commencement of work, the employee must countersign the employment contract. For any specific points on the conclusions, validity, termination or other matters concerning the employment contract that are not explicitly regulated under the ERA-1, the rules of the Civil Code17 will apply. If the parties did not conclude the employment contract in writing, or if not all the components of the employment contract are expressed in writing, the existence and validity of the employment contract is not affected.
The usual procedure under Slovenian legislation is for employment contracts to be for an indefinite term, provided the required conditions exist for the contract to be concluded and adopted. The ERA-1 also encourages the use of indefinite-term contracts by allowing employers not to pay social security contributions due for unemployment during the first two years of such a contract with an insured person (as referred to in the first, second, third and fourth paragraphs of Article 14 of the Pension and Disability Insurance Act) who has not reached the age of 26, and mothers who are caring for a child under the age of three. The employer is eligible for this benefit only if it is the employee's first employment for an indefinite period and provided that the employee remains employed for at least two years.
Fixed-term employment contracts may be concluded as an exception, subject to certain restrictions. Nevertheless, Article 54 of the ERA-1 provides for numerous instances under which an employer may conclude a fixed-term employment contract with a worker:
Employers may not conclude a fixed-term employment contract for the same work with the same worker for a continuous term of more than two years. In practice, it is common for employers to circumvent this rule by repeatedly employing workers for short periods (e.g., six months) until the two years have been reached. Employers will also reclassify a job after the two years, to obscure the fact that the work being performed is the same. If a worker continues doing the same work after the fixed term lapses, it shall be deemed that the worker has concluded an indefinite-term employment contract (and thus a 'transformation' of the employment contract has occurred). Severance payments should be payable after the lapse of the fixed-term period, with some exceptions.
An employment contract must always include the following information about the contracting parties:
Either party to an employment contract may propose a change, at any time; however, both parties must agree to the changes. The employment contract is amended by signing an annex to the contract or by concluding a new employment contract; in certain instances, the latter is mandatory.
ii Probationary periods
As part of the employment contract, the employer and the worker may agree on a probationary period, which may last no longer than six months. If the employer determines during the probationary period that the worker did not perform sufficiently well and therefore did not complete the probationary period successfully, the employer may lawfully terminate the worker's employment contract, subject to giving seven days' notice. The employer may also terminate the contract during the probationary period if it is determined, based on the work performed, that the probationary period will not be successful, subject to the employer providing valid and substantiated reasons for the termination. During a probationary period, an employer may, in principle, terminate a worker's employment contract if other reasons exist (such as breach of a contractual obligation or other employment obligation).
iii Establishing a presence
Pursuant to general rules of European law and Slovenian commercial and company law, the pursuit of economic activity in the territory of Slovenia may require the establishment of a subsidiary or a branch office. Under Article 57 of the Treaty on the Functioning of the European Union (TFEU), it is possible for a person to temporarily pursue its business in the Member State without having to establish a subsidiary or a branch office. The CJEU held in the Gebhard case that a temporary exercise of business is to be established case by case based on the duration, frequency, regularity and continuity of the provision of service. Accordingly, if the exercise of business activities is deemed to have been temporary, the establishment of a subsidiary or a branch office would not be required. The freedom of provision of services is also established under the Slovenian Act on Services in the Internal Market.20 Under the Companies Act,21 commercial activities in the territory of Slovenia may be exercised either through an incorporated company (Articles 3 and 6) or through a registered branch office (Article 676). The establishment of a subsidiary or a branch office in Slovenia for business would, in principle, not be required if the business activity could be deemed temporary. Slovenian legislation does not contain conclusive rules that would define exactly what constitutes a temporary provision of services. Therefore, each case must be assessed, considering the duration, frequency, regularity and continuity of the provision of service, to determine whether the establishment of a subsidiary or a branch office is required. Further, tax legislation provides specific rules and practices when a permanent establishment is deemed to exist.
A foreign employer may hire workers through an agency and a foreign employer may provide workers to the user, subject to local laws.
A foreign company that is not officially registered in Slovenia's jurisdiction may engage an independent contractor but, as mentioned above, if the elements of establishment have been met and the employment relationship exists, then the company must undertake the requisite procedures.
The prohibition on competition is defined in Article 39 of the ERA-1 as a legal prohibition of a competitive activity. While employed, a worker may not, without the written consent of the employer, perform business that is within the type of activity that is actually carried out by the employer, and which constitutes or could constitute competition in relation to the employer's activity. The employer may claim compensation damages within three months of the day it learned of the worker's behaviour or within three years of completion of the job.
Nevertheless, legislation provides a competition clause to be included in the employment contract. This is a contractual prohibition, applicable after the cessation of the employment relationship, of any competitive activity, used in any instance, if the worker acquired technical, production or business knowledge and business connections while employed, and uses the skills or connections when he or she is no longer working for the employer. The parties must agree to the terms of the competition clause expressly and in writing. The competition clause cannot be binding for more than two years after the cessation of the employment contract and may be concluded only after termination of a employment contract for the following reasons:
The competition clause should not exclude the possibility of the worker engaging in suitable future employment. If compliance with the clause precludes the acquisition of earnings comparable to the worker's previous salary, the employer must pay at least one-third of the previous monthly compensation for the entire duration of the prohibition. The worker and the employer may terminate the competition clause by mutual agreement.
i Working time
Full-time employment should not exceed 40 hours per week. The working day can last up to 10 hours. The daily, weekly and monthly time limits may be considered as an average limit over a period, specified under the law or a collective agreement (normally six to 12 months). The worker is entitled, within any period of 24 hours, to a rest period that lasts continuously for at least 12 hours. In addition to this right to daily rest, the worker is entitled to a break of at least 24 continuous hours during a working period of seven consecutive days.
Night work is considered to be work carried out between 11pm and 6am the following day. If the working hours are determined as being during the night, eight hours of continuous work between 10pm and 7am the following day shall be considered night work. The working time of a night worker may not exceed an average of more than eight hours per day over a four-month period, and the working hours of a night worker who works in a place where there is a greater danger of injury or risk to health, as established by a risk assessment, shall not exceed eight hours per day.
Overtime work may not exceed eight hours per week, 20 hours per month or 170 hours per year. However, with the worker's consent, overtime may exceed the annual limit, but must not be more than 230 hours per year. At any time the employer orders overtime work that exceeds the limit of 170 hours per year, the employer must obtain the worker's written consent.
A worker is entitled to remuneration for work done both during regular hours and as overtime. Article 128 of the ERA-1 states that workers are entitled to allowances for work in special working conditions, arising from the allocation of working time as overtime. It also states that the amount of the allowances shall be determined by a collective agreement at branch level, as defined by the Standard Classification of Activities. In recent rulings, the Supreme Court has firmly upheld the position of the European Committee on Social Rights in relation to Part II, Article 4 of the European Social Charter, asserting that overtime pay should always be higher than pay for regular work, since it has required more effort.22 However, another suitable compensation for hours worked as overtime is time off work, provided the employer also pays an appropriate additional allowance. The Supreme Court also ruled that workers are entitled to an overtime bonus for all additional overtime hours, even if the number of overtime hours worked is more than is permitted by the law (as stated above).23
A majority of foreign workers come from the republics of the former Yugoslavia (mostly from Bosnia and Herzegovina, Croatia, Kosovo and Northern Macedonia). The growth of foreign workers is in part a result of Slovenia's economic growth but also of the Employment, Self-employment and Work of Foreigners Act,24 adopted in 2015. This Act provided workers with favourable solutions and simplified the process for obtaining work permits.
The motivation for adopting the aforementioned law were the inadequate regulation of foreign work permits, which had led to significant violations of workers' rights and the exploitation of workers, and the obligation to codify Directive 2011/98/EU of the European Parliament and of the Council25 into national law. Slovenia has engaged in several bilateral agreements with the countries from which most foreigners workers originate (e.g., The Agreement between the Government of the Republic of Slovenia and the Council of Ministers of Bosnia and Herzegovina on the employment of the citizens of Bosnia and Herzegovina in the Republic of Slovenia, which was ratified by law in 2012), which brings additional legal security to the workers.
In accordance with the Employment, Self-employment and Work of Foreigners Act, a foreigner is a person who does not have citizenship in Slovenia. The law applies to all foreigners, with the exception of certain groups of persons (such as foreign journalists, priests, diplomats, lecturers and athletes). Slovenia, as an EU Member State, is also bound by the EU's legal rules and principles. One of the fundamental principles and values of the European Union is the free movement of workers (Article 45, TFEU), which, in relation to employment, remuneration and other working and employment conditions, prohibits distinction and discrimination on the grounds of the nationality of workers from EU Member States. Citizens of Norway, Liechtenstein, Iceland and Switzerland are also entitled to the free movement of workers owing to binding international agreements with Slovenia.
A single permit allows a foreigner to enter, reside and work in the country, and is issued by the administration units (which are set up to perform state administration tasks) for a period of one year, with a possibility of extension. Consent to the issuance must be given by the Employment Service of Slovenia. The permit gives the foreigner access to the labour market – on the basis of which the foreigner may perform work under civil law contracts, get a job with any employer, or several employers, or be self-employed. A single permit does not provide for a foreign worker to perform work as a posted worker for an employer that is established or resident outside Slovenia.
A single permit, issued on the basis of consent for employment being granted, is tied to the actual need of the employer. For this reason, the employer has to participate in the process of granting consent. One of the conditions for issuance is an employment contract, concluded with the employer, in accordance with the ERA-1. A foreigner, who has concluded an employment contract in accordance with the ERA-1 has the same rights and obligations as citizens of Slovenia. It is important to take this into account for provisions regarding salary, rest, working time and security and health at work, since the majority of violations and abuses that arise are n these areas. Once a single permit has been issued, the foreigner may be employed only by an employer who has participated in the process of issuing the single permit, since it is the employer who is required, in accordance with the law, to meet the terms for the foreigner's employment.
In accordance with the Employment, Self-employment and Work of Foreigners Act, the employer is required to fulfil several conditions for a foreigner's employment, including, among other things, ensuring that there are no other suitable unemployed persons on the register of unemployed persons (the employer must obtain written notification from the Employment Service of Slovenia). The employer must also be operating an active business, must not be in a bankruptcy proceeding or in liquidation. The employer is obliged to register the foreigner in the company schemes for compulsory pension and disability insurance, compulsory health insurance, parental care and unemployment insurance, so that the foreigner, once registered, has the same rights as the citizens of Slovenia.
There is no limit on the number of employees or foreign workers an individual employer may employ. The number of foreigners in the labour market can be limited each year by the government with a quota of consents for issuing single permits, or with a quota of permits for seasonal work, taking into account the actual needs of the labour market. In addition to quotas, the government may restrict or prohibit the employment, work or self-employment of foreigners by region, occupation, activity or company. The government may, when it is justified by a public policy, public security, public health, general economic interest or foreseeable movements on the labour market, restrict or prohibit the arrival of new foreigners intending to seek employment or work in Slovenia as a whole or in certain regional areas.
Employers are required by the Labour and Social Security Registers Act to keep records of all workers, and they must, at the request of the competent authority, provide the necessary information.
A worker's obligations relating to the performance of work are set forth in the ERA-1 (such as performing work according to the instructions of the employer, compliance with the rules on safety and health at work, and the obligation to inform about any essential circumstances), and the worker and the employer regulate their relationship with an employment contract. The worker undertakes to perform the work in accordance with the instructions and under the supervision of the employer. For a more efficient, uniform and coherent operation (and consequently, uniform instructions and supervision of all workers), the employer can adopt internal regulations and rules relating to work processes, relationships with the employer, and help to clearly define the rights and obligations of both the workers and the employer. In an internal ruling, a worker's rights and obligations can only be regulated more favourably than foreseen by the law or a collective agreement, if any exists.
If a worker's behaviour or conduct is contrary to the general requirements of the employer or other regulations, he or she violates the obligations arising from the employment relationship. With the disciplinary responsibility of the worker so established, the employer may issue a warning note or other sanctions, as provided in a collective agreement at the branch level, as defined by the Standard Classification of Activities.
The employer must inform the worker of the alleged violations and allow him or her to make a statement within a reasonable time. However, the ERA-1 stipulates that a disciplinary sanction may not permanently change a worker's position from the perspective of labour law. A trade union, the works council or workers' representative may participate in any disciplinary procedure (the latter being applicable, for example, if a worker is not a member of a trade union), but only with the worker's consent. The decision resulting from the disciplinary procedure has to be written, explained and delivered to the person to whom it applies. The employer must reach a decision within a relatively short time – the subjective deadline is one month from the day the employer found out about the violation and the objective deadline is three months from the day the violation occurred.
The ERA-1 is the principle applicable law, supplemented by various regulations, from which the obligations of employers to adopt several different internal rules or regulations derive. The obligations and content of these depend mostly on the activity of the employer and the size of the organisation.
In general, there are three types of leave to which parents, and other persons who are insured, are entitled under the Parental Protection and Family Benefits Act (PPFBA-1):26 maternity leave, paternity leave and parental leave. Employers are obliged to provide workers with leave from work in accordance with the law. The right to compensation is granted to those who have the right to take leave and who have been insured under the PPFBA-1 the day before the start of each type of leave. During maternity leave, an insured person is entitled to maternity allowance, during a period of paternity leave of 30 days to paternity allowance, and during parental leave the right to parental allowance. The leave benefit is paid by the state.
To be entitled to the relevant leave, the worker must inform the employer of the intention to take the leave 30 days in advance.
A mother is obliged to take 15 days of maternity leave but is entitled to 105 days. An expectant mother should start maternity leave 28 days prior to the scheduled date of delivery. If this maternity leave is not taken, it cannot be used after the birth of a child unless the birth occurred before the scheduled date. A father is entitled to use maternity leave if the mother (1) dies, (2) leaves the child or (3) is permanently or temporarily incapable, in the opinion of a specialist doctor, of the care of the child. A father is entitled to maternity leave to the same extent as the mother, reduced by the number of days that the mother has already taken, but for not less than 28 days.
A father is entitled to 30 days' paternity leave after the birth of a child or children. This right is non-transferable. A father shall take at least 15 days of this entitlement at one time, as either full or partial absence from work, between the date of birth of the child and one month after expiry of the period of parental leave being taken, or from the entitlement to parental allowance for that child.
Each parent is entitled to parental leave for 130 days. Of this, a mother can transfer 100 days to the father; the other 30 days are non-transferable. A father may transfer all 130 days of his parental leave to the mother. One of the parents must use the parental leave immediately after the maternity leave has expired. If no one is entitled to maternity leave for the child, the right to parental leave shall be recognised immediately after the child is 77 days old.
Workers on parental leave are protected from dismissal by Article 115 of the ERA-1, which states that an employer may not terminate the employment contract of a worker during pregnancy or who is breastfeeding a child up to one year of age, or parents, at the time they take parental leave in a concise series in the form of full absence from work, and for one month after using this leave. In practice, the prohibition from dismissal applies also to workers on paternity leave, albeit the law uses the term 'parental leave'.
According to the rules of the Act on the use of the Slovenian language, in the territory of Slovenia, Slovenian must be used by all legal and physical entities that perform a registered activity in the country, in all communications with clients in Slovenia. This said, although employment contracts must be concluded in Slovenian, a bilingual format is permitted. It is the obligation of the employer to determine, for each working post, the adequate level of Slovenian that is required for that particular working post, given the nature and frequency of that working post when it comes to communication with clients, and to set the level of knowledge of Slovenian when posting job vacancies, if workers engaged for the post are required to interact with clients.
Employees' participation in management is a constitutionally protected right in Slovenia, regulated under Article 75 of the Constitution. The Constitution further authorises the legislature to regulate in more detail the methods and conditions for exercising the right to co-decision. The Act that regulates these matters in more detail is the Worker Participation and Management Act (WPMA),27 adopted for the first time in 1993. The WPMA sets out the methods and conditions for employee participation in corporate governance (regardless of the form of property), sole proprietorships with at least 50 workers and cooperatives. This transposes the requirements of European law into national law. Unless otherwise provided in a special law, workers in public utilities, banks and insurance companies shall also have the right to participate in management.
The purpose of employees' participation is the identification and implementation of activities aimed at improving working conditions and, consequently, the successful operation of company business. Employees' participation in management is exercised by the right to initiative and the right to respond, the right to be informed, the right to give opinions and proposals, the possibility or obligation of joint consultations with the employer, the right to participate and the right to withhold employer decisions. An emphasis is also placed on the impact of the content and organisation of work, on activities aimed at improving the working environment and conditions, and humanising the company.
Employees may exercise the rights under this Act both individually and collectively, through a workers' council or a workers' representative, a workers' assembly or other representatives within the organisation. An individual employee may refuse to exercise the right to vote and cannot be forced to do so. These rights are supported by case law: for example, if a voter does not want to vote, it is their right not to.28
The WPMA also mentions the possibility of a workers' council and an employer reaching an agreement regarding other ways in which workers may participate in the management of the company.
A workers' council may be formed if the company has more than 20 employees with an active right to vote. In companies with fewer than 20 employees with an active right to vote, employees may instead exercise their rights through a workers' representative. The active voting right applies to all who have been employed for a continuous period of at least six months. Managers, procurators (leading employees) and family members of management staff are not entitled to vote. The number of council members depends on the total number of employees in the company.
Every employee who has the right to vote, and who has been employed by the company for at least 12 months continuously, has the right to be elected to the workers' council (passive voting right). The members of the council are elected by secret and direct ballot. Every employee holds one vote and can vote personally. The decision to call the elections must be published in a way that is accessible to all employees. The WPMA specifies the details of the election process and the initiation of newly elected members. Elections are valid if attended by more than half of the members with an active right to vote. If only half, or fewer than half, have participated, the elections shall be held again, but only after six months have passed.
The term of office of workers' council members is four years with the possibility of re-election. The council will usually meet during working hours, with due respect of working processes and needs. A company is obliged to provide members of its workers' council the right to five paid hours per month for participation at these sessions. Moreover, the employer has to cover necessary expenses for the work of the workers' council, the expenses of the premises required, the cost of material resources and administrative staff.
In companies with between 50 and 300 employees, some members of the workers' council may perform their function within part-time hours; in larger companies (with more than 300 employees), members can be appointed to perform the function professionally.
Employees' participation in management within company bodies is realised through employees' representatives within company management and control bodies. In a two-tier system of management, participation is exercised through employees' representatives on the company's supervisory board or the supervisory board of the cooperative, or through the workers' representative board of directors of the company or of the cooperative. In a one-tier management system, employees' participation in management is exercised through employees' representatives on the board of directors and on the committees of the board of directors, but also through a workers' representative within the executive directors of the company or cooperative.
Trade union freedom stems from the fundamental human right to associate. Article 76 of the Constitution stipulates that workers are free to form and operate trade unions and to be members thereof. That being said, it is possible to refer to organisational freedom, in respect of the rights of both employees and employers to establish and join their own organisations, with a prohibition on conditionality. Another aspect is the freedom of action in rights regarding the functioning of organisations (such as adopting internal policies, collective bargaining, election of representatives). Protection of trade union freedom against interference by the state and other social partners is afforded by the Trade Union Representatives Act,29 which determines matters regarding status. Important legal issues regarding the functioning of trade unions are already determined by the ERA-1, including certain obligations of the employer towards trade unions, written notifications to trade unions, the position of trade union representatives, the protection of trade union representatives, and so on. Of particular importance is the provision of Article 6 of the ERA-1 on the prohibition of discrimination, with reference to the prohibition of discrimination on grounds of union membership. In addition, the role of a trade union is important in the adoption of the general legal regulations of the employer, as the employer must send them to the trade unions for an opinion before adoption. A trade union may also be included in the procedure of a proposed lawful or exceptional termination of an individual employment contract or in the event of a mass lay-off.
Unlike a workers' council, which, in cooperation with employers, aims to improve the company's business performance by improving working conditions, the aim of the activities of a trade union is protecting the rights and interests of all workers with a given employer.
Workers' representatives (including trade union representatives, members of workers' councils, workers' representatives or members of a supervisory board representing workers) are protected from termination of their employment contract. An employer cannot terminate an employment contract with a worker's representative without the consent of (1) the workers' council, (2) the workers who elected the representative or (3) the trade union, provided the representative complies with the law, the collective agreement and the employment contract. An employer may terminate the employment contract of an employee who is a workers' representative only for a business reason, that is to say, if the representative refuses an offer of suitable employment with the employer or if the employment contract is terminated during the process of winding up of the employer's business.
The aim of providing protection against dismissal is to achieve a higher quality of performance during the workers' representative's term of office and applies for the entire duration of the term of office and for a year after cessation of that term.
Data protection is regulated under the PDPA-1, which was adopted in 2004. Since the enactment of the EU General Data Protection Regulation in May 2018, despite the efforts of lawmakers, Slovenia has not adopted a new and revised PDPA-2, which will harmonise its provisions with the EU Regulation. However, it is expected to be adopted in 2021.
According to the PDPA-1, the processing of personal data represents any form of activity conducted in relation to personal data, in particular the collection, acquiring, entry, managing, saving, adapting, changing, recollection, insight into, use, disclosure with transfer, communication of, spreading, giving for disposal, classification, connecting, blocking, anonymising, deletion or destruction.
Personal data may be processed only if permitted by the law, or if the individual concerned has given personal consent. The purpose of processing must be determined in the law, or the individual must be informed of the purpose of the processing beforehand.
Under the PDPA-1, the term sensitive personal data covers data relating to racial, national or ethnic origin, political, religious or philosophical beliefs, trade union membership, health, sex life, entry or deletion from criminal records, and biometric features, subject to the condition that its use could identify the individual in connection with any of the aforementioned circumstances. Personal data may be processed, among other things, (1) if the individual has personally given explicit consent, which is normally in writing, or (2) if the processing is necessary for establishing compliance with the obligations and specific rights of the data controller of personal data in the field of employment in accordance with the law, which also provides adequate guarantees of individual rights. Sensitive data must be specifically designated as such and unauthorised persons should be restricted from being able to access it. During the transfer of sensitive personal data via telecommunications networks, the data is considered adequately protected if transmitted through the use of cryptographic methods and electronic signature to ensure illegibility or lack of recognition during transmission.
The employer may request from the candidate that he or she submits proof of fulfilling conditions for the performance of work. It is prohibited to request information regarding family status, marital status, pregnancy, planning of family and other similar data, if the information is not directly necessary or in connection with the employment relationship.
Article 89 of the ERA-1 states that an employer may terminate a worker's employment contract only if there is a valid reason that prevents the continuation of work under the conditions set under that contract. The law considers the following reasons as valid:
The ERA-1 explicitly provides for unjustified reasons of termination, under Article 90. In a case of unlawful termination, the employee may request at the labour court an acknowledgement of the illegality of the termination of contract within 30 days of being served the termination, or from the day he or she learned of the violation of the respective rights.
If so requested by an employee, an employer must notify the trade union of which the worker is a member of the intended lawful or exceptional termination of the employment contract, when the procedure is initiated. If the worker is not a member of a union, at the request of the employee, the employer must inform thereon the work's council or the workers' representative.
If an employer terminates an employment contract for a business or incompetence reason, the employer may simultaneously offer the employee the conclusion of a new employment contract. If the employee accepts the employer's offer, he or she must conclude a new employment contract within 15 days of receiving the written offer. In the event that a new, suitable, permanent employment contract is offered to the employee, he or she is not entitled to severance pay. It is deemed that suitable employment is that which requires the same type and level of education as the worker needed to perform the work for which the previous employment contract was held, and for the same working hours as previously agreed. Further, the place of work must not be more than three hours' away in either direction by public transport or by transport organised by the employer from the place of residence of the employee. If the employee does not accept the employer's offer to conclude a new employment contract for a suitable employment and for an indefinite period, he or she shall not be entitled to severance pay. In the event that an employee accepts an unsuitable new post, he or she is entitled to a proportionate part of the severance pay as agreed with the employer.
In the event of termination of an employment contract during a probationary period by either the worker or the employer, owing to a failure to successfully complete the probationary work, the notice period is seven days.
The notice period for a lawful termination of an employment contract by the employer for a business or incapability reason depends on the length of service with the employer:
If an employment contract is terminated by the employer for breach of a contractual obligation or other employment obligation, the notice period is 15 days.
When an employer is undergoing bankruptcy proceedings, the insolvency administrator may, subject to a 15-day notice period, terminate the employment contracts of those whose work has become unnecessary as a result of the initiation of bankruptcy proceedings or forced liquidation with the employer. In the case of a court-approved compulsory settlement, the employer may terminate the employment contracts with workers, subject to giving 30 days' notice, if the terminations are provided for as a specific measure in the financial restructuring plan.
The employee and the employer may agree in writing on an appropriate cash benefit in lieu of part or all of the notice period.
There are specific legal protections against dismissal of certain categories of workers, namely workers' representatives, workers who are due to retire, parents, people with disabilities and those who are absent from work through illness.
Article 108 of the ERA-1 states that an employer who terminates an employment contract for business or incompetence reasons is obliged to give the worker a severance payment. The basis for calculating the severance payment is the average monthly wage the worker received in the three months prior to termination of the contract, or would have received if he or she had worked during those three months.
If the reason for termination of the employment contract is the unsuccessful completion of probationary work, the employee is entitled to severance pay on the same basis as a lawful termination for business reasons.
If the termination of an employment contract is for an exceptional reason at the behest of the employer, the worker is entitled to severance pay, which is determined as for a lawful termination for a business reason, and to compensation of at least the amount of pay due for the length of the notice period.
A worker is entitled to severance pay if his or her fixed-term employment contract is terminated without notice at the end of the period for which the contract was concluded, or when the agreed work is completed, or if the reason for which the contract was concluded no longer applies. A worker is not entitled to severance pay in the event of termination of a fixed-term employment contract that is concluded for the following reasons: (1) replacement of a temporarily absent worker; (2) seasonal work lasting less than three months in a calendar year; (3) performance of a public service; or (4) for inclusion in active employment policy measures in accordance with the law.
If on terminating an employment contract for a business or incompetence reason an employer offers the worker a new, unsuitable employment contract, and the worker accepts, he or she is entitled to a proportionate part of the severance pay to the extent agreed with the employer.
Workers whose contract of employment is terminated during bankruptcy, compulsory winding-up proceedings or in the event of a compulsory settlement are entitled to severance pay.
Unless otherwise stipulated by a collective agreement at branch level, an employer is obliged to give a severance payment at the termination of the contract of employment to a worker who has been employed by the employer for at least five years and is retiring, at the rate of two average monthly salaries received in Slovenia for the previous three months or at the rate of two average monthly salaries received by the worker in question during the previous three months, whichever is the more favourable to the worker.
The employment contract may be terminated by a written agreement between the contracting parties. In such an instance, the employer must explain in writing to the worker that if he or she signs the agreement as a way of terminating the employment contract, he or she will not be entitled to unemployment insurance benefits. No severance is prescribed by law.
When considering mass redundancies, an employer must create a proposal stating the criteria for determining the redundancies. In coordination with the trade union, the employer may, instead of the criteria in a collective agreement, formulate its own criteria. In any event, the following factors shall be taken into account:
- the professional training or qualifications needed for the work and any necessary additional knowledge and abilities;
- work experience;
- work performance;
- years of service;
- state of health;
- social status; and
- whether the employee is a parent of three or more minor children or the sole breadwinner of a family with minor children.
In determining the workers whose work becomes unnecessary, those who have a disadvantaged social status shall be given priority over the same criteria to retain employment.
When a large number of workers are to have their contracts terminated for business reasons, the employer has an obligation to inform and consult the trade union, to inform the Employment Service and to formulate a programme for dismissing redundant workers. Those obligations apply when, for business reasons, work will become unnecessary during a period of 30 days for (1) at least 10 workers where between 20 and 100 workers are employed, (2) at least 10 per cent of workers where between 100 and 300 workers are employed, or (3) at least 30 workers where 300 or more workers are employed.
The notice period shall be 15 days for those who have been employed with the employer for up to one year and 30 days for those who have been employed with the employer for between one and two years. The worker and the employer can agree on an appropriate cash reimbursement instead of working part or all of the notice period; this agreement must be in writing.
The employer is not obliged to offer suitable alternative employment but the option to do so exists. If the employer terminates an employment contract for business or incapability reasons and at the same time offers the worker the option to conclude a new employment contract and the worker accepts the offer, the employer must conclude the new employment contract within 15 days of the offer being accepted.
Transfer of business
Article 75 of the ERA-1 states that if a legal transfer of a company, or part of a company, carried out according to a law, another regulation, a legal transaction or a final court decision, or as a result of a merger or division that results in a change of employer, the contractual and other rights and obligations arising from the employment relationships, to which the workers were entitled on the day of the transfer, are transferred from the transferor to the transferee. The transferee must guarantee any rights and obligations arising from a collective agreement, as agreed to by the transferor, for at least one year.
The transferee employer automatically enters into a contractual relationship with the employee, thus resulting in automatic transfer of employment. If a worker refuses to transfer and perform the work for the transferee, the employment contract of the worker may be exceptionally terminated.
In many of their rulings, Slovenian courts refer to EU case law when ascertaining the criteria to be addressed to evaluate whether a legal transfer or transfer of an economic unit takes place:
In the coming year, as the economy cools, we are hoping that the epidemic will be gradually brought under control, that the number of new cases of covid-19 will be smaller with every day and businesses will be able to open again and function normally.
We expect the PDPA-2 to be adopted in 2021, which will be in line with European data protection legislation.
We further expect that issues relating to the rise of non-standard forms of work will continue to be topical. Nevertheless, we are optimistic that the legal culture of both employees and employers will also improve in this area.
1 Petra Smolnikar is an attorney at law and Tjaša Marinček is a student at Petra Smolnikar Law (Odvetništvo Petra Smolnikar).
2 Official Gazette of Republic of Slovenia, No. 21/13, with amendments (Zakon o delovnih razmerjih).
3 Official Gazette of Republic of Slovenia, No. 43/11 (Zakon o varnosti in zdravju pri delu).
4 Official Gazette of Republic of Slovenia, No. 96/12, with amendments (Zakon o pokojninskem in invalidskem zavarovanju).
5 Official Gazette of Republic of Slovenia, No. 80/10, with amendments (Zakon o urejanju trga dela).
6 Official Gazette of Republic of Slovenia, No. 40/06 (Zakon o evidencah na področju dela in socialne varnosti).
7 Official Gazette of Republic of Slovenia, No. 94/07 (Zakon o varstvu osebnih podatkov).
8 Official Gazette of Republic of Slovenia, No. 36/20, with amendments (Zakon o interventnih ukrepih na področju plač in prispevkov).
9 Official Gazette of Republic of Slovenia, No. 49/20, with amendments (Zakon o interventnih ukrepih za zajezitev epidemije Covid-19 in omilitev njenih posledic za državljane in gospodarstvo)
10 Official Gazette of Republic of Slovenia, No. 61/20 (Zakon o spremembah in dopolnitvah Zakona o interventnih ukrepih za zajezitev epidemije Covid-19 in omilitev njenih posledic za državljane in gospodarstvo).
11 Official Gazette of Republic of Slovenia, No. 98/20, with amendments (Zakon o interventnih ukrepih za omilitev in odpravo posledic epidemije Covid-19).
12 Official Gazette of Republic of Slovenia, No. 80/20, with amendments (Zakon o interventnih ukrepih za omilitev in odpravo posledic epidemije Covid-19).
13 Official Gazette of Republic of Slovenia, No. 98/20, with amendments (Zakon o interventnih ukrepih za pripravo na drugi val Covid-19).
14 Official Gazette of Republic of Slovenia, No. 98/20, with amendments (Zakon o interventnih ukrepih za omilitev in odpravo posledic epidemije Covid-19).
15 Official Gazette of Republic of Slovenia, No. 175/20 (Zakon o interventnih ukrepih za omilitev posledic drugega vala epidemije Covid-19).
17 Official Gazette of Republic of Slovenia, No. 97/07 (Obligacijski Zakonik).
18 The ERA-1 refers to the specific law regulating the acknowledgement of qualifications for the performance of regulated professions. This relates to citizens of EU Member States or EEA Member States who exercise their right to move freely within the European Union for the purpose of employment.
19 The Standard Classification of Activities is the obligatory national standard used for defining the main activity and for classifying business entities and their units for official and other administrative data collection (registers, records, databases, etc.) and for national and international statistics and analyses.
20 Official Gazette of the Republic of Slovenia, No. 21/10 (Zakon o storitvah na notranjem trgu).
21 Official Gazette of the Republic of Slovenia, No. 65/09, with amendments (Zakon o gospodarskih družbah).
22 Supreme Court of the Republic of Slovenia, Labour and Social Department (2015), VSRS Judgment VIII Ips 80/2015 of 12 May 2015.
23 Supreme Court of the Republic of Slovenia, Labour and Social Department (2012), VSRS Judgment and Conclusion VIII Ips 111/2012 of 18 September 2012.
24 Official Gazette of the Republic of Slovenia, No. 47/15 (Zakon o zaposlovanju, samozaposlovanju in delu tujcev).
25 Directive 2011/98/EU of 13 December 2011 on a single application procedure for a single permit for third-country nationals to reside and work in the territory of a Member State and on a common set of rights for third-country workers legally residing in a Member State.
26 Official Gazette of Republic of Slovenia, No. 64/18 (Zakon o starševskem varstvu in družinskih prejemkih).
27 Official Gazette of Republic of Slovenia, No. 42/07 (Zakon o sodelovanju delavcev pri upravljanju).
28 Higher Labour and Social Court of the Republic of Slovenia (2011), VDSS Judgement Pdp 188/2011 of 24 February 2006.
29 Official Gazette of Republic of Slovenia, No. 13/93 (Zakon o reprezentativnosti sindikatov).