Practice Area Articles
January 16, 2023
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KEY DEVELOPMENTS FOR 2023
Changes of the Employment Relationships Act and the Health Care and Health Insurance Act
In the beginning of 2022, the parliament of Slovenia adopted the changes of the Employment Relationships Act and the Health Care and Health Insurance Act, by which employers have to pay wage compensation from their own resources in cases of an employee’s inability to work due to illness or injury not related to work for a period of up to 20 working days for individual absence from work but for no more than 80 working days in a calendar year. A change from 30 and 120 days from before.
The change employers, self-employed, farmers and the rest were lobbying for should have an impact on the rights of self-employed persons, the financial burden of the companies will lessen and their market position should be improved. The changes are supposed to better the health of all the workers in general as they will be more likely to go on sick leave when needed.
Remuneration for business performance
There has been a change to the legislature regarding the remuneration for business performance (also called “Christmas bonus” or “the 13.salary”) as it now does not have to be paid to all the employees (simultaneously) in order to avoid taxation and the burden of social contributions. The subject of change was also the amount of the such remuneration as now the preferential treatment is also applied to 100 % of the average monthly pay of the last 12 months of the employee wage (including wage compensation) if this is better for the worker than 100 % of the average monthly pay in Slovenia.
The employees will benefit by potentially receiving a higher amount of remuneration for business performance if they will be eligible for it and the employers will have a less costly option to award the employees holding higher paying jobs. The employers should note that they still have to set the criteria for such payment in a general act or their collective bargaining agreement.
Amendment of the Labour and Social Security Registers Act
An important amendment of the Labour and Social Security Registers Act is planned for 2023, as changes to the 15-year-old act are much needed due to the modernisation of employment relationships. The fact is that the majority of violations discovered by the labour inspectorate are in connection with the records of working time and that “official” records presented by the employers do not represent the actual work performed by the employees and their work performed in less favourable circumstances such as overtime, night work etc. The new legislation is supposed to change that by implementation of electronic worktime records.
By implementing the change regarding the electronic worktime records, which could not be altered without a record of the change, most of the violations regarding working time would be deterred.
Due to the prevalence of violations regarding working time, many employers will have to change their practices and rethink the value of work.
KEY DEVELOPMENTS FOR 2022
New rules regarding pay for certain absences from work
Typically, remuneration for business performance (also known as the “Christmas bonus” or “the 13th salary”) as a component of salary is usually paid to employees at the end of the year or at the beginning of a new year. As the payment of this remuneration is not obligatory, employers usually set the criteria for such payment in a general act.
The Advocate of the Principle of Equity recently issued a decision confirming that it is discriminatory for employees to receive lower remuneration for certain absences from work (for example, absences due to sick leave, maternity / paternity leave). The stated decision was also confirmed by the Administrative Court of Republic of Slovenia. It is expected that the decision of the Supreme Court will be adopted shortly.
Therefore, employers who adopt a general act setting out the criteria for payment of remuneration for business performance should note that there is a possibility that the Advocate of the Principle of Equity will start a procedure against them, based on Protection Against Discrimination Act.
Changes to the tax treatment of expenses relating to employment
Under Slovenian legislation, most income is subject to taxation and payment of social contributions. There are some exceptions to this rule, for example reimbursement of expenses relating to employment. In 2021 the Decree on the tax treatment of reimbursement of costs and other income from employment was changed twice within a period of two weeks. Previously, the amount of expenses that were not subject to taxation were calculated based on the cost of the cheapest public transportation. However, now that amount is calculated based on the distance (in kilometres) between the employee’s residence and place of work (at 0.18 EUR per km).
Employers should note that the right to reimbursement of expenses for travel to and from work is regulated in collective agreements or the general acts of the employer. The new Decree does not change the legal basis for remuneration of travel expenses, but only changes the way it is taxed.
Employers are now required to verify that all employees have met the “PCT condition” before carrying out work
The Slovenian Government has adopted the Ordinance on the method of meeting the condition of morbidity, vaccination and testing to curb the spread of SARS-CoV-2 virus infections, pursuant to which all employees now have to meet the “PCT condition”. The "PCT condition" provides that employees can perform work if they have recovered after COVID-19, are vaccinated or have been tested. In September 2021, a change of the Ordinance was adopted pursuant to which the Government had set more drastic conditions for performing work in state administration but the Constitutional court suspended the execution of this change in September.
Employers must ensure that all employees meet the “PCT condition”. At this stage it is unclear what action employers can take if employees are not willing to comply with the PCT condition. We have seen employers starting to dismiss employees and citing reasons of misconduct but there is no case law regarding whether non-compliance with the PCT condition is a legitimate reason for termination of employment so companies should monitor the law in this area.
KEY DEVELOPMENTS FOR 2021
Increase in COVID‑19‑related employment litigation
In order to prevent and mitigate the consequences of COVID‑19 for citizens and the economy, several Acts were adopted by the Government in 2020. A number of measures had an impact in the field of labour law, giving employers both financial aid as well as some obligations. Due to the ambiguity of the intervention legislation, an increase number of labour claims are expected in the future, as well as claims of the Government toward employers who were entitled to financial aid.
Recent case law in relation to fixed‑term and indefinite‑term employment contracts
Although case law is not an official source of law in Slovenia, it has to be taken into account as it often represents an interpretation of otherwise dubious legislative stipulations. In 2020, the Supreme Court passed an important decision (ref. nr. VIII Ips 91/2019) regarding the provision of the Employment Relationship Act (ERA‑1) regulating the suspension of rights and obligation arising from an employment contract concluded for an indefinite duration in cases when an employment contract for a definite period is concluded with the same employer afterwards (for example, an employee employed for an indefinite period concludes an employment contract for a definite period for the period of performing duties of a managing director). The Supreme Court decided that the employer and employee are unable to agree upon termination of the previous employment contract (for an indefinite period) with the newly concluded employment contract for definite period.
Supreme Court decisions regarding the use of redundancy criteria for individual redundancies
Two decisions (ref. nr. VIII Ips 63/2019 and VIII Ips 70/2019) of the Supreme Court were also passed regarding individual redundancies (less than 10 employees) and the use of criteria for the determination of redundant workers. The Supreme Court decided that an employer is not obligated to use criteria for determination of redundant workers (provided that nothing to the contrary is contained in a collective agreement or that the employer is obligated to use them in accordance with a general act of the employer) in case of an individual redundancy. However, the employer is still obligated to comply with the prohibition of discrimination.
KEY DEVELOPMENTS FOR 2020
Recent case law in relation to the payment of Wage Compensation
In a recent judgment regarding the payment of wage compensation, the Supreme Court held that employees are only entitled to wage compensation if they are absent from work for one of the reasons stipulated in the legislation, and not if there is an unjustified absence from work and the employee has not provided a reason for it.
Another important judgment issued by the Supreme Court in relation to annual leave provides that employees may have the right to be compensated for untaken annual leave, even though Article 164 of the Employment Relationships Act stipulates that compensation for unused annual leave will only be valid if concluded at the time of termination of the employment relationship.
In another case, the Supreme Court has also held that overtime pay is the sum of 'regular' pay and additional pay, with the latter being calculated on the basis of basic salary only.
Justified absence to accompany a child on their first day of school
An amendment to the Employment Relationships Act has recently been passed, which gives employees the right to paid absence from work, in order to accompany their child (provided that the child is under the age of 12) on the child's first day of school.
KEY DEVELOPMENTS FOR 2019
Key case law developments regarding wage compensation
The Court of second instance issued a judgment in 2018, where it held that an employee is entitled to be paid, even if the employee is absent from work and did not inform the employer of the reasons for his/her absence. This decision departed from previous case law. The Supreme Court will decide whether an employer is obligated to pay the salary in such case and this decision will probably be made in 2019.
Key case law developments regarding protection of worker representatives
Another important judgment was issued by the Supreme Court in September of 2018 regarding special protection of worker representatives. The judgment states that the worker representatives are not only protected against termination of the employment relationship, but the protection also refers to termination of the employment contract with the offer of a new contract.
KEY DEVELOPMENTS FOR 2018
Data Protection Act
The new Personal Data Protection Act, which implements the EU General Data Protection Regulation, will impact how employers gather and store data on employees.
Act on Cross-Border Performing of Services
The Act on Cross-border services came in to force on 1 January 2018. The Act governs the conditions under which legal entities registered in Slovenia are allowed to temporarily render services in another EU member state and vice versa.
Case Law Updates
In 2017 the Constitutional Court of Slovenia passed an important decision regarding the way employers have to serve a termination letter to the employees in order for it to have effect. The Supreme Court also issued 2 decisions regarding redundancies, stating that all employees, whose work under the current employment contract will no longer be needed (even those who are offered a new one together with the cancellation of the employment contract), have to be taken into account when determining the redundancy process required and when selecting employees for redundancy.