Despite what people think, the law allows you to tell anyone how much you earn, expert says
Artificial intelligence prompts the question of who will be liable when things go wrong, says expert.
While Slovakia did not adopt any material changes to the Labour Code over the last year, quite a few interesting changes are coming within the next few years, as Slovakia is due to transpose several European Union directives. These will address the gender balance on company boards, the gender pay gap, and platform work, just to mention a few.
“In the transposition of European legislation, it looks like quite a whirlwind is ahead of us,” Katarína Matulníková, managing partner at the office of law firm Wolf Theiss in Bratislava, told The Slovak Spectator. She added that the next two years will be particularly interesting in Slovakia in terms of labour legislation.
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Have any new significant laws or changes in labour legislation been adopted in Slovakia over the last year?
With respect to the Labour Code, the most significant changes relate to wage surcharges for work on Saturdays and Sundays, night work and passive on-call. Some changes to the Labour Code were driven by changes in other or new laws, such as the Act on Conversions of Companies and Cooperatives.
The upcoming changes are much more interesting. There are several EU directives awaiting transposition into Slovak legislation.
Can you specify them?
One of them is the so-called Women on Boards Directive – a directive intended to improve the gender balance among directors of listed companies and related measures – that is due to be transposed by the end of this year. It aims to achieve a more balanced representation of women and men among the directors of listed companies, so that at least 40 percent of non-executive director posts or 33 percent of all executive posts are filled by the under-represented sex. However, this will affect very few companies in Slovakia, as it will only apply to listed companies.
Then there is the Gender Pay Gap directive. According to Eurostat, there is a gender pay gap of about 18 percent in Slovakia. This is irrespective of whether we’re talking about full-time or part-time arrangements.
Do you expect that this legislation will bring changes?
I am positive. In terms of the gender pay gap, large employers will have to make the information as to whether there is a pay gap between its employees available to a designated national authority. If there is a pay gap exceeding 5 percent and such a pay gap cannot be justified by objective and gender-neutral criteria, they will have to take action. There will be a much stronger emphasis on transparency.
In Slovakia, it is generally considered impolite to ask somebody how much they earn and some companies even prohibit workers from disclosing their wages.
The Labour Code states very clearly that an employer may not bind an employee to confidentiality obligations regarding their working and wage conditions. Such a provision is null and void and employees cannot be penalised in any way if they speak about how much they earn. Unfortunately, a lot of employees still don’t seem to know that.
Are there any other directives Slovakia will have to transpose?
Yes, the directive about minimum wages and platform work. The latter aims to improve the conditions of people working in the gig economy, i.e. via various online platforms. In Slovakia, probably the best-known examples of this are Bolt and Wolt.
In 2022, 28 million people in the EU engaged in platform work and expectations for 2025 are that this will rise to 43 million people. There are approximately 500 digital work platforms operating in the EU, and there is no EU country where platform work does not exist. Between 2016 and 2020, revenues in the platform economy increased from €3 billion to €14 billion. All these data are available here: EU rules on platform work - Consilium (europa.eu). Platform work is a rapidly growing sector. Those working for the platforms, including taxi drivers, domestic workers and food delivery drivers, are usually self-employed. Nevertheless, a number of them still have to abide by many of the same rules and restrictions as employees, i.e. traditionally/formally employed workers. This directive specifies under which conditions platform workers actually become employees with the corresponding level of protection.
Self-employment already resonates in Slovakia, as Labour Minister Erik Tomáš wants to address the issue of so-called forced self-employment, i.e. cases in which people work as self-employed but the character of their work fulfils the definition of dependent work.
I do not have any further information other than what has been reported in the media. I understand that the minister wishes to impose stricter penalties in cases of disguised employment relationships, where workers technically meet the definition of dependent work, but still work as self-employed. I assume that this will be achieved by strengthening the powers of labour inspectorates or increasing the sanctions.
The effort of the ministry is understandable, but the issue is far more complex. In some sectors or cases, the concern that individuals are pushed into self-employed status to get work and then stay out of the protection granted to them by employment law is legitimate. But there are sectors in which it is notoriously difficult to find somebody willing to work as an employee. For example, IT programmers prefer to be self-employed. They want to work for several clients simultaneously and do not want to be tied to a single location and in many cases want to work from abroad. The nature of their profession allows for a certain level of independence. Marketing is another sector where engaging the self-employed is prevalent.
I also wonder whether the tighter scrutiny will have an impact on the inflow of foreign workers from countries outside the EU. It is more convenient for them to apply for a work permit in Slovakia to conduct business activity than to carry out dependent work (work as employees). We should keep in mind that Slovakia needs a labour force.
Some employers already claim that the protection of workers in Slovakia is too high.
Given that a worker’s position is generally weaker than that of an employer, the increased protection of employees is justified. What I have observed throughout over a decade of practising employment law is that the enforceability of employer protection is extremely low and that the courts are generally very pro-employee oriented. Quite frequently, they tend to side with the employee, even though it does not seem reasonable.
How do you perceive the trade unions’ efforts to change the Labour Code? For example, they are demanding an increase in the protection of members of trade union bodies in companies.
I don’t really understand this requirement. It is now impossible to dismiss a trade union official without the consent of a trade union. In most cases, a union will not grant consent, in which case a termination is null and void until the court decides the employer cannot be reasonably expected to employ that union member. This protection goes over and above that of an ordinary employee. If the union officials argues that they are subject to a lengthy court proceeding, this is exactly the case of any ordinary employee suing the employer, too. If the length of the proceedings is the reason for the increased protection of the trade union officials, this argument does not hold water for me.
I see no reason why trade union officials can’t be made redundant if the work they do is no longer needed by their employer. It is for the court to examine whether the employer was acting in bad faith or the termination reason was legitimate.
Is Slovak labour legislation prepared for atypical forms of employment?
The Slovak labour legislation already stipulates conditions for various atypical and flexible forms of employment, but they are not used in practice. We have a job sharing and regular part-time work, but only about 3 percent of the workforce in Slovakia actually works part-time (excluding workers working via agreements outside employment). This is due to the simple fact that shorter working time also means a lower salary. Also, it seems that employers prefer traditional full-time employment.
What about the four-day working week?
Well, the information that Slovakia might be testing a four-day working week made it to the news early this year. The information on how exactly this should be tested has not made it to the news yet. There was a draft amendment to the Labour Code submitted to the Slovak Parliament by a group of MPs and this proposal attempts to squeeze 40 work hours into four work days. Thanks to the use of technology, we now work more efficiently and cutting work hours seems attractive. After all, the signatories of the European Social Charter committed themselves to provide for working hours to be reduced and the last adjustment to the weekly time was long ago. So perhaps it is time to revisit this again.
What impact do you expect artificial intelligence to have on labour relations?
Artificial intelligence already is a very good work tool and will be an even better one. It is already regularly used in recruitment, for example. It will certainly have an impact on the performance of some tasks as people will be able to fulfil them better and faster. Some tasks will be done by AI only.
On the other hand, it will be interesting to see how we will handle liability claims when AI does something wrong / makes a mistake and the retained level of human oversight over AI’s performance.
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