LABOR AND EMPLOYMENT DESK BOOK. SLOVENIA Odvetniki Selih & Partnerji, O.P., D.N.O.

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1 LABOR AND EMPLOYMENT DESK BOOK SLOVENIA Odvetniki Selih & Partnerji, O.P., D.N.O. CONTACT INFORMATION Bostjan Kavsek Odvetniki Selih & partnerji, o.p., d.n.o Do you have a plant closing law in your jurisdiction and if so, what does it require? (For U.S. jurisdictions, please answer: Is there a Baby WARN Act in your state and if so, what does it require?) Under Slovene law, there are no special legal provisions to be specifically taken into account in case of a plant closing. The Slovene Employment Relationship Act (hereinafter the ERA) generally provides possibility for the employer to terminate the employment contracts due to business reasons (economic, organizational, technological, structural, or similar reasons). Closing of a plant may, therefore, fall under the business reasons and be as such a valid reason for termination of employment contract (dismissal). The ERA further provides minimum notice periods and minimum amounts of severance payment that shall be paid to the dismissed employees (depending on the years of service with the employer or its legal predecessors). The applicable collective agreements and/or employment contracts may set higher standards. Also, the ERA determines certain categories of employees that are protected against dismissals (termination of employment contract due to business reasons) such as employee representatives, disabled, parents (during pregnancy, during and 30 days after expiry of parental/maternal leave, during breastfeeding), elder employees, employees during the trial period or employees during apprenticeship. Note that additional provisions of the ERA regulating dismissals to a large number of employee shall be applied when the following number of employees will become redundant within a period of 30 days (the number varies depending on the size of the employer - legal entity):

2 Number of Employees Size of employer (number of employees employed with the employer) 10 or more employ employees 10% of employees or more employees 30 or more employees 300 or more employees The threshold is met also by the employer (irrespective of its size) who establishes that due to business reasons, within a period of three months, the work of 20 or more employees will become redundant. During the terminations proceedings, the employer shall inform/consult the employee representatives operative within the employer (the trade unions and/or the works council). Finally, it should be noted that provisions regulation termination of employment contract due to business reasons shall be applicable also in case of closing of a legal entity. In case of closing of a legal entity, the protected categories of employees (listed above) do not enjoy protection against dismissals. In other words, in case termination of employment contract is based upon initiation of the procedure for closing of the employer, the affected employees would not enjoy any special protections). It should be, however, noted that also in case of closing a legal entity parents may be dismissed only with a prior consent issued by the labor inspectorate. In case the termination of employment contract is served within the entity closing proceedings, the notice period is (irrespective of the years of service) 30 days. 2. Are there special rules on releases/waivers in your jurisdiction? There are no special rules on releases/waivers applicable in Slovenia. General approach of Slovene courts in employment related matters is that the employees can hardly waive any rights granted to them under the applicable legislation. Based on the given general approach, waiver is possible only in case the applicable legislation explicitly allows the employee to waive certain rights (e.g. in case of forced settlement, the employer and the employee may agree on manner and form of severance pay, or its decrease, if payment of the severance pay would jeopardize existence of work of higher number of employee employed with the employer). 3. What are the equal employment opportunity/ non-discrimination categories in your jurisdiction (For U.S. jurisdictions, please answer: Are there protected categories beyond Title VII in your state?) Applicable Slovene legislation contains provisions prohibiting different types of discrimination before, during and after completion of the employment relationship. The applicable provisions are contained in the Slovene constitution, the ERA, the Implementation of the Principle of Equal Treatment Act, and the Equal Opportunities for Woman and Men Act. The Slovene legislation in this field represents transposition of the relevant EU directives in the field of prevention of discrimination and equal treatment. Among others, the ERA explicitly provides that the employer shall assure equal treatment of the job seekers (applicants) in gaining employment or the employee during the employment relationship and

3 in relation to the termination of an employment contract irrespective of their nationality, race or ethical origin, national or social origin, sex, colour of skin, health conditions, disability, religious or believes, age, sexual orientation, family status, membership in a trade union, financial situation or other personal circumstances in accordance with the ERA, the Implementation of the Principle of Equal Treatment Act, and the Equal Opportunities for Woman and Men Act. Also, the ERA determines certain categories of employees that are protected against dismissals (termination of employment contract due to business reasons) such as employee representatives, disabled, parents (during pregnancy, during and 30 days after expiry of parental/maternal leave, during breastfeeding), elder employees, employees during the trial period or employees during apprenticeship. Finally, the ERA provides that certain categories of employee shall enjoy special protection due to their status including special provisions on: protection of women, protection of employees due to pregnancy and parenthood, protection of employees being less than 18 years old, protection of disabled employee, protection of elder employees. 4. What are the minimum wage and overtime rules (and exemptions) in your jurisdiction? The minimum wage is determined by the Minimum Wage Act; the minimum wage may be increased yearly (as from 1st of August) by the Ministry of the Labor. The last minimum wage (applicable as from 1st of August 2008) amounts to EUR The ERA provides several provisions regulating overtime work. The provision on overtime work contained in the ERA may be disregarded in relation to statutory representatives, procuratos and senior (leading) employees as determined by the ERA. Under the Slovene law, the normal (regular) weekly full working time may not exceed 40 hours (in case of uneven distribution of working time, it may not exceed 56 hours per week provided that in a 6/12 months calculation period the weekly working time in average does not exceed 40 hours). The working time exceeding normal (regular) weekly working time, shall be considered overtime work. Upon the employer's request, the worker shall be obliged to perform work exceeding full working time (overtime work): a) in cases of an exceptionally increased amount of work b) if continuation of work and production process is required in order to prevent material damage or threat to the life and health of people c) if this is necessary to avert damage to work equipment that would otherwise result in suspension of work d) if this is necessary in order to ensure the safety of people and property and the safety of traffic, or e) in other exceptional, urgent and unforeseen cases provided by the law or by the branch collective agreement.

4 The employer must order overtime work in writing, as a rule, prior to the commencement of the work. Should it not be possible, due to the nature of the work or urgency of overtime work, to order the overtime work in writing prior to the commencement of the work, the overtime work may also be ordered orally. In such a case, the written order shall be handed over to the worker subsequently, but no later than by the end of the working week after the completion of the overtime work. Overtime work may not exceed eight hours a week, 20 hours a month and 170 hours a year. A working day may not exceed ten hours. Daily, weekly and monthly time limitation may be regarded as an average limitation over the period stipulated by the law or a collective agreement and may not exceed six months. The maximum amount of overtime work may be extended by an employee's consent from 170 hours to 230 hours per year. Overtime work may not be imposed if the work can be performed within full working hours by means of the appropriate organisation and distribution of work, distribution of working time, introduction of new shifts, or employment of new workers. An employer may not impose overtime work to certain categories of employees (employees during pregnancy and paternal leave, elder employees, younger employees (less than 18) etc.). 5. Is there employment-at-will, or some other rule, in your jurisdiction? What are the exceptions? Under Slovene law, there are no special rules corresponding to the institution of "employment-at-will" as recognized by a doctrine of American law. The employer may (ordinarily/extraordinarily) terminate the employment contract only in case of grounded reasons. In case of ordinary termination of employment contract, the employer shall also respect the prescribed minimum notice periods (that may be extended by a contract). The employee may terminate the employment contract without stating any reasons at any time (the employee, however, needs to respect the notice period determined by law or agreed in the employment contract). 6. What are the legal obligations upon terminating an employee in your jurisdiction? In case of termination of the employment contract by the employer, several legal obligations as determined by ERA have to be fulfilled. In case of ordinary termination of employment contract, the employer shall fulfil, among others, the following obligations: a) written notice - by termination of the employment contract due to fault reason, the employer is obliged to send a notice to employee and ask him/her to fulfil working obligations and inform employee on possibility of termination of the employment contract in case of a new breach; by termination of the employment contract due to business reasons, the employer shall inform the employee (in written from) about the intended termination of the employment contract b) defence - by termination of the employment contract due to reason of incapacity or fault reason or by extraordinary termination of the employment contract, the employee has the right to defence

5 c) informing the trade union - upon request of the employee, the employer must inform the trade union about the intended termination of the employment contract d) written form of the termination of employment - the termination letter has to explain justified and serious reason for the termination of the employment contract and inform the employee about his/her rights from unemployment insurance e) termination of the employment contract shall be delivered personally to employee. The employer shall also respect various statutory periods for performance of the required actions. Furthermore, in case of termination due to business reason and incapacity reason, the employer shall check if the employee can be re-employed within the company, under the changed conditions, or if employee can be trained or re-qualified for another work. The employer shall also respect minimum notice periods as determined with ERA, and in cases as determined by ERA also pay the severance payment to the employee. The ERA provides additional obligations in case of termination of employment contracts to a large number of employees such as: obligation of informing and consultation of trade unions, informing the Employment Service Office, preparation of programme for determining the redundant employees, etc. 7. Are there any family and/or medical leave laws in your jurisdiction, and if so, what do they require? (For U.S. jurisdictions, please answer: Are there family and/or medical leave laws in your state beyond FMLA and if so, what do they require?) The family leave is in Slovenia governed by Parental Protection and Family Benefit Act. It regulates social insurance for the rights deriving from the parenthood and various family benefits. The social insurance rights deriving from the parenthood are: a) the right to parental leave (maternity leave, paternal leave for fathers, leave for nursing and care of children, leave for adopted children) b) the right to compensation payment during parental leave c) the right to work part time and the right to payment of social security contributions for and due to parenthood. Mothers are entitled to the maternity leave in the length of 1 year ( days) including full compensation of salary payment. Fathers are entitled to 90 days of parental leave (they are entitled to full compensation of salary payment only for the first 15 days of parental leave). The second part of the maternity leave (260 days) may be taken (upon the choice of the parents) also by the father. As already mentioned under p.3, the ERA provides special protection from dismissals for parents (during pregnancy, during and 30 days after expiry of parental/maternal leave, during breastfeeding). In addition, the ERA provides also further provisions on special protection of the employees due to pregnancy and parenthood. According to the ERA, the employee shall be entitled to absence from work in cases of a temporary incapacity for work due to a disease or injury (related or not related to work) and in

6 other justified cases in accordance with the regulations in the field of health insurance. The more detailed provisions related to the medical leave are provided in the Health Care and Health Insurance Act. The employee is entitled to receive compensation of salary for absence from work. The basis for calculation of compensation is the average basic monthly salary of the employee in the year before the year, in which the temporary absence from work due to health reasons occurred. The amount of compensation (80%, 90%, or 100% of the calculation basis) is depended upon the reasons for temporary absence from work (occupational disease, non-occupational disease, injury at work, injury out of work, etc.). Generally, the compensation for the first 30 days of absence from work shall be covered by the employer, and after expiry of this period, the compensation for absence from work shall be covered by the Health Insurance Institute of Slovenia (from the obligatory health insurance). There are some exceptions to this general rule (e.g. the employer shall cover the compensation for the entire period of the medical leave in case the absence from work is related to the employee s work performed with the employer). 8. Please list any miscellaneous, interesting or oddball laws in your jurisdiction, and state under what circumstances they pertain. 9. Does your jurisdiction have a law requiring employers to give employees access to, or a copy of, their personnel records? The Slovene Personal Data Protection Act contains a detailed set of rules regulating employees rights to access to, or a copy of, their personal records. Also, on the request of an individual to whom personal data relate, the data controller must supplement, correct, block or erase personal data which the individual proves as being incomplete, inaccurate or not up to date, or that they were collected or processed contrary to the applicable law. Finally, the Data Protection Act regulates also the judicial protection of these rights (including the right to request issuance of a temporary injunction). 10. Does your jurisdiction outlaw or restrict drug tests, alcohol tests, genetic tests or any other kind of testing? Under the publicly available case law of the labour courts and the Information Commissioner (competent to supervise implementation of the Data Protection Act), the employer has a right/obligation to carry out an alcohol test in case of a suspicious that the employee is under influence of alcohol; it is a generally accepted fact that alcohol at work influences cognitive abilities of employees. The drug test may be performed only if the employee consents thereto. In case the employee rejects performance of the drug test, the employer shall use other means to prove that the employee was under the influence of alcohol (e.g. with testimonies of witnesses). 11. Does your jurisdiction have any special rules on the payment of sales commissions? The currently applicable employment legislation in Slovenia does not contain any special rules regarding sales commissions. However, apart from the fixed amount of the gross basic

7 salary, the employer and employee may agree in the employment contract also on variable part of the salary, which can be depended on the individual performance of the employee. It should be noted that in case contractual parties conclude a civil law commercial agency contract under (i.e. a contract made between the agent and the principal, in accordance with the Council Directive of 18 December 1986 on the coordination of the laws of the Member State relating to self-employed commercial agents as transposed into the Slovene legislation with the Code of Obligations) the agent is entitled to a commission for each of the concluded contract. It shall be pointed out that in such a case the agent is performing its activities in a self-employed status; therefore, the parties are not being in an employment relationship, as determined in accordance with the ERA. 12. What are the basic rules on enforcing non-competes and related agreements in your jurisdiction? According to the ERA, there are two types of non-compete clauses: a) the prohibition of competition as statutory prohibition of competitive activities applicable (only) during the employment relationship. According to the ERA, the employee shall pay compensation for damages to the employer incurring due to a breach of prohibition of competition. b) the non-competition clause as contractually agreed prohibition of competitive activities applicable (only) after the termination of the employment relationship. The noncompetition clause must be concluded in a written form. The non-competition clause may be agreed for a maximum period of 2 years after the termination of the employment relationship. The contractually agreed non-competition clause shall determine also the amount of compensation for respecting the non-competition clause. The minimum monthly amount of compensation is 1/3 of the average monthly salary the employee received in the last three months before termination of the employment relationship. The non-competition clause is not valid in case it is not agreed in writing or in case the compensation for respecting the non-competition clause is not determined. The employee and employer may mutually agree on termination of the non-competitive clause. The non-competition clause may be invoked only in case the employment contract is terminated due to the employee s fault or upon his/her will. If the employee terminates the employment contract because of the employer s gross violation of statutory or contractual obligations deriving from the employment contract, the non-competition clause may be annulled in case the employee declares to the employer within the period of one month that he/she is not bound by the competition clause anymore. In addition to the non-compete clauses as determined by the ERA, the Slovene Commercial Companies Act contains a provision on prohibition of competition for the statutory representatives of the company during their term of office in the company. If so determined by the company s articles of association, such prohibition of competition may be applicable also after expiry of their appointment (up to two years, in case of early recall up to 6 months).