Legal journal: Amendment to the Labour Code Effective from 1st August 2024

The year 2024 brings significant and extensive changes to various parts of the Act No. 311/2001 Coll. on the Labour Code, as amended (hereinafter referred to as the "Labour Code"). These changes take effect on August 1, 2024, with the exception of the amendment to recreation vouchers, which will take effect on January 1, 2025. In this article, we will discuss the amendment to Section 11 of the Labor Code, namely, the employment of persons under 18 years of age and the newly included Section 130a Payment of wages in special cases in subcontracting relationships, which governs the rights of employees to be paid wages by a service contractor. The issue of holiday vouchers is addressed in a separate article, which can be found HERE.

Change in the employment of minors - Employment of persons under the age of 18

Let's start by looking at the definition of a juvenile. A juvenile is any person between the ages of 15 and 18. Special employment legislation is needed for this age group, as the Labour Code and the entire legal system provide increased protection for juvenile employees. This protection is primarily enshrined in the Constitution of the Slovak Republic, which places emphasis on the rights and interests of young people.

Since 2002, the Labour Code has set out in Section 11(2) of the Labour Code the conditions for the performance of work by minors, by setting the age of eligibility for work at 15 years and, at the same time, the date of commencement of work could not be agreed before the completion of compulsory school attendance.

Pursuant to Section 22 of Act 245/2008 Coll. on Education and Training (Education Act), compulsory school attendance ends upon completion of 10 years of education, or on 31 August, in the year in which the person reaches the age of 16, where school attendance ends on the earlier of the above dates. It follows that a juvenile start working either:

• August 31 after the completion of the 10th year of compulsory schooling, or
• on August 31 in the year in which he or she turns 16 years of age.

This legal framework created a situation where minors who had not completed compulsory schooling and had reached the age of 15 could not start working (even under a student temporary work agreement) before 31 August of the year in question. This restriction prevented minors from being able to work during the summer after the end of the school year.

The new legislation, which comes into effect after 1 August 2024, addresses this problem. The 15-year age limit remains, but with a new provision: "the employer may not agree on a day preceding the day of the end of the school term of the last school year of compulsory school attendance of the natural person as the day of commencement of work.".

The period of schooling shall end on 30 June of the calendar year concerned. In practice, this means that minors who have completed 10 years of compulsory schooling can start work in the summer after that date. The same applies to minors who have not completed 10 years of compulsory education but have reached the age of 16. Under the new legislation, they can start work from 1 July of the year in which they reach that age.

In our view, it is important to emphasise that an employer may conclude a contract with a juvenile employee before the end of the school year. However, the date of commencement of work must be fixed for 1 July of the year in question at the earliest. Otherwise, the employment contract would be null and void.

This is a welcome improvement as it will allow teenagers to use the summer months to gain work experience and earn a living without unnecessary restrictions.

Working before the age of 15

Employment of persons under 15 years of age or persons over 15 years of age who do not meet the conditions for performing work under Section 11(2) of the Labour Code is strictly prohibited and is considered child labour. This approach is in line with international standards that seek to protect children and adolescents from abuse and adverse working conditions. Such legislative measures are put in place to ensure that children can concentrate on learning and developing their skills in a safe and supportive environment.

Exceptions and light work

However, there is an exception that remains unchanged. Persons under the age of 15 and persons over the age of 15 who do not meet the conditions under Section 11(2) of the Labour Code may only perform light work, subject to a permit from the relevant labour inspectorate.

Definition of light work

The Labour Code explicitly defines what is considered light work in Section 11(4) of the Labour Code and lists the following activities:

(a) performing or participating in cultural and artistic performances,

b) participation in sporting events,

c) carrying out advertising activities,

d) other activities not referred to in points a) to c), if the natural person concerned is over 15 years of age until the end of the period of schooling of the last school year of compulsory school attendance. These activities may vary but must be approved by the labour inspectorate and the competent public health authority.

Close

We can conclude that the changes to the legislation on employment of minors from 1 August 2024 are a positive step towards greater flexibility, as they will allow minors to start working in the summer after they leave compulsory education. These modifications open the door to gaining valuable work experience, while it is important to preserve the protection of their rights, morals and behaviour.

Employee's right to claim payment of wages due even from a service provider subcontracted by his employer Employee's right to claim payment of wages due even from a service provider subcontracted by his employer

The second significant change to the Labor Code is the introduction of a new right for employees in the construction industry to strengthen the protection of these employees from unpaid wages. This change, implemented in Labor Code Section 130a, introduces a new mechanism whereby an employee working for a subcontractor may request payment of wages directly from the construction service contractor.

This mechanism represents a significant step towards better protection of employees who are in a weaker position in subcontracting relationships. Employees in the construction sector are often at a disadvantage when their employer/subcontractor defaults, which can have serious consequences for their financial stability. The possibility to approach the service provider as a financially stronger entity provides a safety net for employees in the event of non-payment of wages.

Supplier responsibility also puts pressure on subcontractors to meet their obligations to employees, as non-performance can lead to supplier intervention and increased costs for subcontracting firms. This legal framework strengthens discipline within subcontracting relationships and creates more stable and safer working conditions for construction workers.

Certain conditions must be met in order to exercise this right. An employee can only claim payment of wages from a contractor if:

1. The subcontractor has failed to pay the wages: The employee must first prove that his direct employer, i.e. the subcontractor, has failed to pay his wages on the due date. This is a protective mechanism that ensures that the subcontractor is primarily liable, but if it fails, the employee's rights can be protected through the contractor.
2. Work performed falls within the scope of construction work: The new provision applies only to employees performing construction work. This means that the employee must perform activities falling under the category of construction work, as per the Labour Code. This does not apply to workers in other sectors or sectors similar to construction, such as design or consultancy activities.
3. In Annex 1aa, the legislator has provided a demonstrative list of construction works, which means that works other than those directly listed in the Annex may also be included in this category. The annex lists, by way of example only, the following: excavation (trenching), earthworks, assembly and dismantling of prefabricated parts, renovation works, repairs and others.
4. Payment of minimum wages: The Contractor shall pay the employee at least the minimum hourly wage in force at the time of non-payment of wages by the subcontractor. For 2024, the minimum monthly wage is set at €750 and the minimum hourly wage at €4,310. From the beginning of 2025, these values will change - the minimum monthly wage will increase to €816 and the minimum hourly wage to €4,690.
5. If the subcontractor has paid only a part of the wage that does not reach the minimum wage, the contractor is obliged to pay this amount up to the minimum wage. However, the employee shall at the same time continue to have the right to require the subcontractor to pay the remaining part of the wage.
6. Payment of net wages: The contractor pays the wages "net", which means that no deductions from wages, such as social security or health insurance contributions, are due. These obligations remain on the shoulders of the subcontractor. The contractor is therefore only responsible for paying the net wages to the employee.
7. Exercise of the right in writing and within the time limit: The employee must submit his request for payment of wages in writing within the six-month limitation period, which begins to run from the due date of the unpaid wages. If the employee misses this period, the right to claim wages from the contractor shall be extinguished. Although the Labour Code allows for a verbal request, it is strongly recommended that the request be made in writing to ensure clear documentation and to protect the employee.

Contractor's post-application obligations

After an employee submits a claim for payment of wages, the service provider has a duty to respond within 30 days. It must decide whether to pay the employee the amount claimed or to refuse the claim, either in full or in part. If all or part of the wages are not paid, the service provider must inform the employee of the reasons for the decision.

The contractor must also inform the subcontractor of the situation. Specifically, the following obligations:

• Inform the subcontractor that its employee has asserted a right to be paid wages by the contractor.
• Notify the subcontractor whether it has paid the employee the wages claimed or, if it has not paid the wages, the reasons for the non-payment.

Subcontractor's Participation

The subcontractor has a duty to the contractor to provide the necessary cooperation, in particular to provide all information and data necessary to verify the employee's claim. This includes the provision of the employee's personal data to the extent necessary. The subcontractor's obligation to provide this data without undue delay ensures that the contractor has sufficient information to assess whether the employee is entitled to wages. It is important to emphasise the protection of the employee's personal data. The subcontractor, as the employer, must not provide the contractor with all the information about the employee, but only with the personal data that is necessary for the purpose of paying the wages.

At the same time, the service provider starts processing new personal data to which it did not have access before, which represents a change in the scope of the data processed. In this context, it is important to ensure that all procedures and processes related to the processing of this new data are in full compliance with the requirements of the GDPR. The service provider must therefore take appropriate measures to protect personal data to ensure not only its security but also compliance with the legislation.

Rights of the supplier

A key right of the contractor is the ability to refuse to pay wages to a subcontractor's employee under section 130a(4) of the Labour Code if certain conditions are met.

The contractor may refuse to pay wages if when the subcontractor was selected and the legal relationship between them was established he could not have foreseen, even with the exercise of due diligence, that the subcontractor would not pay wages to its employees. However, this right is limited: the service supplier cannot avail himself of this exception if, at the date of the exercise of the right to payment of wages, he himself has not discharged his outstanding pecuniary obligation to the subcontractor arising out of their legal relationship with each other.

In order to assess whether the contractor has exercised due diligence in the selection of the subcontractor, the Labour Code sets out a number of criteria that should be met. These criteria help to ensure that the contractor has thoroughly vetted the subcontractor before the relationship is established, in particular the following circumstances:

• Reasonableness of price: The contractor should ensure that the price for the subcontractor's performance is not unreasonably low without economic justification.
• Distinction of statutory bodies: The statutory bodies or members of the subcontractor must not also be members of the statutory bodies or members of the contractor.
• History of the subcontractor: The subcontractor has not been fined in the past for illegal employment in the Slovak Republic or in the country of its domicile during the two years prior to the establishment of the legal relationship.
• Social security, tax and customs obligations: The subcontractor has no social security arrears either to the tax office or customs office in the Slovak Republic or in the country of its domicile.
• Financial stability of the subcontractor: The subcontractor is not bankrupt, the subcontractor is not in liquidation and the bankruptcy proceedings against it have not been terminated due to lack of assets.
• Business activity: The subcontractor has been in business for at least six months.

At the same time, the contractor acquires a right to compensation if the contractor complies with its obligation and pays the employee wages under Labor Code §130(a)(4), the service contractor acquires a right to seek compensation from the subcontractor for the performance provided to the employee. This right to compensation allows the contractor to seek from the subcontractor the performance it provided to the employee under this mechanism.

Conclusion

The introduction of a new right under Labor Code §130a represents a major step in the protection of employees working in the construction industry. This mechanism allows employees facing problems with non-payment of wages by a subcontractor to enforce their right directly with the contractor. Although this is an exceptional measure, it is intended to ensure that employees are not exposed to the risk of financial problems caused by the failure of their direct employers to meet their obligations. The move also contributes to greater transparency and accountability in the construction sector.