Expiry of anti-crisis labour-code reforms

2012-01-02



Several temporary reforms of labour laws designed to protect jobs during the downturn expired on 31 December, after being in force for nearly two and a half years. Most business groups would like them to be made permanent, though with some modifications and additions. The government is yet to reveal its thinking on the issue. In the meantime, previous Labour Code regulations resumed effect.
Two changes were particularly important, applying to all companies regardless of financial condition. One enabled businesses to balance their employees’ weekly working hours over one year instead of four months, thus allowing them to adjust output more flexibly to the level of orders without the need to pay overtime rates. It was highly popular: according to data from the State Labour Inspection (PIP), some 700,000 workers were covered by the new rules, i.e. twice the number predicted by the government, at a total of 1,060 companies, mainly from the manufacturing and construction sectors.
The other major change, urged by the unions, set a cap of two years for the maximum combined duration of definite-term contracts with a given employee (The Labour Code sets no such cap, but stipulates that a company may sign not more than two consecutive definite-term contracts with a given employee, which must then be replaced by an indefinite-term contract).
There were also various forms of financial assistance made available for companies badly hit by the crisis, but their popularity was much lower, with onerous procedures often cited as a major reason.