New Employment Relationship Act

On 12 April 2013, Slovenia's new Employment Relationship Act (Zakon o delovnih razmerjih; "ERA-1") and the Act on the Amendments to the Labour Market Regulation Act (Zakon o spremembah in dopolnitvah Zakona o urejanju trga dela; "ZUTD-A") entered into force, introducing labour market reforms as a result of long-lasting negotiations among the country's social partners. The reforms aim to establish (maintain) adequate protection of workers and their employment relationships by simultaneously implementing more effective and flexible means of adapting to current market conditions (thus reducing labour market segmentation and increasing the flexibility of employment relationships).

Some of the most significant changes pertain to the following areas:

Amendments to the regime of management and middle-management

Managing employees as the sole founders of an undertaking may now be granted the status of employees - they may have social security taxes levied on them like other employees and are insured on the same basis. Middle management (leading employees) is defined as a new category under ERA-1.

Temporary agency work

Agency work shall be costlier and more restrictive. The number of workers employed through an agency (de iure employer) and actually working at the user (de facto employer) may as of 12 April 2014 not exceed 25% of the user's overall headcount (exceptions apply).

Economically dependent persons

The concept of an economically dependent person (EDP) has been established: a self-employed person performing work independently, against remuneration (at least 80% of income deriving from a single entity), personally, long-term under a civil contract, and without employing other workers. The EDP is granted employment-related protection (against proving his/her economical dependence) as to the minimum notice periods, protection against unlawful terminations, comparable salaries, assertion of damage claims, etc.

Fixed-term contracts

The conclusion of fixed-term contracts has become more restrictive: the 2-year fixed-term contract is limited to work on the same working post / for the same nature of work, which is as a fact being performed by an individual worker. The limitation can no longer be circumvented by employing another worker for actually the same work, which another worker has been performing for the 2-year period. Severance payments should be paid out after the lapse of the fixed-term period (a few exceptions apply), but not for...