VZCZCXRO8822
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSL #0095/01 0461243
ZNR UUUUU ZZH
R 151243Z FEB 07
FM AMEMBASSY BRATISLAVA
TO RUEHC/SECSTATE WASHDC 0687
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 BRATISLAVA 000095 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ELAB PGOV LO
SUBJECT: GOS DRAFTS LABOR CODE PROPOSAL; FOREIGN INVESTORS 
WARY 
 
REF: 2006 BRATISLAVA 946 
 
¶1. (SBU) Summary. The GOS has prepared a draft labor code 
proposal, which it hopes to finalize and introduce in 
Parliament next month.  The proposal contains numerous 
pro-worker changes that domestic and foreign investors will 
fight strenuously.  While priorities different among 
employers, American investors have expressed most concern 
about provisions regarding overtime, restrictions on contract 
employment, and broadly increased union rights.  To weigh in 
on the issue, the Embassy organized a February 9 lunch 
between US companies and Minister of Labor Viera Tomanova and 
will conduct follow-up activities.  Labor code reform is a 
priority of Prime Minister Robert Fico and will almost 
certainly be enacted in some form; Embassy efforts will focus 
on removing the most potentially damaging proposed amendments. 
 
Provisions 
---------- 
 
¶2. (SBU) On February 7, the Ministry of Labor published its 
long-awaited draft labor code, giving stakeholders until 
February 28 to comment.  The draft will then be finalized and 
sent to Parliament in March.  To complicate matters, MOL only 
published key "debatable" sections; most of the 100-plus 
changes are not publicly available, but can be attained 
through friendly Ministry sources.  Most proposed amendments 
clearly favor workers and labor unions, whose influence was 
dramatically reduced in the current labor code, enacted in 
2003 (see reftel for background on Slovakia's labor code). 
Not all the changes are objectionable - many have the effect 
of harmonizing Slovak labor law with U.S. law and/or ILO 
standards.  Others harmonize Slovak law with EU directives. 
Several proposed changes extend beyond international 
commitments, however, and would limit employer flexibility or 
impose costs that concern US investors.  These amendments 
include but are not limited to: 
 
- Restrictions on Individual Contractors: Several amendments 
attempt to improve the position of contract employees, who 
enjoy few benefits or work protections.  The GOS draft 
dramatically over-corrects the problem by mandating full 
benefits for most contract employees and suggesting that all 
long-term contract employees must be converted to full 
employee status.  While there is debate among employers about 
how restrictive the language really is, service-based 
companies such as Hewlett Packard, Dell, and IBM are very 
concerned that the language significantly affects their 
ability to do business in Slovakia. 
 
- Overtime and Stand-by: Maximum allowable overtime hours per 
year are reduced from 250 to 150 per year, and hours on 
stand-by are counted as regular working hours.  The draft 
also introduces cumbersome bureaucratic procedures for 
approving overtime hours.  GOS draft language is based on EU 
directives, but the applicable directives do not mandate the 
specific language chosen by the GOS.  US Steel and 
Getrag-Ford have voiced strong objections to these amendments. 
 
- Increased Union Rights: Under the current labor code, 
employers do not have to reach binding agreements with unions 
or worker associations on anything, and no meaningful dispute 
resolution mechanisms exist. The GOS draft restores unions to 
prominence, but does so in a clumsy and unworkable manner, 
granting unions the right to "co-decide" workplace standards 
without any means of resolution when agreement is not 
reached.  Also, one provision grants workers the right to 
unilaterally shut down the workplace if safety standards are 
allegedly unmet, even before regulators can make a 
determination. 
 
- Data Privacy: Language in the preamble, loosely guided by 
EU directive, suggests that employers have no jurisdiction 
over use of phone and e-mail in the workplace. 
 
- Sick Leave: The draft would double available paid sick 
leave time. 
 
Actions and Strategies 
---------------------- 
 
¶3. (SBU) Ever since the current government assumed power in 
June 2006, the Embassy has anticipated a coming confrontation 
between employers and the GOS on the labor code.  (Note: In 
late 2006, the Embassy held a series of meetings with MOL 
officials and Smer MPs that emphasized maintaining labor code 
flexibility to hire/fire employees, and keeping the 48-hour 
work week.  Encouragingly, the labor code draft does not 
change core language on those points. End Note.)  In advance 
of MOL's release of its draft labor code, we organized the 
 
BRATISLAVA 00000095  002 OF 002 
 
 
February 9 lunch at the Ambassador's residence between 
Minister Tomanova and key AmCham member companies, including 
US Steel, Hewlett Packard, Dell, Getrag Ford, AT&T, and IBM. 
The meeting was cordial, but did not dig deeply into problem 
issues.  US companies are now busy drafting their comments to 
MOL in advance of the February 28 deadline. 
 
¶4. (SBU) During the next two weeks the Embassy will meet with 
key MOL officials and Smer MPs to encourage them to remove 
the most problematic sections of the draft law before it is 
officially introduced in March.  Since we expect that results 
from these efforts will be limited, the Embassy will also 
engage HZDS, encouraging them to press their coalition 
partners to maintain a flexible labor code -- both before and 
after the legislation is introduced in Parliament. 
Parliamentary committees meet on the week of March 13 and the 
next full session begins March 20.  PM Fico has set a goal 
for Parliament to pass a new labor code during this session, 
so time is of the essence. 
 
VALLEE