What should be considered in determining workers’ seniority bonuses?
Article 129 of the
Slovene Employment Relationship Act (Zakon
o delovnih razmerjih, ERA-1) provides that a worker is entitled to a seniority
bonus, the amount of which is determined in a branch collective agreement (“BCA”).
Pursuant to Article 222 of the ERA-1 workers who had the right to a seniority
bonus (of at least 0.5 % of their basic salary for every full year of service) when
ERA-1 entered into force, shall retain such bonus, unless provided otherwise in
the BCA. Based on the grammatical interpretation, these ERA-1 provisions could
be interpreted to mean that the BCA may lay down a different amount for seniority
bonuses or that only the length of service with the latest employer (and not
all previous employers) is to be considered.
In its legal opinion
no. 1001-381/2018-2 (which was supported by the Association of Employers of
Slovenia), the Ministry for Family, Work, Social Affairs and Equal Opportunities
(“Ministry”) has corroborated the grammatical interpretation, in accordance
with which the issue of the length of service (considered when calculating the seniority
bonuses amount) may be regulated in the BCA in a less favourable way for
workers. This opinion was a result of the negotiation process concerning the
last reform of the labour market regulations, during which the ERA-1 was also amended.
It was agreed during the negotiations that the amendments to the ERA-1
provisions shall also include amendments with respect to which service is to be
considered when determining the seniority bonus. The Ministry also discovered
that many collective agreements have used this possibility, meaning that also the
trade unions were undoubtedly aware of the legislator’s intentions.
The legal opinion
described above contradicts recent case-law of the Higher Labour and Social
Court of Slovenia (“VDSS”), which has taken the position in two decisions (cases
nos. Pdp 916/2017 and Pdp 935/2017) that the BCA may determine lower seniority
bonuses, but it may not determine a shorter length of service on the basis of which
a worker’s seniority bonus is calculated. The court based its decision on the idea
that if the legislator indeed only meant to consider the worker’s length of
service with his last employer, the provisions would explicitly and
unambiguously state this. According to the VDSS, employers should consider the
working period of the worker with all the previous employers, despite the potentially
different provisions in the BCA.
An application for
the judicial review has been filed against the VDSS judgment in the case no.
Pdp 916/2017. The Supreme Court of Slovenia issued a decision no. VIII DoR 56/2018
granting leave to the judicial review regarding the question of whether the
first paragraph of Article 129 of the ERA-1 should be interpreted as to entitle
workers to seniority bonuses for the entire length of service or as to allow
the BCA to determine this right in a way that is less favourable for the workers.
The court has not yet decided
on the judicial review; however, we are awaiting the decision with great
interest as it will presumably offer a more specific answer regarding this issue
and offer a clear position on which opinion should be followed, that of the
VDSS or the one of the Ministry.
