Amendment to the Labour Code (part 1): at least 160 hours of vacations for all
An extensive amendment to the Labour Code has been on the deputies’ agenda since January. In the upcoming issues of Tax and Legal Update, we will summarise for you the amendment’s major changes. In the first of a series of articles, we will look into perhaps the most important change, as it concerns the calculation of vacations. Starting 2021, vacations should be calculated based on hours rather than days worked, which is the case now.
The current legal regulation under which vacations are calculated based on days worked is not always fair. For instance, an employee having worked ten hours in a week, distributed into four days will have worked more days for the purposes of calculating vacation entitlement than an employee working 24 hours in two twelve-hour shifts. Calculating vacations based on days is also unsuitable for employees who work shifts of uneven length – an employee always needs to take one day of vacations, regardless of whether they would have worked a 6-hour, 8-hour or 12-hour shift on that day – and this can make a huge difference, both for the employee and the employer.
The proposed concept keeps the basic length of vacations at four weeks. However, vacation entitlements will no longer be calculated based on days worked but based on an employee’s weekly working hours. The number of hours of annual vacation entitlement will therefore reflect the number of hours the employee has actually worked.
The entitlement to an annual vacation shall arise for an employee who, during the continuous existence of employment with the same employer, has worked for 52 weeks in a calendar year for the stipulated weekly hours or agreed-upon shorter weekly hours, calculated as an average for each of the 52 weeks (for instance, 40 hours a week). The length of the annual vacation shall thus equal the specific employee’s weekly working hours multiplied by the number of weeks of their vacation entitlement. In practice, this means that an employee working 40 hours a week entitled to 5 weeks of vacation will have an annual vacation entitlement in the scope of 200 hours (40 hours x 5 weeks).
An employee not entitled to an annual vacation but during the continuous existence of employment with the same employer having worked for at least four weeks for the stipulated weekly hours or agreed-upon shorter weekly hours shall be entitled to the proportionate part of an annual vacation. This means that for each set of weekly worked hours, the employee shall be entitled to a 1/52 share of the annual vacation. The law even considers the possibility that an employee may work more than 52 weeks per calendar year (recalculated to weekly hours worked): in such a case, more than 52 full multiples of weekly hours shall be taken as the basis for calculating the employee’s vacation entitlement in the given calendar year.
With the change in calculating vacation entitlement also comes a change in the possibility to reduce vacation entitlement: nowadays, employers may reduce vacation entitlements by any unexcused absences, and by long-term impediments to work. Under the new rules, this will only be possible for unexcused absences, and only hours actually missed shall be considered. Vacation entitlements will no longer be reduced due to impediments to work, as these can now be reflected in the number of hours worked within the weekly working hours and will affect the overall vacation entitlement in this way.
The amendment also allows employees to request the transfer of vacation days in excess of the statutory minimum length of four weeks (six weeks for teaching staff) to the subsequent year.
The change in the concept of vacations will certainly affect employers, who will have to get ready for the new system in a timely and diligent manner. In the next article of our series devoted to the Labour Code amendment, we will discuss the upcoming changes in the rules of delivering documents to employees.