From 1 July 2012, a new Labour Code is expected to come into force, including rules for applying the new Code to existing employment contracts.

The Code has not yet completed all the formalities required for it to become law: it has been passed by Parliament and the final text has been signed by the Speaker but it has not yet been signed by the President or published in the Official Gazette. It is, however, available on the Parliament website.

The new Code will apply to employment contracts concluded before it comes into force, with certain qualifications and exceptions:

  • Notice is governed by the rules in effect when the notice is communicated to the other party
  • Internal policies and undertakings will be treated for the first time as creating binding obligations, with retroactive effect for those adopted before the new Code comes into effect
  • Transfers of undertakings with an effective date of transfer after 15 July 2012 will be subject to the new Code
  • Place of work may no longer be agreed by the parties to be 'variable' after 1 July 2012. Any contract specifying a place of work will be replaced by law with the site where the employee habitually performs his/her duties
  • Extension of probationary periods is only permitted for employment contracts concluded after 1 July 2012
  • Study contracts and post-employment restrictive covenants will only be subject to the new Code in agreements concluded after it comes into force
  • Disciplinary procedures will be regulated by the rules in force when the misconduct was committed
  • Termination of employment will be regulated by the law in force when the termination notice is communicated to the other party
  • Working hours calculated using a 'timeframe' will be subject to the Code in force when the timeframe began
  • Overtime will be subject to a limit for 225 hours in the calendar year 2012
  • Pay in lieu of holiday can, under the New Code, only be paid up to 31 December 2012 for leave accrued by young mothers during the first six months of the unpaid maternity leave
  • Liability for damages in connection with employment will be determined by the Code in force when the act or omission causing the damage occurs (or, if this is not known, when the damage is suffered)
  • Collective bargaining agreements concluded by a trade union which, under the new Code, is not eligible to bargain collectively will be automatically repealed on 1 January 2013
  • Claims issued after 1 July 2012 will be subject to the new Code, but claims issued before then will not.

Law: consolidated statute on employment and labour relations, promulgated as Act I of 2012 on the Labour Code

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 29/06/2012.