1. General overview
The right to employment is provided for in Article 49(1) of the Constitution which defines that "Everyone has the right to earn a means of living by lawful work that he/she has chosen or accepted himself. Each person is free to choose his profession and place of work as well as the manner of achieving professional or other qualifications or training". Employment in Albania is largely governed and regulated by the 1995 Labour Code, as amended by Law No. 8085 of 13.03.1996 and Law No. 9125 dated 29.07.2003, and which is based on the Albanian Constitution and is in accordance with all international conventions ratified by Albania.
The Labour Code provides for the contractual regulation of the employment relationships between the employer and the employee by means of an individual or a collective labour agreement.
The Labour Code sets out the main legislation regulating and applicable to employment matters, as well as the hierarchy of such legislation which is as follows:
- the Constitution of the Republic of Albania;
- international conventions ratified by the Republic of Albania;
- the Labour Code and its sub-legal acts;
- the collective contract of employment;
- the individual contract of employment;
- internal regulations of the employer;
- local and occupational customs.
We are aware of steps to amend the Labour Code, such amendment being focused upon trade unions, termination provisions and health and safety at work.
Based on Article 21 of Law No. 7995, dated 20.9.1995 "On promotion of employment", as amended, any employer is obliged to report to the respectiveLabourOfficeanynewemploymentpositionwithin7(seven) days from the date of the creation of this position. The employer may employ people directly or use the services of state recruitment offices or private employment agencies to recruit employees. An employer may only hire an employee(s) who meets the minimum employment age as required by the Albanian Legislation, which according to Article 98 of the Albanian Labour Code is 16 (sixteen) years old. The employer should notify the relevant tax authorities about the newly hired employee at least 48 (forty-eight) hours before commencement of the employment relationship. Furthermore, the employer is obliged to declare the newly hired employee at the relevant Labour Office the moment such employment relationship begins.
2.2 Disabled persons
According to Law No. 7995, dated 20.9.1995 "On promotion of employment", as amended, each employer is obliged to hire one disabled person for every 25 employees. An employer may hire an
employee with a serious handicap instead of five employees with a mild handicap. In the event that the work position offered to a disabled employee requires special working conditions, the employer may request a subsidy from the respective Labour Office.
An employer who does not employ the recommended number of disabled people is obliged to pay into a separate account of the Fund of the National Employment Service ('Fund') an amount equal to the monthly minimum salary that he would have paid to the disabled employee. The revenue of this Fund is used to create jobs for disabled people. According to the abovementioned law, the State Labour Inspectorate controls the fulfilment of the obligation for hiring the required number of disabled persons. We note that this obligation is in practice not fulfilled.
2.3 Foreign employees
Hiring of foreigner employees is governed by Law No. 9959, dated 17.07.2009 "On foreigners", as amended, and by several decisions of Council of Ministers in implementation of this law. According to Albanian legislation there are no restrictions on hiring foreign employees. However, foreign citizens who intend to work and live in Albania need to be provided with work and residence permits. Should the foreigner intend to work, he must acquire a work permit prior to commencement of work.
The work permit is issued by:
- Relevant Labour Office corresponding to the business location of the employer and where the employee will perform his work, if the foreigner is residing in the Republic of Albania;
- General Directorate of the Employment National Service, if the employer which intends to employ the employee, carries out its business in more than one region, and if the foreigner is residing in the Republic of Albania;
- The corresponding Albanian Diplomatic mission of the Republic of Albania, in the Country of Origin, if the foreigner is residing in the Country of Origin.
A residence permit is required when a foreigner is going to stay in Albania for more than 90 (ninety) days at any one time and/or will stay in Albania for more than 180 (a hundred and eighty) days (either at one time or through various visits) within one year. Such a residence permit is issued by the Regional Directorate of Border and Migration, if the applicant fulfils the conditions provided for in the legislation. We note that the procedure is administrative and, provided that the documentary requirements are fulfilled, there is in general no problem in acquiring the necessary residence and work permit.
According to Article 137 of the Labour Code, the employer may not second an employee to another employer without the consent of the employee. In this event, the first contract between the employer and the employee remains in force. When an employer seconds his employee to another employer, then the first employer is obliged to grant the employee at least the same working conditions as those which the second employer has granted to the employee(s) of his enterprise carrying out the same work. The employer to whom the employee is seconded has the same obligations to the employee with regard to health protection, insurance and hygiene as to his other employees. In the event that the employer fails to fulfil his obligations to the seconded employee, then the second employer, through solidarity with the first employer, will be held liable for the fulfilment of the obligations to the employee.
3. Types of engagement
Employment contracts may be agreed orally or in writing. In the even that the employment contract is agreed orally, the employer is obliged to produce a written contract within 30 (thirty) days from the date of the oral agreement, bearing the signature of the employer and that of the employee and containing all mandatory legal elements 1.
According to Article 23(3) of the Labour Code, the following mandatory elements must be included in all written employment contracts:
(a) the identity of the parties;
(b) the workplace;
(c) a general job description;
(d) the starting date of the job;
(e) the duration of a fixed-term contract;
(f ) the duration of paid vacations;
(g) the notice period for termination of the contract;
(h) the main aspects of the salary and the day of receipt of such salary;
(i) the normal working hours in a week;
(j) the related effective collective contract (if any).
An employment contract may last for an indefinite or a fixed period of time, although the employer must provide justification if the term is fixed (i.e. the job is only of a temporary nature). Unless otherwise agreed in writing, the first 3 (three) months of the employment will be deemed to represent a probationary period, regardless of whether the contract is for a fixed or indefinite term. During the probationary period either party may terminate relations with five days' notice.
3.2 Other types of engagement
The Labour Code provides for the following types of engagement; the parties entering into such engagements are also subject to the conditions of the Albanian Labour Code:
- Part-time employment agreement (the employee agrees to work on an hourly basis, either half or complete working day for the normal duration of a week or month, which is shorter than that of full-time employees working under the same conditions);
- Home-based work agreement (the employee is obliged to carry out his job at his home or any other location chosen by him/ her on the basis of the alternatives offered by the employer);
- Commercial agent agreement; and
- Agreement for acquiring a specific profession (concluded between the teaching master and the person who is studying to acquire a specific profession).
Furthermore, a service agreement is another type of engagement frequently used in practice in Albania. However, this type of agreement can only be entered into with physical person(s) registered for commercial purposes. The service agreement is a sui generis agreement, and such agreement is regulated by the Albanian Civil Code and not by the Labour Code.
3.3 Engagement of managing directors
Managing directors may be employed, or in the event that they are physical person(s) registered for commercial purposes they may enter into a service agreement. However, in the event that the managing director is a registered person for commercial purposes, the applicable tax regime shall be different and fall outside the scope of the Labour Law. In all other cases the compensation of the managing director shall be considered as a salary, and the rules defined in section 5 below shall apply upon this compensation.
4. Salary and other payments and benefits
According to Decision of Council of Ministers No. 566, dated 14.7.2010 "On defining the national minimum salary", the national minimum monthly salary payable to all employees, by any physical or legal person, local or foreign, is 19,000 ALL (~190 USD). The national minimum hourly rate that should be applied to all employees is 109 (1 USD) ALL. The employer shall deduct from the employee's salary the corresponding income tax and the social and health insurance contributions, as per the specifications of the primary and secondary legislation and of the collective or individual employment contracts. Salaries must be paid in ALL, unless otherwise defined by the agreement between the parties.
4.2 Other mandatory payments not considered as Salary
According to the provisions of Albanian legislation, the following mandatory payments are not considered salary:
(a) compensation the employee receives for expenses incurred as a result of his professional activity;
(b) payment of expenses when the employee works outside his workplace;
(c) contribution in kind (e.g. accommodation, food and travel expenses);
(d) difference between the damage and the benefit the employee receives from social insurance, in the event that a workrelated accident or occupational illness has occurred as a result of serious fault of the employer.
Insofar as these payments are not considered salary, neither the employer nor the employee is obliged to pay mandatory social and health insurance contributions on the above payments. In addition, please note that the abovementioned payments are not considered taxable personal income for the employee. However, please be informed that according to the law, contributions in kind which have a permanent nature are considered as part of the salary and, thus, personal income tax should be paid on the value of such permanent contributions in kind.
4.3 Other benefits
Albanian legislation does not provide for restriction and employers are free to provide their employees with other benefits, such as employees' stock option plans, participation in the profit, etc. As for the employees' stock option plans, it should be noted that this area is not sufficiently regulated in Albania.
5. Salary tax and mandatory social Contributions
5.1 Social contribution and health insurance
The payment of social and health insurance contributions and of personal income tax are governed by the following legislation: Law No. 7703, dated 11.05.1993 "On Social Security" (as amended); Law No. 7870, dated 13.10.1994 "On Health Insurance" (as amended); Law No. 8438, dated 28.12.1998 "On Income Tax" (as amended); Decision of Council of Ministers No. 1114, dated 30.07.2008 "On some issues for the implementation of the laws" No. 7703, dated 11.5.1993 "On social security in the Republic of Albania", as amended; and Law No. 9136, dated 11.9.2003 "On the collection of the mandatory contributions of social security and health insurance in the Republic of Albania", as amended; and Law No. 7870, dated 13.10.1994 "On health insurance in the Republic of Albania", as amended; and other relevant pieces of legislation.
The relevant legislation provides for the payment of social contribution and health insurance as a mandatory obligation, and which is an obligation to be executed by both the employer and the employee. The obligations for contributions of social security and health insurance in Albania are as follows:
(a) Employer: 16.7% of the monthly salary (1.7% for health insurance and 15% for social security);
(b) Employee: 11.2% of the monthly salary (1.7% for health insurance and 9.5% for social security).
Contributions should be calculated using the reference salary as defined by the Decision of Council of Ministers No. 285, dated 4.5.2007 "On defining the referred monthly wage, for purposes of calculating the social and health security contributions, and tax on personal incomes, according to the nomenclature of economic activity, regarding the employees of private and public sector, that perform unqualified and qualified work, and also regarding their executive and technical – economical staff ".
In addition, please note that the minimum monthly salary for the purposes of calculating social security and health insurance contributions is 16,820.00 Leke, whereas the maximum salary is 84,100.00 Leke. For the purpose of payment of social security contributions, the employer should withhold the employees' part of contributions from the employee's salary.
5.2 Tax on personal incomes generated from Employment
Personal incomes generated from employment are taxable as follows:
6. Working hours
Working hours are regulated by the Labour Code and by Law No. 9634 dated October 30, 2006 "On Labour Inspection State Labour Inspectorate". According to Article 83 of the Labour Code, reasonable working hours shall not exceed 40 (forty) hours per week and that such weekly working hours must be set out either in a collective agreement or in individual employment contracts. The normal daily working hours are 8 (eight) hours.
Overtime and extra working hours are also regulated by the Labour Code (Article 91), which provides that the employer shall compensate the employee for any overtime with 25 percent of normal payment if time-off in lieu is not given; or, if agreed, to compensate with time-off in lieu plus 25 percent of the hours of the normal working day, unless otherwise provided for in the collective contract. Extra work performed at weekends or on public holidays will give rise to higher extra payments of 50 percent of the normal payment, unless otherwise defined by the collective contract.
The Labour Code also regulates night work, defined as work carried out between 10 p.m. and 6 a.m., and which is only permitted in the case of adults over the age of 18 years of age. The duration of night work and of the work carried out one day before or after must be no longer than eight hours without interruption; it must also be preceded or followed by an immediate break of one day. Working during the evening entitles the employee to extra payment, so for every hour worked between 7 p.m. and 10 p.m. the employee shall receive a payment that is not lower than 20 percent of normal pay; whereas work during the hours of 10 p.m. and 6 a.m. entitles the employee to extra payment of no less than 50 percent of normal salary.
7. Annual vacation, paid leave, sick leave, unpaid leave and employment standstill
7.1 Annual vacation
Annual vacations are governed by the Albanian Labour Code. The Labour Code provides for minimum paid annual leave of no less than four calendar weeks in one year (pro-rata for those who have worked less than one year). For the purpose of calculating annual leave, sick leave shall be considered working time. The period during which an employee can take annual leave shall be determined by the employer taking into consideration the employee's preferences. The employee is obliged to give the employer at least 30 days' prior notice of the dates for his annual leave. Moreover, in cases where the employee receives a salary which includes contribution in kind (e.g. accommodation, food and travel expenses), a bonus equal to the contribution in kind, e.g. travel expenses for homeward travel, is awarded. A decision of the Council of Ministers sets out the method of calculation for such additional contributions.
Under the provisions of the Labour Code "Annual leave must be given during the working year or within the first three months of the consecutive year, but in no case may it be less than one calendar week without interruptions. The right to annual leave which has accrued but has not been (awarded) taken within three years of the date when this right might be enjoyed, is subject to statute of limitations".
Further to the above-stated provisions, such rights of the employee must be exhausted no later than the month of March in the subsequent year. Thus, the employer should designate and award to the employee the right to take his annual leave within the month of March in the subsequent year. The last paragraph acknowledges the right of the employee to be awarded/to take the annual leave even after the month of March in the subsequent year. This paragraph is designated to protect the interests of those employees who, for any reason (their own or that of their employer), is unable to take the annual vacations. Nevertheless, in practice this last paragraph has not been applicable as most employees choose to exhaust their annual vacations within the respective year. Furthermore, in practice, if the employees have not taken the annual leave by the month of March in the subsequent year, they receive compensation equal to the salary of the vacations which have not been taken.
7.2 Paid leave
The employee is entitled to other periods of paid leave in specified circumstances:
(a) for marriage: 5 days;
(b) in the event of death of a spouse, direct predecessors or descendants: 10 days;
(c) in the event of serious illness of direct predecessors or descendants, as evidenced by a medical report: 10 days.
The law on social security provides for maternity leave and pursuant to that law a pregnant woman is entitled to paid maternity leave of 365 calendar days, including a minimum of 35 days prior to childbirth and 42 days after childbirth.
In the event of the birth of more than one child, the duration of this period is extended to 390 days. During this period, employees shall receive payment from the Social Security Institute ('SII') amounting to: 80 percent of the daily average of their salary over the last calendar year, applicable for the first 150 days of the maternity leave; and 50 percent of the daily average of their salary for the last calendar year, applicable for the remaining days of maternity leave. Maternity leave is paid by the SIIand not by the employer.
7.3 Sick leave
According to Article 130 of the Labour Code, the employee provides evidence of his disability to work by a medical report duly issued by a doctor. Furthermore, at the request of the employer the employee is obliged to undergo examination by another doctor assigned by the employer; this doctor will declare only the disability of the employee to work, while maintaining medical confidence. In the event of illness, the employer pays the employee 80% salary for a period of 14 (fourteen) days, a period which is not covered by Social Insurance. Law No. 7703, dated 11.05.1993, "On Social Insurance in the Republic of Albania", as amended, defines that after 14 days the employee shall benefit from the social insurance scheme.
7.4 Unpaid leave The question of unpaid leave is not regulated within Albanian legislation and there are no conditions or procedures to benefit from it. However, in practice unpaid leave, its duration, etc., can be arranged by mutual consent between the employee and the employer. It is at the discretion of the employer to accept or refuse the request for unpaid leave. 7.5 Employment standstill According to Article 147 of the Labour Code, the employer cannot terminate the employment contract in the event that, according to the legislation in force, the employee is completing his military service, receiving benefits payment(s) (from the employer or Social Insurance Institute) related to temporary inability to work for a period no longer than one year, or in the event that the employee is on leave, if such leave is granted by the employer.
The use of Employee Stock Ownership Plan schemes in Albania is not prohibited by law. The related regulatory framework is absent from employment law and corporate law.
Albanian tax legislation also does not contain specific provisions relating to the taxation of granting, vesting or delivery of shares. Albanian legislation provides for the taxation of dividends generated from shares delivered to employees; such tax is at the rate of 10% (ten percent).
9. Health and Safety at work
Health and Safety at work is mainly governed by the Labour Code and Law No. 10237, dated 18.02.2010, "On health and safety at work". According to the Albanian Labour Code, the employer must apply for a permit from the Labour Inspectorate prior to commencing operation of the enterprise or a part of it, before creating new workplaces, and prior to any important change in the manner of work, usage of materials, machinery and equipment. If, within 30 days from the date of the submission of the documents, the Labour inspector has not rejected them in writing or in a motivated way, the employer may commence project(s). During the process of employment the employer trains the employees to respect all requirements related to health, safety and hygiene. If the nature of work requires the usage of mechanical and electrical machines and equipment, the employer should only hire qualified persons, or the employer should provide training to the person hired. Furthermore, in order to prevent accidents and occupational illness, the employer is obliged to provide clear technical safety rules and monitor hygiene in the workplaces. Furthermore, in accordance with Decision No. 207 dated 09.05.2002 "On the definition of difficult and dangerous work", some work in areas such as construction and the electrical industry are considered as difficult and endangering the life and health of the employees. Thus, the employer is obliged to apply high standards of safety-atwork measures and health protection measures.
According to Decision of Council of Ministers No. 461 dated 22.07.1998 "On the Register of Accidents at Work and Occupational Illness", the employer is obliged to keep a register of the Accidents at Work and Occupational Illness in the relevant workplaces.
10. Amendment of the employment Agreement
According to Article 12 of the Albanian Labour Code, the employment agreement may be amended by mutual agreement between the parties, wherein such mutual agreement is concluded either orally or in written form. In the event that the amendment of the employment agreement is agreed orally, the employer is obliged to produce a written amendment to the employment agreement within 30 (thirty) days from the date of the oral agreement and this written agreement must be signed by both parties.
11. Termination of employment
11.1 Termination of fixed/open term employment Contracts
A fixed-term employment contract is terminated upon the expiry of its term without the need for any prior notice. An open-term employment contract is terminated when one party decides to do so and the prior notice period has been observed. The Labour Code provides that an employment contract can be terminated with or without cause and although in normal circumstances a notice period must be provided, there are circumstances where the law justifies immediate termination for reasonable cause.
11.2 Procedure for termination
There are procedures which must be followed when the employer decides to terminate an employment contract, both in the case of immediate termination with cause or with prior notice period. If such termination takes place after the probationary period, the employer must convene a meeting with the employee, to discuss the reasons giving at least 72 hours' prior written notice. The notice of termination of employment may be given to the employee from 48 hours to one week following the date of meeting. Should the employer fail to follow this procedure, he shall be obliged to pay the employee compensation equal to two months' salary, and other possible compensation. This procedural requirement does not apply to collective dismissals for which there is a separate special procedure.
11.3 Notice period
The notice period for the termination of the employment contract is defined in the individual employment contract. In the event that the parties have not defined the notice term in the employment contract, reference shall be made to the Labour Code. According to the Labour Code, the notice period for termination within the 3 (three) month probationary period is at least five days, which may be changed by the written agreement of both parties.
The Labour Code provides for mandatory minimum notice periods to be applied in the case of termination of an indefinite (open) term contract by either the employer or the employee, as follows:
(a) during the first six months: two weeks;
(b) between six months and one year: one month;
(c) between one and five years of employment: two months;
(d) for more than five years of employment: three months.
11.4 Termination without cause
The termination of an employment contract by the employer prior to its expiry date, without reasonable cause, can result in the employer being liable to compensate the employee with up to 12 months' salary; the specific obligations of the employer will be decided upon by the courts.
According to the Labour Code termination of the employment contract by employer is considered to be without cause (Article 146 of the Labour Code) when it is:
(a) based on the fact that the employee had genuine complaints arising from the employment contract;
(b) based on the fact that the employee had satisfied a legal obligation (e.g. giving evidence in court);
(c) based only on the employee's characteristics (such as race, colour, sex, age, civil status, family obligations, pregnancy, religious or political beliefs, nationality, social status);
(d) based on the fact that the employee is required to exercise constitutional rights; and
(e) based on the fact that the employee participates in lawful labour organisations and their activities.
If an employee is dismissed without any reasonable cause, he has the right to bring a claim against the employer to court within 180 days, beginning from the day on which the notice of termination expires. In the event that an employer is found to have had an unjustifiable motive discovered after the expiration of this deadline, the employee has the right to start legal actions within 30 days, beginning from the day on which the particular unreasonable cause was discovered.
11.5 Collective dismissals
Collective dismissal is defined as the termination of labour relations by the employer for reasons unrelated to the employee, where the number of dismissals in a 90-day period is at least:
(a) 10 for enterprises employing up to 100 employees;
(b) 15 for enterprises employing 100-200 employees;
(c) 20 for enterprises employing 200-300 employees; and
(d) 30 for enterprises employing more than 300 employees.
Article 148 of the Labour Code defines specific procedures which need to be followed when an employer plans to execute collective dismissals. The employer shall inform in writing the employees' trade union which is recognised as the representative of the employees. In the absence of a trade union, the employees shall themselves be informed by way of a notice visibly placed in the workplace. The notice shall contain:
(a) the reason(s) for dismissal;
(b) the number of the employees to be dismissed;
(c) the number of employees employed; and
(d) the period of time during which it is planned to execute the dismissals.
One copy of this notice must also be submitted to the Ministry of Labour and Social Aff airs.
In order to attempt to reach an agreement, the employer shall then undertake the consultation procedure with the employees' trade union within 20 (twenty) days of the date on which the notice was displayed. In the absence of a trade union all interested employees are entitled to participate in the consultations. If the parties fail to reach agreement, the Ministry of Labour and Social Aff airs shall assist them in reaching an agreement within 20 days of the date on which the employer informed the Ministry in writing, in the aims of completing the consultation procedure. After the termination of the 20-day deadline, the employer can then inform the employees of their dismissal and begin the termination of employment contracts providing the following notice periods:
(a) for up to one year of employment: one month;
(b) for two-five years of employment: two months; and
(c) for more than five years of employment: three months.
Non-compliance with this procedure shall result in the employees receiving compensation of up to six months' salary in addition to the salary payable for the notice period or to additional compensation awarded due to non-compliance with the provision of the specified notice periods.
In addition to the provision which provides that during the employment period the employees are not permitted to work for third parties, if such other employment would harm the employer or create competition for the employer, there are provisions to prevent the employee from working for a competitor after the termination of the employment agreement. According to the amendments of the Labour Code (Law No. 9125 dated 29.07.2003), non-competition clauses taking eff ect after termination can be enforced subject to the following conditions:
(a) they are provided in writing at the beginning of the employment relationship;
(b) the employee is privy to professional secrets in respect of the employer's business or activity during the course of employment; and
(c) the abuse of such privilege shall cause significant damage to the employer.
The non-compete period shall be no longer than one year after the date of termination. Parties are free to determine and set out agreed non-competition clauses in the employment agreement, but such non-competition clauses shall only be enforceable once the aforementioned criteria are met, and in the event that the conditions of prohibition are clearly defined such as conditions related to place, time and type of activity. An agreement on noncompetition after termination is subject to remuneration for the employee, wherein such remuneration is equivalent to the amount of 75 percent of the salary he would have received if he were still working with the employer. The prohibition for competition will not apply if the employer terminates the employment agreement without reasonable cause or if the employee terminates the employment agreement for a reasonable cause related to the employer.
13. Global policies and procedures of Employer
Albanian legislation does not provide any special regulation with regard to the global policies and procedures of employer. However, according to Article 23 of the Labour Code the employee must respect the employer's general and specific orders and instructions. The employee is not obliged to execute those employer's general and specific orders and instructions which change the terms and conditions of the employment agreement. Thus, the employer's policies and procedures developed on a global level could be applicable in Albania provided that such policies and procedures are fully in compliance with Albanian legislation and they do not alter the terms and conditions of the employment agreement.
14. Employment and mergers and Acquisitions
This issue is regulated by Article 138 of the Labour Code which is in compliance with Council Directive 77/187/EEC known as "The Acquired Rights Directive" and is applicable only in the event of the transfer of an enterprise, business or part of a business to another employer as a result of a legal transfer or merger. In the event of transferring an enterprise or part of it, all rights and obligations arising from a contract of employment valid until the moment of transfer, will pass on to the person subject to the transfer of these right. Any employee refusing to change employer in this event remains bound by the employment contract until the expiration of the termination notice. According to Article 138(2) of the Labour Code, the previous employer remains jointly responsible with the new employer for obligations derived from the employment contract until the expiration of the notice period for termination or until such date specified in the contract.
The transfer of an enterprise in itself does not generally amount to a valid reason or grounds for the termination of employees' contracts. Exceptions to this rule are when the dismissals are due to economic, technical or organisational reasons that impose changes to the employment structure. In such cases, termination procedure1 as defined in the Labour Code is required to be followed. Article 139 of the Labour Code provides for an information and consultation procedure in the event of a transfer of enterprise. The transferor and transferee are obliged to inform the trade union of its role as the employees' representative or, in its absence, the employees, and further explain the reason for the transfer, its legal, economic and social effects on the employees, and the measures to be undertaken in respect thereof. Moreover, they are obliged to engage in consultations regarding the necessary measures to be taken at least 30 (thirty) days prior to the completion of the transfer. In the event that an employer terminates the contract without following the abovementioned procedures of information and consultation, the employee is entitled to compensation equal to six months' salary in addition to the salary he would have received during the prior notice period.
15. Industrial relations
In Albania all citizens have the right to join labour organisations for the protection of their employment interests and social security and all employees have the right to form trade unions and employers have the right to form their own organisations (Article 176 of the Labour Code). A trade union must have a minimum of 20 people and is formed as an organisation/body with legal status through registration as such with the Court of Tirana. Employee trade unions are organised on a national level (according to the respective industry sector) and also on a company level.
Each legally founded trade union may submit a collective bargaining request to its employer or employer organisation, in order to commence negotiations in relation to a collective labour contract at either enterprise, group of enterprises, or sector level.
Furthermore, the employees have the right to strike, which is provided for by the Constitution of the Republic of Albania and by the Labour Code. Participation in any strike is voluntary and no one shall be forced to participate in a strike against his will. Any action that includes threats or any kind of discrimination of workers due to their participation or non-participation in a strike is prohibited. While a strike is taking place, the parties shall make eff orts, through negotiations, to reach common understanding and sign the relevant agreement confirming the outcome of the negotiations. A strike shall be deemed lawful if it fulfils conditions defined in the Labour Code. The right to strike cannot be exercised in services of vital importance, where the interruption of work endangers the life, personal safety or the health of a part of or all of the people. Such vital services include: water supply, electricity supply, fire protection, air traffic control, necessary medical and hospital services, and prison services. A strike shall cease when the parties reach an agreement or the trade union decides to end it.
16. Employment and intellectual property
According to Article 135 of the Labour Code, inventions made by employee or in which the employee has been involved during employment with the employer and in compliance with his contractual obligations, belong to the employer.
Through written agreement the employer may exercise copyright related to those inventions which the employee has made during employment with this employer, but not as part of his job description/ contractual obligations. The employee who has made an invention should inform the employer about this invention in writing. The employer within 6 (six) months should notify in writing the employee whether the employer requires the copyright of the invention or not. If the employer decides to exercise copyright relating to the invention, the employer should pay an award to the employee taking full consideration of all circumstances, the economic value of the invention, the use of his equipment, expenses incurred by the employee, etc.
In the event that the employee during his employment with the employer performs work not in compliance with his contractual obligations/job description, regardless whether protected or not, the employer may use it to the extent that the purpose of the contract allows for this. The same rules are applicable also to industrial drawings and models, and computer programmes that the employee creates during employment with the employer and in compliance with his contractual obligations.
Furthermore, according to Law No. 9380, dated 24.04.2005 "On Authors' Rights and Other Related Rights", the rights pertaining to works created under individual employment contacts belong to the employer. In this event, the period of time during which the employer enjoys these rights, is defined in writing. In the event that the employer and the employee have not entered into any written agreement to define such a term, it shall be 3 (three) years, starting from the date the work was submitted. With the expiry of the abovementioned period, the ownership rights to such works are returned to the employee(s).
17. Discrimination and mobbing
Albanian legislation provides express guarantees pertaining to the core labour rights of all citizens, regardless of race, colour, sex, age, religion, political beliefs, nationality or social origin. According to Article 9 of the Albanian Labour Code any kind of professional or employment discrimination is prohibited. Furthermore, according to Article 32(3) of the Labour Code, sexual harassment against the employee is prohibited. The prohibition of sexual harassment is also provided for in Law No. 9970, dated 24.07.2008 "On Gender Equality".
Furthermore, according to Article 32 of the Albanian Labour Code, the employer respects and protects the employee's person during the employment relationship. The employer must prevent any relations which might threaten the employee's dignity.
18. Employment and personal data Protection
According to the Albanian Labour Code during the employment relationship, the employer shall not collect information concerning the employee, except in cases where this information is related to the skills of trade of the employee, or if necessary for purposes the employment agreement to be entered into.
The area of data protection in Albania is regulated in general by Law No. 9887, dated 10.3.2008 "On Personal Data Protection" the provisions of which are in compliance with the EU Directive 95/46. Pursuant to this law, the Albanian Data Protection Commissioner (DPC) must be notified of the processing of personal data by the data controllers. Notification is not necessary when specific processing has been exempted from the law itself or by other sub-legal acts.
Furthermore, the law provides for certain other obligations on the part of the controllers such as the obligation to maintain the confidentiality of personal data accessed during employment, even after the employment relationship has ceased, the obligation to inform and give access to the employers on their personal data being processed or transferred and the duty to correct or delete such data, the obligation to undertake organisational and technical measures for the security of processing of personal data. With regard to the processing of sensitive personal data (e.g. nationality, union membership, health condition, etc.), written consent must be obtained from the employee prior to the processing of those data. However, such consent shall not be required if processing is subject to certain other requirements such as if the processing is necessary for the purposes of performing the obligations and specific rights of the controller in the field of employment law as in accordance with the Albanian Labour Code, the processing is necessary to protect the vital interests of the data subject or of another person where the data subject is physically or legally incapable of giving his consent, or the processing relates to data which has manifestly been made public by the data subject or is necessary for the establishment, exercise or defence of legal claims, or the processing is necessary for the administration of justice, etc.
The legislation on data protection enables the employer to verify how his or her data is being handled, in order that he or she can exercise his or her rights if necessary (i.e. the right on information on the use, processing and transfer of his or her personal data, the right to access his or her information, the right to correction of his or her information and most importantly the right to object to certain forms of use made of his data by the organisation).
With respect to the transfer of personal data to foreign countries, such transfer is generally subject to notification. Depending on the level of protection of personal data of the country of destination, the transfer of employees' data abroad may also be subject to a prior DPC authorisation.
19. Employment in practice
The Albanian authorities and institutions, especially the Courts, tend to show favour towards the employees. Therefore, in the event of the termination of the employment relationship, the employer should strictly comply with Albanian legislation in order to minimise the risk for this termination to be considered "without cause", thus resulting in a potential increase in compensation for the employee (e.g. potential 12 months' salary).
In recent years we have noticed that the inspections from the Labour Inspectorate and Tax authority have intensified. Fines are applied only in those cases where the employer has not fulfilled his legal obligations even after the relevant institution (i.e. Tax Authority, Labour Office) has given him/her a determined period of time to comply with the legislation in force.
Download – Employment Guide 2011
Originally published in SEE legal
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