RECENT EMPLOYMENT LAW DEVELOPMENTS
In recent months, several legislative changes have been adopted, two of which are directly related to employment law. These are the European rules on pay transparency and the latest amendments to the Labour Code concerning the method of calculating length of service. The present material will examine the first topic in greater detail.
I. Rules on Pay Transparency
These Rules were introduced by Directive (EU) 2023/970. The main reason for its implementation is the ineffectiveness of the current mechanisms for preventing unequal treatment of employees in determining remuneration. For years, international and European standards have guaranteed equal treatment of employees regardless of gender. In reality, however, discriminatory practices continue to exist, with statistical studies showing that the gender pay gap amounts to approximately 13%.
According to the European legislator, employees lack access to information about how remuneration is determined. Employees often do not have data about pay levels and the criteria used to determine them, which makes it difficult to identify potential discrimination in cases involving equal work or work of equal value and, consequently, limits the possibility of effectively protecting their rights. A common practice is to include contractual clauses that expressly prohibit employees from discussing their remuneration with colleagues. Overcoming this information asymmetry is one of the main objectives of Directive (EU) 2023/970.
The New Rules
Following the transposition process of the Directive, employers will be required to:
- provide job applicants with information about the starting salary or pay range for the relevant position either in the job advertisement or before the interview, and not request information about the remuneration received by the applicant in previous employment relationships;
- provide employees, upon request, with information about their individual remuneration, as well as average pay levels broken down by gender for categories of employees performing the same work or work of equal value;
- publish information on the gender pay gap to the Commission for Protection against Discrimination (CPD). Employers with at least 100 employees will be required to report information on the gender pay gap to the CPD every three years, whereas those with more than 250 employees will be required to do that annually. Where the reported data reveal an unjustified gender pay gap of at least 5%, employers will have the obligation to explain to the regulator and, where the difference cannot be objectively justified, take corrective measures.
- Establish clearer criteria for determining remuneration – skills, effort, responsibility and working conditions shall be the criteria taken into account when calculating pay.
Another important measure is the prohibition on including contractual clauses that prevent employees from discussing their remuneration with colleagues.
Compensation is also provided for persons who have suffered damage as a result of a breach of employers' obligations under the Directive. Affected persons will be able to bring a claim and seek compensation or payment of the remuneration due to them.
The second part will examine the recent changes to the rules governing the calculation of length of service and their practical implications.