Ljubljana - The Constitutional Court has stayed the implementation of provisions of the seventh economic stimulus law under which employers may unilaterally and without grounds terminate the employment contract when a worker meets old-age retirement criteria. The constitutional review was initiated by trade unions.

The trade unions represented on the Economic and Social Council (ESC) filed the petition in late January calling on the court to review two provisions of the penultimate stimulus package which, according to them, pave the way for the forced retirement of older workers.

The provisions refer to the employment relationships act and public employees act and have thus become part of these laws.

The new system has been adopted without public discussion or social dialogue and could result in irreversible and detrimental impact on workers, the trade unions have been warning. Hence, they have also urged the court to issue a stay.

They believe the arrangement allows discriminatory treatment of some workers in ending their employment, worsens the employment and social security of older workers, and impede effective the judicial protection of workers.

The court's decision, published on Tuesday, says that in the case of older workers, who have more difficulties finding new jobs than their younger peers, the consequence of terminating the employment contract would not only mean losing a job but could also end their careers.

The effects of an ongoing implementation of the potentially unconstitutional provisions would outweigh the effects produced by the staying of the provisions until the court rules on the matter, said the court.

Until the final ruling, the court has also stayed the implementation of notices of termination that have been already given under the new law.

The seventh stimulus package came into force on 31 December 2020 with the 60-day notice period to end in early March.

The court's decision was reached in a 7:2 vote with judges Klemen Jaklič and Marko Šorli voting against.

The trade unions welcomed the step today, considering it proof that labour law was amended in an unacceptable manner and a signal that their concerns regarding the state of social dialogue in the country are legitimate.

The Chamber of Trade Craft and Small Business (OZS) regrets today's decision, expressing hope that the court will acknowledge arguments in favour of the new system when making the final ruling on the matter.

OZS head Branko Meh told the STA that the provisions did not enable forced retirement but standard retirement of those who have met the criteria.

The new system seeks to promote dialogue between the employer and employee about future options upon fulfilment of the criteria and to improve the situation of young job seekers, said Meh.

The Labour Ministry highlighted the positive effects of the new arrangement regarding youth employment and employability of older persons.

It reiterated that the measure did not mean forced retirement as all employees who meet retirement criteria but whose employers want them to remain employed will stay on.

Instead, the measure aims to mitigate the worsening situation in the labour market, primarily to tackle the youth unemployment crisis and brain drain, the ministry told the STA, noting that the total of unemployed youth increased by 19.6% in the January-November period in 2020 year-on-year.

Moreover, the new system boosts employment opportunities for the entire working age population, particularly those aged between 55 and 58, who are often long-term unemployed, the ministry added.