Vizjak said the reform employment relationship act and the labour market act would tackle the dual problems of Slovenia's labour market by making it easier for youths to get contracts for an indefinite term (over 80% of all new contracts are fixed-term) and encouraging companies to hire by making it less expensive to lay off employees.

The laws were rushed through second reading in only two hours, as MPs endorsed all amendments put forward by the outgoing coalition, the result of months of negotiations by social partners at the Economic and Social Council. The end-result is an expected compromise, with both sides only partially happy with the solutions.

The key provisions involve cutting the maximum notice period from 120 to 80 days, a solution agreed in exchange for the preservation of unemployment benefits at 80% of base pay in the first three months, compared to 60% initially proposed. In the subsequent nine months, the unemployed will receive 60% of base pay, and then 50%.

The reform introduces redundancy pay for fixed-term contracts in a bid to lower the segmentation of the labour market, and prevents multiplication of fixed-term contracts. It was initially proposed that fixed-term contracts be replaced by a novel system, but that did not gain traction.

It also mandates a 25% cap for temping agency workers. This means that only 25% of the workers in a company can work through temping agencies, a solution that had been hotly contested by the employers.

However, small employers are exempt from that provision and employers will be jointly liable for pay as a means to curtain abuse of temporary workers.

Several other provisions designed to curb abuse have been put in place, including making the paycheck an official document enforceable in court and allowing employees to leave without obligations if the employer does not pay social contributions for three months in a row.

A new system allowing workers to temporarily lay off employees will be put in place, whereby the employees will be entitled to only 80% of pay in that period as opposed to the present 100%.

Severance pay will be reduced on a graded scale depending on years of service. Retirement allowance, special payments that employees are entitled to when they retire, will be restricted to only those employed by a company for the last five years.

The reform also simplifies hiring and dismissing proceedings, including by waiving the obligation that every job vacancy needs to be registered with the Employment Service, and introduces temporary work for pensioners.

Lunch breaks will continue to be considered a part of working time and bonuses on years of service will remain in place.