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Main changes in payroll from 1 January 2014 – Part 2

Welcome to another issue of our brief newsletter on the new developments in payroll and HR management.

1.       Agreements on deductions from employees’ pay

  • Agreements on deductions from pay are regulated in Sections 2045 to 2047 of the new Civil Code, and the relevant section (S. 327) of the Labour Code governing these issues has been repealed;
  • Agreements are subject to the employer’s prior written consent unless a debt owed to the employer is involved;
  • Deductions may not exceed half of the pay or the amount of pay not liable to garnishment under the Rules of Civil Procedure.

2.       Internal regulations

  • If employees’ obligations are stipulated in an internal regulation, they will be disregarded;
  • Consequently, employees’ obligations should be prescribed in the company’s employment rules;
  • This restriction applies to internal regulations adopted after 1 January 2014.

3.       Pre-contractual liability

  • Special consideration needs to be given to negotiations for the terms of employment contracts or other agreements, both in respect of the duty to inform and in respect of the termination of negotiations without a justified reason
  • Pre-contractual liability is established if both parties have reached such an advance stage of negotiations for a contract that entering into the contract appears to be very likely; a party acts in bad faith if it terminates the negotiations for the contract for no justified reason despite the reasonable expectations of the other party; the party acting in bad faith is required to compensate the other party for damage incurred
  • Pre-contractual liability is regulated in Sections 1728 and 1729 of the new Civil Code and damages in Section 2955 of the new Civil Code.
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