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European Commissioner Andor praises Slovenian government reform efforts

European Employment and Social Affairs Commissioner Laszlo Andor praised Slovenian government labour market and pension reforms. Speaking at the International conference "Labour market reform: new opportunities for a better tomorrow in Ljubljana Commissioner Andor said he was particularly fond of the idea of a new, standard open-ended employment contract, which he believes would improve productivity and human capital.

Commissioner Andor stressed that European Commission »welcome the Slovenian Government’s efforts to improve the sustainability of the pension system and address the segmentation of the labour market, in line with the Council recommendations of last July. Addressing the labour market segmentation, and one of its main causes - the high percentage of temporary contracts - is certainly a priority in Slovenia. Single open-ended contracts present advantages both for the workers and for firms. For workers, it clears the way to stability and economic protection. For firms, it does not necessarily increase the expected average firing cost, because the firing and job destruction rate would be lower than in a segmented labour market. Where workers are on temporary and/or fixed-term contracts, neither the worker nor the firm generally have an incentive to improve productivity through job-specific investments – such as training. Single open-ended contracts offer firms and workers a greater incentive to invest in productivity-enhancing firm-specific skills and human capital. And accumulating human capital is a strong deterrent to dismissal. More stable job careers also increase young people’s participation in the labour market and therefore help making a more sustainable pension system.«


Labour Ministry State Secretary Patricia Čular told the conference that all the analyses, statistic data and recommendations that Slovenia had been receiving from international organisations clearly showed that the Slovenian labour market was not functioning as it should. The goal of the proposed overhaul of the labour market legislation is to boost the job security of employees as well as enhancing flexibility of the labour market.


Commissioner Andor outlined that both reform proposals are a step in the right direction, while the details are to be agreed on among social partners.


Labour Minister Andrej Vizjak welcomed this view, and agreed that the reform of the labour market could not be passed without "a high degree of talks" with social partners.